Tom Cuthbert

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How to Turn Around Nearly Anything

By Rosabeth Moss Kanter via Harvard Business Review

The Boston Red Sox 2013 World Series championship will long be remembered as proof that you can turn around nearly anything. The team ended last season at the bottom of the standings (Las Vegas odds were 28 to 1 that they’d make it to the World Series), but rallied this year. With renewed solidarity and determination, the beard-wearing Sox went on to win the division, the playoffs, and the big prize.

Their game is baseball, my game is change. I’ve been involved with turnarounds for years, including observing and writing about the Red Sox 2004 World Series win that reversed many decades of being almost-rans. In turbulent times, turnarounds are increasingly a fact of life. Some companies need to be rescued from the brink of extinction (BlackBerry), but that’s not the only kind of turnaround. Others need a course correction while still  profitable (Microsoft), or a momentum shift because of disruptive new technologies (newspaper companies). Red Sox owner John Henry recently purchased one of those newspapers needing a momentum shift, the Boston Globe. For the Globe and its counterparts, the competition is not one rival or game at a time, like baseball; it is multiple digital media offerings and others-to-be-named-later. Henry, like any leader seeking strategic change, can benefit from these turnaround lessons.

Be prepared for bad news; the situation is always worse than you think. One symptom of decline is withholding information. Inconvenient facts are papered over. Decisions are made behind closed doors. Accusations and blame abound. So it is almost impossible to know the full extent of problems. When Avon Products CEO Sheri McCoy took the helm in April 2012, she acknowledged that resolving a bribery crisis in China would be a slow process, but she had no idea how slow — it’s proving to take longer and cost more, she told analysts, while also mounting multiple initiatives. Facing the facts squarely is a turnaround imperative. Open dialogue encourages everyone to see their role in the fix-up.

Identify the core assets that create value for customers, and refurbish them. For newspaper companies, that’s the news rather than the paper. For The Weather Channel Company, that’s the weather rather than the TV channel; to unlock growth opportunities, new CEO David Kenny returned science to the center and took out channel in the name — it’s now just The Weather Company. At the British Broadcasting Corporation, a turnaround leader reallocated resources from corporate staff to program producers. A bankrupt community health center repaired leaky ceilings in medical examination rooms. Forget bureaucrats, fancy lobbies, and marketing expense! They first restored the assets determining whether people use a health center.

Find a meaningful unifying purpose. Teams and companies with negative momentum are characterized by fragmentation — a drift into many activities that get tacked on and stay, becoming ends in themselves. Territories get hardened, and people seem to be out for themselves. It is too easy to lose sight of the larger purpose of being together. Why does this company/team/relationship matter? What is a common definition of success? For airlines, it is on-time performance. For consumer products company Procter & Gamble, it is improving lives, translated in the baby care group into helping babies thrive.

Invest in teambuilding – a cliché but still true. Convene strategy retreats and mountain-climbing excursions, as Shinhan, a South Korean company did. This was a vital step in healing old wounds and going on to stellar performance at the top of the Korean stock market. Red Sox CEO Larry Lucchino echoes this winning strategy: “I used to believe in biology, not chemistry. Give me big and strong and fast,” he said. “I’m a big believer now in team chemistry. You almost always have it when you win, and oftentimes it is team chemistry that leads to winning.” His quote stood for every other turnaround examined in my book Confidence.

Give voice to people who haven’t been heard. Every company/community/school is full of buried treasure. Find the ideas that might have been suppressed and bring them into the open or into action. Think small as well as big. Turnarounds operate on several time frames. There are big strategies and systems that take a long time to shift — think IT, which almost never works the first time, as Americans see in the hasty failed implementation of the Affordable Care Act website. Meanwhile, there are numerous small wins if everyone is engaged. While Verizon worked on shifting the momentum from landlines and voice to smartphones, FiOS (fiber-optic communication systems), and cloud services, mini-innovators created software and streamlined processes.

These lessons work in companies, communities, countries, sports teams, and even families. The key is to spot symptoms of decline before they accumulate, and then shift toward the actions that build positive momentum.

Rosabeth Moss Kanter is a professor at Harvard Business School and the author of Confidence and SuperCorp. Her 2011 HBR article, "How Great Companies Think Differently," won a McKinsey Award for best article. Connect with her on Facebook or atTwitter.com/RosabethKanter.