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4 Critical Steps to Turning Around a Team

The big project fails, the company begins to struggle and before you know it, the board of directors replaces the management team. Sound familiar? But crisis doesn’t have to spell the end of the company itself.

Most companies and teams in turnaround situations focus on the obvious and important factors of balance sheet, cash flow and net income health. Teams also usually get to work quickly on market analysis that ultimately results in new product and business strategies. These actions are almost always necessary, just not always sufficient. Here are four often overlooked tactics that, if successfully employed, are critical to rapidly and successfully turning around a struggling enterprise:

1. Facilitate Closure -– When a team has been through an extended period of hardship, it needs a sense of closure before it can start moving forward again, and closure is often best facilitated through a cathartic event that symbolizes the end of the perilous and painful journey. But while closure commonly necessitates letting a person or team go, don’t rush to find a “fall guy.” Be very precise about identifying what was holding the company back — it could just as easily have come in the form of an ineffective process or out-of-date strategy. Approach its removal the way you would a tumor: Excise carefully, and be wary of damaging any healthy surrounding tissue.

2. Set a Vision –- According to intentional change theory, there are five steps to achieving sustained desired change. The first is to identify the ideal self, which for an organization is usually embodied in a collective vision consisting of its members’ dreams (to be recognized as the best in the industry? world domination?), their desired future (market penetration? profitability?), and their strengths or values (high quality? extraordinary customer care?) Identify these in order to establish a shared vision that resonates with each team member on a deep, even emotional, level.

3. Find an Enemy –- The easiest way to solidify an “us” is to identify a “them.” As Tajfel and Turner’s social identity theory makes clear, people need to be part of a group, but in a company the result is often conflict between groups. The conflict that most often occurs in a crisis is affective and role-based and therefore often negative and value-destroying. There is no better way to rally the troops than to embody the fight with an external nemesis. Identify for your team an enemy outside the company and focus on beating or staying ahead of it, using everything from its press releases to its product launches to spur the team into action.

4. Tend the Garden -– In our recently published book, “The Art of Scalability,” we talk at length about how leadership is like gardening. Leaders must hire or seed the team with the right people and mentor its members just as gardeners feed their plants. And when team members aren’t working out, they need to be weeded out.

The time period between Microsoft’s release of its XP desktop operating system and Vista marked the longest in the company’s history between product launches. Jim Allchin, Microsoft’s co-president, admitted in a Wall Street Journal interview to telling Bill Gates at one point that “It’s not going to work,” describing the development as “crashing to the ground” due to haphazard methods of feature integration.

To recover from this, Microsoft enlisted the help of senior executive Amitabh Srivastava, who rooted out the process that was holding the project back. He then had a team of architects establish a development process that enforced high levels of code quality and reduced interdependencies. Once the new process was in place, the vision was set for what was ultimately a successful product launch, at least in terms of getting the product out the door and meeting the expected sales volumes.

There are entire books and domains of research dedicated to turning around failed projects and distressed teams. This list is in no way all-encompassing but if you are ever faced with the daunting task of turning around a team, these four tasks will be critical to its success.

7 Responses to “4 Critical Steps to Turning Around a Team”

  1. I agree with the comments re: #3. Though I think this can definitely motivate a team, I’d say that replacing this with tangible goals that the team orients around and focuses on achieving together is much more valuable. The goal can be beat XX enemy by acquiring more users than them by XX months, or by passing them on comscore in XX period of time. However I think an equally strong goal could be around an internal measurable goal as well.

  2. Just adding on to #3 — the outside Other has to be not only an enemy that you can identify, not only an enemy that you can “beat at their own game” by stepping yours up to the challenge, but if you ARE going to go this route, you won’t get “closure” until that enemy acknowledges your supremacy… which of course gives THEM an enemy for their own turnaround Rule 3.

    If you don’t have any competitors, you don’t have a market, the S&M folks at numerous startups always told me. But too many companies — from startups to the Fortune 100 — are so paranoid about the competition that they take their focus off the customer and the product or service that inspires that customer to keep giving you money. Yours would not be the first company to find that, though it has vanquished all conceivable competitors, it is rapidly going down the tubes because you lost your customer focus. At that point, the only sane action for the Board to take is to sell your carcass to somebody else — or just pull the plug.

    This gets me thinking… how much intellectual and financial capital is wasted in this manner? How sure are we that the dominatrix-predator model we use in this industry provides the best outcome to the customer, the financiers/shareholders, or society at large?

  3. Since I discovered GigaOM,I have always enjoyed the stories which I find not only very interesting, but as a veritable platform for story leads. Please, add me to the list to receive Comments, which as the complementary stories, I hope to enjoy.
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  4. 1, 2 and 4 are interesting and I’ll read more about number 3 before accepting it as a critical step. I’m in agreement about the need to align around a common objective however I’m not convinced it needs to be labeled as an enemy. I’ll read further. Thanks for the interesting thought.