Originally written December 13, 2022–
Change practitioners sometimes find themselves called in to support or lead a change effort for a business turnaround project. The word “turnaround” evokes a sense of something being “wrong” and there is something that must be corrected. Further, these actions need to be taken with some sense of urgency due to expectations of an executive team, a board of directors, or even external business shareholders. Business affairs prior to the announcement of a turnaround have gotten to the point that the current trajectory, practice, or path is no longer viable and something different must be done.
The casual observer might think that tagging a project as a “turnaround” would summon a new set of rules of operating or a unquestioned shift in employee behaviors, or everyone taking on a “business as unusual” mindset. These aspirations couldn’t be further from the reality of what actually happens. This post is the start of a series specific to turnaround change management. These types of projects still require a focus on the fundamentals of upfront assessment regarding the scale of change needed, a clear understanding about the consequences of failure, and an in-depth understanding about the sponsors’ resolve to deliver the promises made as part of the turnaround effort.
“Turnaround” as the Focal Point
I would argue that a turnaround initiative, from a change practitioner’s perspective, is a change project that has bit more early soberness to it than projects that do not carry that label. This phrase is often used in organizations to alert people that something needs to be “fixed”. The first question that must be answered is understanding exactly “what” are we turning around here? The often-cited reason for a turnaround is financials which can vary from diminishing revenues, “out of control” operating costs, or even reduced profit margins. The finance team in an organization plays a key role in preparing and regularly sharing the numeric story about what’s not working juxtaposed against specific short term targets which must be achieved in a 6 to 18 month timeframe.
Using the smoke vs. fire analogy… the “smoke” is people saying we need to turn things around … things are not working the way they should. The information is helpful, yet still not specific enough for action. The Finance team can point to the “fire” that needs to be addressed. Turnarounds can start with the need to deliver different types of financial results based upon promises made by the executive team to a board of directors or, for a publicly traded organization, delivering on certain profit, revenue, or growth targets. Yet, simply focusing on improved metrics easily can ignore addressing the mindset and behavior shifts that underlying improving the metrics.
Don’t be Misled
At first glance, a practitioner might say “wow the case for change is already made… look at those numbers that need improvement.” Certainly the financial improvements outlined in an assessment can be helpful, yet I would also offer that these can be misleading as to the true magnitude of the turnaround required.
Turnaround situations can offer the practitioner a doorway that, in other circumstances, doesn’t appear. First would be access to executives who, in other types of change initiatives, might be reluctant to meet with the change practitioner or minimize time allocated to them. In turnarounds, executive teams can be more open to answering questions about “what must change around here?”. The stakes are often higher, change or go out of business, or be bought, or an executive or whole executive team may lose their job. Translated into the change practitioner’s language, there’s a clear and visible consequence for not changing that the executive team, often the ones who will be sponsors of the change, can understand.
Assumptions to Prove Out
One of the major watchouts I would offer is checking your assumptions. The initial allocation of time and the seeming clarity by the executive team should not be confused with their commitment to actually shift. Unfettered access and building a trusted relationship with a sponsor are table stakes to becoming a valued change practitioner. Here are some assumptions that the practitioner must clearly interrogate before proceeding to far along in their change management strategy:
| Assumption | Counterpoint |
| People are more willing to do things differently | Not necessarily, especially if people do not understand what has to be done differently or it threatens that person in some way. |
| Leaders will act with a sense of urgency on issues that before they have ignored | Not necessarily, unless those issues they have ignored are deemed as important either by them or by a leader that holds a consequence which that leader cares about. |
| Change management will be given the resources and support required? | Support will only be given if the leader believes that the change management practitioner / team can help them deliver on the promise the turnaround is set to deliver. |
| People will prioritize work required by the turnaround above other priorities | People won’t do anything different unless their direct leader signals it needs to be done |
When you look at this list of assumptions and realities, you quickly see that the issues that a turnaround faces are the same kinds of issues any change project faces – replace the word “turnaround” with “change project”. Understand the degree of change is a fundamental first step in the diagnosis phase.
What does it all mean?
The takeaway from this initial post is for the practitioner to make sure they stay grounded in the fundamentals of their craft. The elements of good diagnosis, testing assumptions, understanding the size & scale, level of commitment, and consequences of failure are important here. View the opportunity to be involved in a “turnaround” project as the chance to leverage a specific set of skills that are likely even more critical to the practitioner’s role and the project’s success than in other types of change initiatives.
The next post will examine the concept of the pressure test and it’s application in diagnosing the size/scale, leader commitment, and consequences of failure. The post will also discuss some of the potential reactions the practitioner should prepare for in gathering their data and the level of “air cover” they should secure before proceeding.