Turning your business around
Business turnarounds require more than cost-cutting. They demand courageous leadership, honest assessment, and a clear vision that inspires people to commit to the journey.
The real threat to your business isn’t disruption from the outside—it’s the complacency that comes from repeating last year’s success while the world quietly moves on without you.
Nothing is forever. Not the things you own, not even you. The same is true for your business model. How you make money today will change in the future. Perhaps not today or tomorrow, but eventually it will.
Key takeaways
- You need to challenge your own successful business model before the market forces you to, because it’s far better to disrupt yourself than let your competitors do it for you.
- Leaders must actively create space for new business models and innovations, even when current profits are strong, instead of falling into the trap of believing today’s success guarantees tomorrow’s survival.
- Convincing shareholders to invest in change requires you to clearly articulate not just the risks of innovation, but the greater risks of standing still in a world that will inevitably move on.
It’s our responsibility as business leaders to anticipate this. At least we should try to understand when and how. We must decide when it’s time to try new business models, where to place our bets and which investments to make. It sounds a bit harsh, but we need to be prepared to eat our own children (because it’s better that we do it ourselves, than that our competition does it for us). Not too early, but certainly not too late!
But this is not easy! Looking in the mirror is something we all find difficult. And it’s even harder when we are making money today with a proven business model. Imagine: you’re running a business that is making good money year after year. Each year you go through the budgeting process. With finance you’re trying to predict the future. Basically, you’re promising your shareholders how much money you’re going to make the next year. The suggestion is that we can control the future.
But this time it’s different: you’re also starting to have a discussion internally on the innovations and new things that you believe you should start to try out. That’s a tough sale. Because your shareholders will often say: why change (and waste money)? We’re making healthy money and we see no reason why this will change next year? Why rock the boat? Why now?
So, orchestrating change as business leader requires the following from you:
Not falling victim to inertia. Eyes wide open!
Looking into the mirror and deciding when it’s time to change
Generating ideas for different business models
Selling the change (and the investments needed) to your shareholders
Deciding on the people you bring onboard to create the change. Who is ready in your current team?
Make sure you start this change process early enough in your business cycle, ideally when you’re making enough money to keep your shareholders happy. This gives you room to invest some of the additional money into new business models.
'One cannot manage change. one can only be ahead of it.' Peter drucker
Change is complex. So much of it starts with the business leaders orchestrating change. There’s a handy framework within which to tell the story of a product (or service’s) lifecycle. It’s called the sigmoid curve. I recommend you watch a short video explaining the Sigmoid Curve with your leadership team. And as follow up, have the discussion with your team. Observe how your leaders are participating and contributing to the discussion. It will already tell you a lot where you are today and what you can expect from your leaders.
The hardest move in leadership is sacrificing today’s comfort for tomorrow’s relevance—because in the end, it’s not the market that kills great companies, it’s their refusal to reinvent themselves.
Over to you.