Business turnaround is all around us. The need for it, we mean. The amount of businesses in distress far outweighs those demonstrating dramatic u-turns successfully. But turnaround does exist. And where any business in distress is looking for that 1 magic trick that will shift the downward trajectory back towards profit, for most successful turnaround stories – it was based on finding the right person, with the right amount of experience and courage, to try something that had never been done before.
We share 3 stories of businesses who were on the brink of collapse – but through a lot of hard work and innovation, turned their organisations around and lead their markets today.
Faked it till they made it
Reddit, a popular website for news and discussion, was founded in 2005 by Steve Huffman and Alexis Ohanian. As with most new business, when it launched, the platform had no users, no readers, no interest, leading the founders to create several fake accounts, holding fake discussions until some new accounts and members started trickling in.
The potential was there – and the membership started to grow. So much so, that in 1 year, it had caught the attention of publisher Condé Nast, who bought the platform for just under $20 million. As of 2018, Reddit had a subscriber base of over 550 million users making it the 6th most visited website in the world.
Changing course of your market route
Who would ever believe that Marvel – home of Spiderman, Iron Man and the Avengers – at one point faced critical crashing when, in the 90s, the comic book market headed for serious downfall. In fact, when the crash happened, Marvel Comics had lost almost everything – and there was no amount of kryptonite that would bring them out of their downward spiral – except for 1 thing. They switched their focus.
Changing their strategy from print to movie was probably one of the most successful turnaround strategies in history, as the team said goodbye to the industry that had made them a household name, and turned their focus wholeheartedly onto one that was so big, and so influential – Cinema. It worked – and today, many of their franchises are billion-dollar success stories.
Moving from “What we want” to “What our customers want”
The legend of the dramatic Starbucks turnaround is heard far and wide. A company that has had its shares of ups and downs, took a radical change of approach to completely turn a business around. And it worked.
The economic crisis of 2008 hit Starbucks hard and they had to close around 1000 stores, and experienced a 28% profit loss over the course of 2 years. That’s nothing gradual. That’s a painful, immediate loss. But when things seemed like they were headed for certain failure, Howard Schultz, a previous CEO of the business, took back control with a clear message sent to all of the Starbucks staff: “The company must shift its focus away from bureaucracy and back to its customers.” And that’s what they did. Within a couple of months, the business had changed their strategic infrastructure to build one based on technology, free thinking and community involvement. With the introduction of their My Starbucks Idea initiative in 2008, the company has transformed the way they serve their customers and deliver new products and now continues to dominate their market globally.
If your business is in distress, and you’re looking for help to get you, your team, and your bottom line, back on the growth path – then we’d love to help. Get in touch today.