These five strategies can help CEOs successfully lead their businesses out of a slump.
Turnarounds are inspiring. The ability to rebound after a poor-performing day or decade shows the power of resilience and the determination to find success even when it seems unreachable. Every CEO should seek to become a turnaround CEO.
It's challenging to know where to turn when a company is declining, but by following a turnaround playbook, you can get your company back on track. The playbook includes a set of strategies that will help the leader determine what decisions must be made and when to make them. CEOs are wise to use the turnaround playbook as a resource that will help them to succeed.
One such CEO who was able to turnaround his company was Chris Lamontagne, who leads TeeSpring, a social-commerce platform used to create and sell products online. Chris started his first business at age 20, is a growth-focused leader and has played vital roles in many fast-moving tech companies.
Using the playbook he designed, Chris was able to take a company that was losing money and grow it to gain profitability. During that time, he enhanced the company's social commerce, engaged a new audience and built products to create awareness through its platform. Following the strategies in his playbook, Chris led his team to recategorize their business and bring clarity to their customers, supporters and funders. Chris worked to build a new partnerships ecosystem (with the likes of YouTube, Amazon, Twitch and eBay) and develop a new fast-growing user base of content creators who create merchandise for their fans.
The five plays that should be in every CEO's playbook
1. The profitability play
Many businesses bleed cash when they launch a new product or idea. It is crucial for the CEO who is leading the charge to move the company to profitability – and do so as quickly as possible. This play consists of educating the entire organization about the business's cash standing and helping everyone in the organization take responsibility to get to profitability. The CEO will know that the team takes ownership when the team takes responsibility to watch costs and reduce unnecessary expenses.
It is essential for every CEO who wishes to lead a turnaround to focus on the numbers every day. Turnaround CEOs recognized that every penny counts, and every penny must be counted. When a turnaround CEO focuses the team on profitability, the team understands the value of taking care of the customer.
2. The clarity play
I teach every CEO that I work with this simple phrase: "When the leader is clear, everything becomes clear." CEOs who wish to turn around their companies must push for clarity about who they are and what they are trying to accomplish. The leader must help everyone in the organization embrace the true identity of the organization.
One tool that Chris used with his team to push for clarity was going through the exercise of asking each person to explain the company so their mom could understand what they do. This simple question is a fantastic exercise for any CEO of any company. Can you, and every member of your team, explain your company and what you do so well that your mother could understand it? A company that does not know who they are or what they are about will not succeed in the marketplace.
3. The awareness play
Leaders are visionaries. Leaders have the ability to see into the future and develop a company or organization around the possibilities of what could happen or what could make life better for others. However, the vision can sometimes become blurry. Companies led by CEOS that lack vision are often buried by their competition.
Chris made an unusual decision when he assumed the CEO role at Teespring. He decided to spend the first three to four months meeting with people in similar businesses to hear what they were doing and what they believed was coming in the future for their industry. When asked about why he would make such a decision, he responded, "I had to find out what success looks like for our company. I knew that the answers were not in Teespring. That was today's business, not tomorrow's business."
CEOs who wish to turn around their companies must lead with a vision of what the business could be. They must look ahead of the competition and make bold decisions that others in their industry are afraid to make. They must get out ahead of the pack if they are going to get out from being behind.
4. The team play
It takes a team to make a turnaround. After a leader knows where they want to go, they must focus on getting their team to go along with them. Part of the team play is instilling in the team the belief that the organization can be successful again. The CEO must embrace the role of chief belief officer. They must inspire and call others to believe in the vision. The CEO must communicate the value of what the company is working to accomplish and that all the hard work is worth the effort.
Turnaround CEOs understand the value of having the right people doing the right things in the right ways. People will either bring energy into the company or cause the company to expand energy in an ineffective way. This might be the most crucial play a turnaround CEO makes as they gather people who have high energy that will help to energize the company.
5. The execution play
The execution play happens by putting the strategy to work. Companies that are in free-fall mode have a difficult time making decisions. These companies paralyze themselves, because they are afraid that they will make the wrong decision. They analyze numbers and data and never move to work the strategy that will lead to success. When people know what to do and how to do it, they are empowered to execute. During a turnaround, the CEO must focus on encouraging and inspiring the team to act with intention.
Turnarounds are not easy. However, every business will have periods when they start to decline. When a company does not know how to recover after a setback, they are doomed to continue a downward spiral until they close. These five plays that Chris Lamontagne used to help turn his company around should be embraced by every CEO who wishes to guide their company through a downturn back to a positive future.