Photo courtesy of Thomas Hawk via Flickr.
What may start out as a successful, vibrant company can sometimes go south — way south. But even struggling companies can sometimes be revived with proper strategy.
Most employers and employees hope never to see their companies on the brink of bankruptcy, scandal, or dissolution. It still happens, of course, but and with the right tactics, huge mistakes can sometimes be turned around.
Here are some solutions distressed companies have used to resurrect business in the past.
Changing the culture
Company culture is considered one of the most difficult things to change about a company, but when culture is noxious and contributing to a business’ failure, it has to be seriously addressed.
One example of this is Yahoo, which under CEO Marissa Mayer’s leadership began to undergo a massive culture shift from a bureaucratic growth-stifler to a more employee-friendly space with strong middle management and clear strategy. So far Mayer’s efforts have raised company stock and solidified Yahoo’s reputation as an employer.
Other companies like Dynegy Inc and British bank Barclays PLC have undergone similarly critical culture changes to revive their businesses. It’s a long process, and a sometimes risky one, but if it’s done right — incentivizing employees, and therefore productivity — results follow.
Bringing in new/old leadership
[contextly_auto_sidebar id=”w733dG5cvAPQf8oQCtDl5F8Wm0p1QyGW”]Struggling companies, in times of crisis, often hope that new leadership will steer their business away from total calamity. New blood and ideas have succeeded in reviving zombie companies, but more often than you think, rehires can too.
This may happen when a shift in leadership and strategy backfires, causing companies to soul search and realize what they needed all along were the individuals that made the businesses successful to begin with.
Steve Jobs, cofounder of Apple, was rehired in 1996 when stock prices plummeted. And we all know where the story went from there. More recently, JCPenney, Aeropostale, Twitter, Reddit and more all rehired old founding CEOs.
Leanness & Layoffs
Sometimes the only way to save a struggling company is tough love and lots of cuts, especially if business is in the financial pits. This streamlined restructuring sometimes means major downsizing, layovers, project and product cancellations.
For example, when pharmaceutical company Merck & Co found itself embroiled in a scandal in 2005, new CEO Richard Clark closed five plants, cut 7,000 jobs, settled lawsuits, and as a result, doubled the company’s stock price in three years.
Former GM CEO Ed Whitacre (coincidentally, a rehire) acted similarly in 2007, bringing the company from bankruptcy to a record-breaking IPO in just six months. His cuts earned him a reputation as “GM’s Reaper,” but brought the company’s status to new heights.
Whether it be a change in culture, leadership, or structure, struggling companies that address their issues, outline goals, and aggressively meet them may have the best chance at doing a 180 to avoiding their untimely demise.