Turning Stuff Around

A blog about the grit, grind, and occasional glory of turnarounds.

Tag: business transformation

  • Tenure: A Double-edged Sword

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    Tenure: A Double-edged Sword

    Every organization has its ‘village elders’—those long-tenured employees who have been with the company for 10, 15, 20 years (or more!) Their tenure brings a wealth of knowledge, deep trust, and a sense of solidity that can anchor an organization. But what happens when that anchor becomes a weight that holds it back?

    Edge 1: The “Bad“

    Tenure has a tendency to breed stagnation. Over time, tenured employees can develop a resistance to change as they try and keep things “as they’ve always been”. This mindset defaults to the known and familiar, while pushing back on the new and riskier. Fresh ideas may be dismissed too quickly, stifling innovation and fostering a culture of complacency.

    It’s easy to picture this: an aspiring young developer consults a tenured principal. She demos something new, something innovative, only to be advised to use the existing tech. “We’ve always done things this way” she hears. The fire dies out. The idea is lost.

    Edge 2: The “Good”

    But tenure isn’t all bad. Just as it can stifle progress, it can also be one of your greatest assets.

    Beyond being beacons of trust and continuity, tenured employees are also incredible sources of historical knowledge. These individuals often hold key insights that can help you avoid repeating past mistakes. They’ve been-there-done-that, and can provide a historical lens into what’s worked and what hasn’t for the company. Their institutional memory can serve as a safeguard, offering advice that could prevent you from unknowingly stepping onto the same landmines of the past.

    The Turnaround Context

    In a turnaround, both “edges” can make or break your efforts. On the one hand, a turnaround demands agility, fresh thinking, and a willingness to challenge the status quo. On the other, not learning from past mistakes and avoiding known pitfalls can be very costly—almost detrimental—to creating the trust and momentum needed.

    So, should tenure be curbed or promoted? The answer is both! And the key is balance.

    Maintaining the Balance

    Maintaining the balance is not as complex as you may think. First, you will need a good measure of the tenure ratio which, as its name suggests, measures the proportion of tenured people within a given group (a team, a division, or the entire company.) Start by defining the number of years that constitute tenure for your company (this varies by company size, industry, and the organization’s current growth stage). Once defined, measuring the ratio is straight forward:
    For the purpose of the exercise, let’s assume that tenure is reached after 4 years. Now consider a team of 12 developers, of which 7 have been with the company for over 4 years. Your tenure ratio for this team is therefore 60%, indicating a strong concentration of long-tenured employees.

    Applying this calculation to the rest of your teams, gives you a clear picture of tenure concentrations throughout your organization. And from there you can plan your balancing initiatives. Here are a few of those initiatives that have helped me in these situations:

    • Reassign individuals: balance tenure across teams
      The benefits of this are obvious: under-tenured teams enjoy an injection of expertise, and tenured teams are exposed to fresh ways of thinking and new perspectives. The challenge with this initiative is, well, that tenured people resist change (and moving desks), so this needs to be managed carefully.
    • Realign work: mirror tenure with subject matter
      Alternatively to reassigning tenured members, encourage them to become subject-matter experts of critical systems and shift their focus to maintaining them. While maintaining systems may seem mundane, it often involves complex technical challenges that benefit from the expertise of tenured employees. Furthermore, it indirectly supports innovation by giving the rest of the team the room to move faster on other newer initiatives.
    • Reprocess for ideas: purposefully enable fresh perspectives
      Beyond reassigning individuals, and realigning work, be sure to implement processes that encourage questioning of the status quo, exploring new ideas, and overseeing their implementation. Though the initial reaction to the words “process” and “innovation” appearing in the same sentence is often an eye-roll, when they enable individuals to speak up about new ideas and ways of doing things—and be heard—they are good! Especially in more tenured organizations that may require that foundation to break the default thought cycles.

    Tenured employees can be your greatest allies or your biggest roadblocks, depending on how you engage them. Consulting them early and often helps you leverage their wisdom while avoiding past pitfalls. With that in mind, leadership plays a crucial role in balancing tenure. By fostering a culture of collaboration and openness, leaders can ensure that tenured employees feel valued while encouraging innovation and adaptability. The goal isn’t to sideline or discredit their experience but to channel it in ways that drive progress and enable your goals.

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  • Sustainable Profitability

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    Sustainable Profitability

    As we all know, there are only two levers you can pull to drive profitability: cost cutting, and growing top-line. In stable times you are constantly pulling on both, aligning investments against forecasted business performance. But in a turnaround, things are not as straightforward. The top-line lever appears, at first glance, to be “rusty” and possibly jammed, while the costs lever often has an all too strong gravitational pull.

    The Cost Cutting Lever

    In a turnaround, launching a cost-cutting initiative may seem as an obvious first step. It’s quick and decisive—you give the order to reduce expenses, say by cutting 10% of the workforce—and manage through the fallout. While it may provide short-term relief—and seem like a quick path to profitability—it rarely is a sustainable solution. The “cleaver approach” will not fix the inherent inefficiencies that often plague organizations.

    For a cost-cutting to be impactful, it needs to consider the bigger picture and align with the long-term, strategic plans. For me, using the zero-based budgeting approach has been more effective in creating sustainable cost structures.

    Zero-based budgeting requires you to build your budget from scratch. For example, instead of saying “We had 100 engineers last year, so we need 120 engineers this year!” (assuming 20% growth), you and your head of engineering start with a blank slate. Together you consider the product plans, the technical debt strategy, new technologies as well as other factors, and appropriately align headcount and investment.

    Ultimately, the biggest benefit of this approach is that it forces you to stop and think rather than make inertia-based decisions. It brings to the surface the hard questions (and decisions) required to set the company on the right path.

    The Growth Lever

    Driving top-line growth is a different challenge altogether. You’re not shedding something you have, you’re building something you don’t. This requires a clear strategy, a strong product lineup, and seamless cross-functional execution. It requires the village. And since, in a turnaround, the village may not be, well, a village, it can take time to materialize.

    That’s why you need a bridging strategy—a way to achieve short-term revenue gains to keep the business afloat while laying the foundations for future growth.

    Some of the tactical initiatives that have helped me in the past:

    • Leverage existing customers. Acquiring new customers is a long-term initiative. This is not to say you should not pursue this, but working with your existing customer-base is often easier and quicker. Focused upselling and cross-selling initiatives can lead to fast, much needed, gains.
    • Optimize pricing. Review your pricing models for adjustment opportunities. Sometimes, incremental price increases or new pricing tiers can unlock significant revenue without major operational changes.
    • Identify and prioritize quick wins. The so called “low-hanging fruit”. Look for underutilized sales channels, untapped market segments, or underplayed products. Walk the halls, talk to people—you’ll be surprise at how many ideas are waiting to be uncovered.

    Keep in mind that tactical growth is about small wins that buy time and prove to your team that progress is possible. It also provides some financial flexibility to fund longer-term initiatives, such as product development, organizational redesign, or a revamp of operations. Lastly, deploying tactical initiatives can help you test business hypotheses that can further help hone your long-term strategy.

    The cost-cutting and growth levers are interconnected. Pulling them effectively provides you the breathing room to sustain the business through the turnaround, while aligning investment plans for the long-term. This creates a stable foundation that drives sustainable profitability, ultimately allowing your people and business to thrive well into the future.

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  • Silos, Silos, Everywhere!

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    Silos, Silos, Everywhere!

    Silos are one of the most pervasive and most persistent barriers to success. Yet, they seem to exist in nearly every organization, big and small, despite the fact they stifle collaboration, breed inefficiency, and often create a “them vs. us” mindset. In a turnaround, addressing silos isn’t optional—it’s critical to driving meaningful change.

    At their core, silos are often an unintended byproduct of growth and complexity. As organizations scale and expand geographically, physical sites are formed, functional boundaries are better defined, and management layers naturally develop. While these structures bring clarity and focus, they also create physical, operational, and cultural divisions within the company—silos!

    The problem with silos is that once they are formed, they are difficult to dismantle. Factors like geography, leadership influence (especially in highly political organizations), or fear of change, often keep them alive. Left unchecked, silos will drain your organization of its full potential.

    Building bridges

    There are two ways to address silos: you can either try and beat them, or you can try and join them… together! I’ve found the latter to be far more effective, productive, and surprisingly easier to achieve.

    Breaking down silos isn’t about dismantling teams or forcing a change to working processes. It’s about creating a culture of connection and shared purpose—building bridges. Though changing (or building) culture may sound like a daunting task, with committed leadership and a clear plan, it can happen faster than you think.

    Here are three key areas to focus on as you build your plan:

    • Nurture a unified vision—a shared goal
      This is by no means the corporate vision statement. But a real reason for being. It’s a call to action that rallies people behind a shared purpose, connecting their day-to-day work with a bigger, more meaningful goal.
      A turnaround is a perfect spark to light that fire (crises usually are.) Don’t be afraid to use it.
    • Encourage cross-functional collaboration
      Once you’ve clearly articulated the problem statement, encourage collaboration by bringing people together—preferably in-person to bridge geographical silos—and empower them to figure solutions out on their own. Most people want to contribute meaningfully, and feel part of something bigger. Your job is to promote this mindset, and make sure your leadership team actively supports it. Collaboration is never forced; it’s enabled.
    • Improve communications across the organization
      One of the biggest factors keeping silos alive is poor communication. When one silo hears one message, and another hears something different, alignment becomes impossible and silos persist. Consistent, and transparent communications are key to bridging silos and creating a cohesive organization. Establish your way of communicating to the broader team and commit to it.

    At my company, I held a global standup meeting every two weeks. We flew teams across geographies for in-person workshops. Leadership actively visited offices worldwide to drive alignment and communicate our shared goal. We transparently tracked progress using a set of OKRs, and even created a hashtag for our internal communications: #BreakingDownSilos. Ultimately, we built strong bridges across the functional and geographical silos we faced. How did we know we succeeded? We saw measurable improvements across all our internal culture survey metrics; Alignment, in particular, was up an impressive 11% year-on-year!

    Silos may form naturally, and are not always “bad”. What matters is that you don’t allow them to define your organization. Breaking them down and building bridges requires persistence, and nurturing a culture that values collaboration. The returns on this investment are huge: a unified organization, ready to tackle bigger and bigger challenges head-on.

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