How organisations bounce back

Even in the best managed organizations, unexpected occurrences can throw a spanner in the works. An error of judgment, a new government policy, a new technology or a natural disaster may turn the tide violently against an otherwise good company, upset it and leave it prostrate. The truth is that no organization is immune to upset, but what distinguishes great organizations from ordinary ones is how they respond to, and handle, downturns when they occur. Crisis time is a trying time but the onus is on the leadership to provide a way out of the situation and return the organization to its winning ways. The same crisis that sweeps some organizations under makes some stronger. The same crisis that leaves some organizations broke may promote others to prosperity. A crisis that relegates an organization into the backwaters may propel another into prominence. It is a matter of how the crisis is handled.

When there is a crisis, leaders must be creative and leave nobody in doubt that they understand the challenge and have the capacity to turn the situation around. Anything short of that could worsen the situation and a seemingly ordinary crisis could leave the organization worsted.

Turning Continental Airlines around

In 1994, Gordon Bethune left his cushy position at Boeing as Operations Executive to become the Chief Operating Officer at Continental Airlines. By this time, Continental Airlines had filed for bankruptcy protection on two occasions and was at the verge of another bankruptcy and probable liquidation. It had just enough money to stay in operation for a few months and its stock was almost worthless. The company’s notoriety for flight delays was legendary. The crisis created by the company’s failure to keep to its flight schedule drove customers away from it, which resulted in its fortune heading south. But within two years, Bethune, who became the CEO six months after joining the company, returned Continental Airlines to respectability and profitability. By the end of 1995, the company which posted a loss of $600 million in 1994, reported a profit of $225 million. Bethune led the company from being the worst among the biggest airlines in the United States of America to being ranked among the best in just four years. The ranking was consistent until the company eventually merged with United Airlines in 2012.

• I’ll clear salary arrears in 6 months —Adewale

How did Bethune achieve this seemingly impossible feat?

On assumption of office, he came up with a strategy known as the Go Forward Plan. The plan was hinged on four plinths. The first was Fly to Win, the marketing plan. With this plan, the company opted to focus on the routes that gave it the highest returns. So, it chose Houston, Newark, Cleveland and a few other highly lucrative routes. The second was Fund the Future, the financial plan. The company restructured its balance sheet, sold off non-strategic assets and vigilantly tracked its money. The third was Make Reliability a Reality, this was the product plan. Continental Airlines delivered on its promise by ensuring that flights were on schedule. Lastly, there was Working Together, the people plan. The leadership changed the way it was relating with the workforce and made working at Continental Airlines a pleasantly unforgettable experience for the workers.

With the strategy, the employees became energized, more productive and more creative in service delivery; the company’s reputation got better, old and new customers flocked to the company; resources were better managed, revenue soared and the bottom line skyrocketed.

How to bounce back from failure

Here are some steps involved in bouncing back from failure.

Learn from the experience

Though failing could be quite painful, it is not without its gains. One of the benefits of failing is the lessons learnt. Therefore, when a company fails for whatever reason, the focus should not be on the pains and the losses occasioned by the failure, the focus should shift to the learning experience offered by the situation. Doing this will enable the organization to get better and avoid such pitfalls in future. What would make failing a monumental disaster is the failure to appropriate its lessons.

Thomas Edison, who invented the electric bulb, carried out more than 10,000 experiments before getting it right. Rather than moaning his many failed experiments, Edison said, “I have not failed. I’ve just found 10,000 ways that won’t work.” What the inventor did was to convert his failures to learning opportunities. He eventually got the invention right because he learnt from his experience and never repeated mistakes.

Michael Jordan is regarded as one of the greatest basketball players ever. However, this outstanding player failed many times. According to him, “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty six times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”

What Jordan did not say is that he succeeded because he learnt from his failure.

So, an organization that is experiencing failure should make the most of it by converting same to a learning experience.

Change your thinking

Problem lingers oftentimes because the thinking about it is wrong. Moving an organization out of the red back to profitability requires new thinking. A thinking process produced the current situation, unless the thinking changes, the situation will not change. Every action or decision is a product of a thinking process, therefore for the result to change the thinking that goes into taking the action or decision has to change.

According to Albert Einstein, who propounded the theory of relativity, a problem cannot be solved at the same level of thinking that produced it. To move from failure to success, the thinking about the situation has to change. Until the thinking changes, the actions will not change and neither will the outcome.

It was also Einstein who stated that doing the same thing over and over again while expecting a different result is the definition of insanity. So, to experience a different result, organizations that are mired in failure have to change their thinking.

Focus on what brings highest value

To bring a prostrate organization back on its feet requires streamlining its activities. In a time of crisis, the management of both time and financial resources is critical; neither should be wasted. Therefore, it is of necessity that only issues that are vital and have the capacity to change the experience of the organization should be concentrated on. Only the activities that bring the highest value should be of interest to the leadership. Not only will doing this minimize wastage, it will also maximize revenue generation.

MTN, the communication company, found 2016 particularly difficult. The company reported an equity loss on a 51 per cent stake held in Nigeria Tower Interco, an infrastructure company, just as the Nigerian Communications Commission slammed a $5.1 billion fine on it for failing to disconnect improperly registered SIM cards. Although the fine was later reviewed to $1.1 billion, the two issues as well as others caused the company to pose a net loss of $260million at the end of 2016.

The company realized that it had to be extra creative in 2017 to move away from the red and make its investors happy. So, in 2017, MTN concentrated on data provision more than any other of its activities because that was where the highest revenue could be earned. By concentrating on data provision, MTN grew its data revenue by 86.6 per cent and consequently its total revenue by 11.4 per cent

As a result, by the end of 2017, MTN Group bounced back to profitability with a $278.2 million net income.

Take a look at your strategy

Strategies determine the strength and profitability of an organization. But a strategy that runs a company aground cannot lift it off the ground. Therefore, to bounce back, a company that is down needs a new strategy. That is what Bethune did for Continental Airlines. He came up with a new strategy that redefined how the organization was run. With the appropriate strategy in place, bouncing back to relevance and profitability became a cinch for the company.

Most organizations run into problem when they run on the same strategy for too long a time. A strategy can become dated, if it is not regularly reviewed and updated. So, to avoid being caught on the wrong foot, great companies regularly review and, if necessary, change their strategies.

Tweak the corporate culture

Every workplace has a culture. If the culture is right, the output will be great and this will impact positively on the result. A negative culture cannot produce a positive result. Therefore, it is incumbent on the leadership to institute the right culture in the organization so as to boost employees’ productivity. A workplace culture is the domineering mindset among the people; the way workers feel about themselves and the organization they work for. The mindset affects everything about the people and the organization because it determines how the organization and its workforce are perceived by the outside world.

Every organization trying to leap out of the red should endeavour to put in place a culture that stimulates creativity, encourages trust, rewards industry and engenders friendliness. Creating such culture is sine qua non to speedily springing out of the murky waters of failure.

Last line

No organization is ever far too gone to be salvaged, provided there is the will to do it.