What’s Key When Reviving a Troubled Business?
Bernardo Quinn, global director of HR for Telefonica, offers advice for companies on the brink of disaster
Identifying the problem, leadership and consistent implementation of the plan are the keys to saving a company in distress, according to Bernardo Quinn / Photo: Javier Arias
On his return to Apple in late 1996 after his previous ousting, Steve Jobs encountered the company he had founded 20 years ago in dire straits. On the verge of bankruptcy, Jobs opted for a radical solution to save the business. He axed 70% of its products, and prioritized only a handful of projects. In 1998, he released the iMac. Three years later, the iPod. In 2003, he created the iTunes Store. The iPhone arrived in 2007, the iPad in 2010 followed by iCloud in 2011. In September 2011, Apple's market value exceeded Microsoft's by 70%, and the company's sales reached over $108 billion.
The astuteness and savvy business outlook of Jobs saved Apple from impending bankruptcy brought on by poor business strategy. “It's equally important to know what to prioritize as it is to be clear about what we want to do," reflected Bernardo Quinn, global director of HR for Telefonica, during a continuous education session for IESE alumni moderated by Professor Francisco Iniesta.
Quinn touched on his three-step methodology to revive a struggling business: What is the history? Who is on board? How will it be implemented with consistency? These steps are presented and analyzed in his latest book, Salvados in extremis (Lid Editorial). “It's important for us to be transformed as companies and adapt to the change, keeping sight of who we are and what we do. We must pay attention to our surrounding ecosystem, but never forget where we are," said the Telefonica executive.
Quinn noted that, due to lack of knowledge, many businesses are unable to adapt to transformation processes entailed by changes. “At this point, change is not only possible, it is vital for the company's survival," he added.
When the company identifies the problem, says Quinn, it is crucial to "create a sense of urgency" to speed up the reaction. From this point, it is essential to "set a direction, a vision that clearly traces the path to follow.” After this first step — identifying the history — comes the second: getting everyone in the organization on board.
At this point, the efforts of the person leading the company’s renewal becomes paramount. It must be a strong and hands-on leader. One who is both willing and able to face the challenge; surrounded by management and staff all rowing in the right direction. "Everyone who works for an organization must understand that change begins with themselves," he said. For this reason, clear and transparent communication between all departments of the company must be established.
The third and final step is to implement the plan. The development and implementation of strategic agility will serve to ensure that things are not done by magic, but thanks to people's drive, courage and flexibility.
“For a transformation process to succeed, there needs to be a level of energy that can be derived from two main elements: a sense of urgency throughout the organization and a vision for the future," concluded Quinn. Therefore, the overhaul needed to keep the company alive requires changes at the heart of the organization and the people within. Changes that, if not be carried out in a timely and effective manner, could prove catastrophic for the future of the business.