You don’t learn the skills to recognise or fix a turnaround on an MBA, so this climate is now catching even the best minds out…
Specifically: unlike Thomas Cook which was formerly a successful profitable business formed 148 years ago. wework formed the characteristics and psychology of a distressed business from the outset…!
The inflexibility of the Thomas Cook business model to cope with shifts in revenue predicated its failure. This created an insurmountable gap that eventually cost too much to fix, justifying its liquidation.
wework, however, was founded upon a flawed business model from the start. It scaled with an expectation that somehow its ability “to change the world” would fix the operating model. Not so: 9 years on, the incredible cash losses amassing to double its revenue brought home the reality that not even wework’s “mission to elevate the world’s consciousness” could fix the wework operating model” more on wework!
Whilst the digital climate has got tougher, it is amazing how “leaders and investors” remain inactive, unable to recognise the sign of a turnaround so unable to change their action?
Last month, I ran an introduction winningthinking.uk session with a very capable group of tech startup entrepreneurs, there were some notable observations:
- None of them indicated they knew what drove them (there are normally 2 or so in a large group)
- They all indicated that their business purpose was driven by
- growth and market domination (the tech feudal mantra)
- Conflicting with profit, relationships and sustainability (this is a “wework type” blindspot!)
- It took 4 hours for them to identify their own or the causes blindspots: it’s difficult (initial response “are we too stupid?” etc)
- As there was insufficient diversity at exec level none of them specifically actioned their observations (diversity and courage is critical to taking new action, as an aside this illustrates the flaw in and blindspot recruiting for values!)
- None of them knew how to recognise thinking (confusing talking with thinking and confusing using “The 5 Whys” (a sound means of checking strategy) as a means of checking thinking).
At the end, we reviewed the 2 case studies to apply their new skills, at which point this great cohort of entrepreneurs began to identify the strategies to unravel the specific underlying thinking that was causing these company deadlocks, rather than waste time on the business analysis and symptoms (the MBA blindspot).
www.winningthinking.uk was again proven to prevent such eventualities and check these leaders capability and if they had the courage to change their actions.
The warning signs are often very bland so get missed, “we are, we have done what we can”, “we’ve got it covered”, “it’s the market”, “when “x,y,z” happens we will be OK..”
These are also the same types of statements and blindspots that cover serious holes in a balance sheet…!
I can think of at least 10 far larger UK organisations in exactly the same situation… But I won’t call them out, but I do hope they find the integrity to ask for help and…
Thankfully we are now engaged with the enlightened few 🙂
There is a strong link between a start-up and a turnaround: in the ability to realise your business potential by:
- cutting such business disorder and entropy
- and identifying when your capabilities will expire.
How can you create value in this increasing tech environment if you are like them: blindsided by what is destroying it and blindsided by what is driving you?…
Have you noticed that this type of environment also screws up your ability to plan ahead and worse normalise some very obvious macro-level threats?
Last week I engaged with a big 4 turnaround panel they don’t get this either…! Interesting times.
Issues left unaddressed create the seedbed unpredictable results?
Got it covered? 🙂
How will you respond?
Have great day friends.
Until then, Only the best,
Tom
