When Does Turnaround Management Succeed?
The ups and downs an organization faces through its lifecycle—in addition to other challenges such as changing user requirements, competition in the marketplace, and project resource constraints—make the IT industry very dynamic. The last decade has seen many companies rise and fall, recover through an acquisition, or recover through focused turnaround management efforts. Turnaround management has a very typical lifecycle of its own, and it is not a strict theory than can be adopted to succeed.
Turnaround management is an important area of curriculum focus in management schools. It requires a unique and bold leadership style that can instill confidence in varied entities who are at the brink of losing hope in the organization. In fast-paced organizational operations, even regular ongoing executive management has its own challenges, so one can only imagine the efforts associated with turnaround management.
We all know the story of Yahoo! and the turnaround management that Marissa Mayer has been driving ever since she took over as CEO in July 2012. Another instance is Don Mattrick who quit his management role at Microsoft to take over and turn around the suffering organization Zynga.
In all of these cases, the executive assumes a highly visible, high-impact role and has to now work with multiple entities—employees, end users, shareholders, and partners—to bring back conviction about the mission of the organization so that they can succeed together as a team. In Yahoo!’s case, it is very heartening to see the impact Mayer has had in just one year with the stock price reaching never before seen heights.
However, not every turnaround management story is a success. Turnaround management is particularly difficult, and every executive has his own style on where to start. Some start internally with the core teams, some start directly with the external product strategy and customers, and most start with a close look at overall spending and costs.
There is no real right or wrong answer here. It depends on the leader’s style and the gravity of turnaround management needed, but typically during the first year the industry and all associated entities of the organization are closely watching to see how the company recovers. This month marks the one-year anniversary for Mayer at Yahoo!, and several detailed reports are being circulated about what she has accomplished during her tenure.
In Zynga’s case, not too long ago we heard about internal restructuring at Zynga, which cut its workforce by 18 percent. With the hiring of Don Mattrick—who has both the executive background and the domain expertise of running one of Mirosoft’s flagship products, X-box—it will be very interesting to see the turnaround he proposes and implements at Zynga in the next several months. Good luck Zynga!
