Organization Strategy & Transformation Practice
Organization Turnaround & Transformation
Clients who engage with us in Organization Turnaround & Transformation have a common set of issues and concerns:
- Stalled growth
- Unsupportable or out-of-line overhead costs
- Declining margins and profits
- Unprofitable, impending cash crisis
- Declining market share
- Shareholder returns unattractive; Investors rattling their sabers
- Competitors gaining advantages
- Key leaders and employees leaving
- Organization bureaucracy and dysfunctional processes
- Customer satisfaction slipping or low
In the face of these challenges, companies typically attempt common
turnaround approaches, including: reducing costs, installing new
organization structures, changing out senior management, rationalizing
product/customer/market (geography), continuing status quo and hoping
the market changes, or all of the above, but piecemeal at different times.
Given the 70% failure rate of typical change processes, many companies
struggle with a sustainable, impactful solution.
There is a continuum of client business improvement needs that range
from better ways to grow or improving existing business performance
that we address in the Strategy Integration and Business Design
section to the need to turnaround a
In our experience, companies who have successfully completed a turnaround process share common elements:
- They embraced the downturn as a critical turning point to make radical but needed changes.
- They understood that the turnaround process is holistic, involving the
entire organization, not simply a few of the executives or a specific piece
of the organization.
- They followed a disciplined and structured process that examined and
refreshed strategy and targeted capabilities and aligned the entire
organization in support of better performance.
- They boldly selected and bet on internal leaders and teams willing to
tackle the turnaround challenges and redesign process.
- They cut through the perplexing and paralyzing business dilemmas
(internal conflicts around business models and strategies) that had stalled
- They were willing to take dramatic actions to right the company –
major cost reductions, significant changes in strategy and capital
deployment, business realignments, new structures, new senior and midlevel
- Speed was a major driver. They accomplished the design and
proposal work within a few month’s timeframe.
When this commitment is there, we are able to guide companies to
help solve what feels like unsolveable problems, resulting in significant
improvements and successes. Key elements in this holistic, integrated
process include: implementing new structures and teams within first six
months, significantly reducing costs in the first year, with additional savings
in succeeding years and turning around revenue and profitability growth
within 1-2 years followed rapidly by increasing share price performance as
investors recognize that future prospects have changed.
Client Insights & Impact
A struggling travel and leisure company took advantage of a market downturn to refocus through a comprehensive review of their global business. They consolidated 6 brands, 3 global regions, and 3 competing investment models into a single integrated company and unified leadership team, took out $200m in costs, and realigned global and regional support functions. Over the subsequent two years, their stock price increased fourfold.
A global logistics company was 9 months from an impending liquidity crisis when new management embarked on a life-saving turnaround. Initial cost reductions of $90m in first year, followed by another $100m in second year provided needed investment to rethink and retool their customer strategy and operations network. Their mantra became “pick it up on time, don’t break it, and deliver it on time.” Over the next few years the stock price tripled and they won awards as industry best in class and best place to work four years running.
See more RBL Organization Strategy & Transformation client examples here.