I recently had a nostalgic look through some old records and came across a song from the early 90s with a title that resonated with me. The song was "It Ain’t Over Till It’s Over” by Lenny Kravitz. While Lenny was singing about not giving up on a romantic relationship, his relentless repetition of the main chorus line drives home a message that I carry with me in everyday business: it ain't over till it's over. No matter how bad the situation may be, in most cases, the game is not up and there is a way to turn it to your advantage.
When you look at a successful business, it can be quite difficult to envision the company as a struggling start-up seeking to find its feet. But the reality is most companies started this way. What separated those that "turned the corner" and survived and those that disappeared often comes down to the attitude and resilience of the founders. Making one more sales call, trialling one more marketing strategy, retaining one more customer - it is often these incremental steps that help these businesses survive. Rescuing your business (and every business goes through "rescue mode" at some point in its evolution) from the brink of failure requires vision and persistence with rapidly executed baby steps. An “it ain’t over till it’s over” attitude is essential to make it through to the other side.
This week, I focus my attention on businesses that edged close to the brink of failure but with strong leadership and vision, turned the corner. Small and large, early stage and late - every business faces a challenge to its existence at some point. Here are two turnaround stories that we can all learn from:
In 2004, after a half-century of being at the top of every child’s Christmas wish-list, Lego was hit with the biggest loss of their history (£217 million). All financial experts were sure that the company’s run was drawing to a close. Children were veering towards PlayStations and Gameboys as the world embraced a digital revolution. Analysts branded Lego another victim of the digital age, soon to be a relic.
Then Jørgen Vig Knudstorp entered the business as CEO. The pressure was on for him to summon an immediate turn in fortune. The new CEO recognised the underlying issue within weeks. The issue was not complacency, nor a lack of worth ethic.
The company had made a healthy annual profit for a 50 year period, but recently figures had been in rapid decline. So what had changed? The issue was innovation. Sometimes too much of it can be a bad thing.
The company had been concentrating on keeping up with the times, spending a lot of their effort and money on innovating their products to adapt to the new digital age. At the turn of the millennia, Lego vastly expanded its production of memorabilia, television programming, comic books, video games and clothing. Vig Knudstorp decided that Lego needed to go back to its roots. He sold every part of the company that didn’t involve the core product and halved the number of components produced (from 7,000 to 3,000).
In 2008, led by Vig Knudstorp's vision and decisive management, the company’s fortune had completely turned around, making a net profit of £163 million. In 2009, they were the world’s fastest growing toy company.
Lesson: Lego forgot what their product was all about. They had become so wrapped up in the idea of keeping relevant that they lost their core values. It took a leader with vision execution capability to turn the corner. Once the company returned to its roots, the public were reminded of what they loved about Lego. Once the customers came back, so did the profits.
Colonel Sanders (KFC)
At 65 years old, Colonel Sanders had spent his working life changing from job to job, with little success in any field. In his first week of retirement, Sanders received a social security cheque of $100. This worried him greatly and he soon began to contemplate on how he was going to survive retirement with such a small amount of money. Worried for his financial security, he embarked on one final entrepreneurial adventure. He travelled from his home state of Kentucky in an attempt to sell his fried chicken recipe to restaurateurs in exchange for a cut of the profits. He travelled to 1,008 restaurants, each which declined his proposition.
On his 1,009th pitch at his 1,009th restaurant, he finally found someone who saw the potential of the idea. Pete Harman of South Salt Lake in Utah partnered with him and the two entrepreneurs founded the world’s first KFC restaurant in 1952.
By 1960, and with Sanders in his mid-70s, KFC had grown into a multi-million dollar business which continues to prosper today. Although he sold the franchise in the 1970’s, Colonel Sanders’ face can now be seen in every KFC restaurant in the world, ensuring he goes down as a historical testament to the fact that “it ain’t over till it’s over”.
Lesson: Persistence is a vital ingredient to success. Most people would have given up after having their idea rejected a few hundred times. Sticking with an idea and your judgements takes huge strength of character. Every business starts with an idea - trust your own judgement, and don’t despair when others don’t share your vision. Keep going until you think the game is over, and then, keep going just a bit further. Because it may not be over just yet.
These historical examples resonate with me personally. Recently, a venture I was investing in nearly fell apart after a key member of the team pulled out at the last minute. One of my closest advisors (along with many others) suggested to me that the deal was off but I refused to quit. Instead of admitting defeat, I decided to go on a search for a replacement player with similar expertise. Eventually, I found three super star individuals and built a "dream team" around the existing management. I could have quit, but I didn't. I refused to accept that the game was over, and I backed my own judgement. Just as the deal seemed like it may be in jeopardy, I used the set-back in my favour and put together an even better team. I know I'll be reminding myself of this example if I face a similar predicament again (which I'm sure I will).
Many of my readers are working on launching new initiatives, products, and ventures, and I suspect many of you haven't turned the corner just yet. Remember, every one of your early failures and challenges will take you closer to where you want to be. When you're deep in the trenches of running your business, I understand that's not as obvious. But imagine if you could elevate yourself above the trenches and take an aerial view of your journey: you would see a zig zag diagram of where you started and where you are now with a green dot on the start line and red dot on the finish line. Deep in the trenches it may feel like the going is tough, but the aerial view would show that you're progressively moving closer to the red dot. The key is to keep on moving, pivoting, trialling, and going. Kravitz's romantic lyric, "it ain't over till it’s over”, while deeply emotional and written in a completely different context, does a rather fine job of capturing my ethos in business.
There’s something special about the number 100. In sports, the American football field is 100 yards long. In science, 100 degrees Celsius is the boiling temperature of water at sea level. In finance, most currencies are divided into 100 subunits. So, when a high growth start-up I invested in five years ago increases in value by 100 times, for me, it is a special moment…and worth pausing to write about.
The French writer and playwright John Cocteau once said, ‘The poet is a liar who always speaks the truth.’ As we enter the shortest and most romantic month of the year, the inner poet in me has been roused. I am curious – can the lies in poetry reveal any truths on business?
Read more at https://www.managementtoday.co.uk/entrepreneurs-unlock-inner-poet/entrepreneurs/article/1456262#PfEcBLUP35g4bs5y.99
I walk. I walk a lot. Everyone seems to have their own style when walking. Mine is mostly a brisk kind of walk with an intense sense of purpose. But style doesn’t matter when it comes to walking – there is an incredible amount of substance in our footsteps.
The virtues of walking are extolled in writings that trace back to Classical Greece. The great physician Hippocrates, presumably an avid walker himself, left us with some profound wisdom on the subject. ‘Walking is a man’s best medicine,’ he said. I suppose the Father of Medicine had not only discovered the curative qualities of walking… but he also had an inkling of the creative power hidden in our steps.
The magic in mentoring happens behind closed doors. The mentor and mentee relationship is a deeply ‘private’ one, where in a discreet one-to-one session, master shares pearls of wisdom with his or her pupil. Personal stories are shared, picked apart, and put back together again. This ritual allows the pupil to extract the fleeting ‘secrets of success’ that are so hard to capture on one’s own. While the actual process of mentoring is shrouded in privacy, the energy created from these special relationships has tangible ‘public’ benefit.
My father often talks about an imaginary film reel. It is the private film of his day, only to be watched at bedtime, for his eyes only. He describes a projector that casts a cinema size screening of his entire day on the wall, showcasing his every action from the moment his eyes open, till his final yawn.
With consumer-based artificial intelligence (AI) applications, like Apple’s Siri and Amazon’s Alexa, robots are starting to feature in our everyday lives. From seemingly simple tasks like checking the weather, to ordering our groceries, AI has rapidly developed in sophistication in the past 36 months.
Dennis Waitley, the American best-selling author, once said 'failure should be our teacher, not our undertaker. Failure is delay, not defeat. It is a temporary detour, not a dead end…' Failure is often misunderstood, a dirty word, only to be whispered in hushed tones. Some of those closest to me have yet to achieve their full potential because of their subconscious fear of the ‘F’ word. In certain cultures, failing is taboo and carries individual and familial shame, like a metaphorical scarlet letter burning on one’s forehead.