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.
In high school, I was a sprinter. Metaphorically that is. I took on way too much. I wanted to make it big, and do it fast. My ambition and enthusiasm for education, sports and extracurricular activities exceeded my output levels, mainly because I was spread too thin. ‘The fruit of patience is very sweet,’ my father repeated reassuringly over breakfast as I gulped down my hot chocolate, but the Urdu proverb didn’t resonate at all with a young man eager to take on the world.
Winston Churchill once wisely said 'it's a riddle, wrapped in a mystery, inside an enigma.' He was addressing the nation in a BBC broadcast, speculating on how Russia may or may not respond in the wake of one of the most uncertain times in recent history - World War II. Leaders are often judged by how they manage uncertainty: when the stakes are high, yet our control of the possible outcomes is limited. At times like this, working out probabilities and other forms of statistical analysis are of little use. Great leaders that have triumphed over the beast of uncertainty are often those that have relied on calculated intuition and instinct.
Legend has it that way back in third century Rome, Emperor Claudius II wished for a radical transformation of his army. While his soldiers were loyal and dedicated, he believed that they could give more. He wanted the success of the military to be each soldier's only meaningful purpose in life. Such men were hard to find; although many were passionate and had risked their lives for the Empire, the soldiers had their loved ones and family life outside of the army. The Emperor saw this as a weakness and a distraction, so he took the bold and ruthless step - and forbade marriage altogether.
Nearly everyone has boogied to the 70s disco tune "Kung Fu Fighting". The song topped the US Billboard charts in 1974, selling 11 million singles, yet Carl Douglas, the recording artist who sang and composed it, remains virtually unknown, having never been able to repeat his earlier success. He’s hardly alone. The ‘second album syndrome’, also known as ‘the sophomore slump’, is a common affliction among musicians, athletes, movie directors and entrepreneurs. But why is it so challenging to come back for the second act? What separates the ‘serial winners’ from the ‘one hit wonders’?
I worry. I worry a heck of a lot. In fact, I start my day with a healthy dose of worrying. But I don’t let my worrying break me down. While it’s typically associated with weakness and has a negative connotation in the world of business, what most people haven’t pondered is how wonderfully effective worrying can actually be. If channelled correctly it can turn into the positive energy and laser focus needed to execute your business objectives.
Andy Grove, the iconic late CEO of Intel, was a famous worrier and eloquently divulged his worrisome mantra in his bestseller, Only the Paranoid Survive.
Grizzly bears are often imagined as fearsome beasts, better known for their brawn than their brain. A brief study of their hibernating habits, however, would suggest a smarter, more strategic creature. Grizzlies go underground into cozy dens and hibernate for up to seven months in a year. During hibernation, they become hyper-efficient; their respiration decreases from six to ten breaths every minute to just one breath every forty-five seconds. They do not eat, drink, urinate, or defecate during hibernation, living off a layer of fat built up during the summer and autumn months.
Everyone sees what you appear to be; few experience what you really are.’ - Machiavelli
If the above statement is to be believed and the Underwoods and Machiavellis of this world move among us, then, sinister as it may be, the entrepreneur must learn to navigate a world in which deceit runs rampant.
Machiavelli, the much-maligned political strategist from the 15th century, remains one of the most controversial and divisive figures in the world of business today. Many a naive entrepreneur disregards the importance of karma and reputation, and reads The Prince as if it were a self-help manual.
While filming ‘Walk the Line’, the biopic about American country music star Johnny Cash, Joaquin Phoenix bewildered audiences when he actually learned to play the guitar and sing in his character’s deep, calm, bass-baritone voice. When filming the emotionally wounded and dangerously psychotic villain Commodus in The Gladiator, Joaquin carried a sword around with him everywhere, whether on or off set.
Phoenix is an aficionado of ‘method acting’, a dramatic technique in which actors try to identify as closely as possible with the character played.