A smooth and rapid climb from start-up to industry rock star, or a transformation from stalling aircraft to Mach 3+ record-setter, is the dream of every company, at both launch and cruise altitude.
Unfortunately, that is simply not reality in the business world. In fact, the opposite is true — Half of all businesses fail within five years, and that is if they aren’t among the two-thirds that implode by year two.
But that doesn’t mean every company has a preordained destiny. Not at all. There’s always an opportunity to alter course and address challenges — before things get bad enough to prompt an emergency landing — if you recognize that the “Master Caution” light has come on; you act quickly; and you follow a checklist that allows you to: avoid distractions, prioritize your efforts, and get things done!
As someone who has had the good fortune to be tapped to help start, fix, and lead new and ailing companies, and someone who was personally selected by Larry Ellison to fix his own private company, I have seen and improved a multitude of different sized businesses – businesses from $40 million to over $12 billion in revenue, and all of them rife with different challenges. While my work has principally been in the notoriously complex and difficult world of aviation and airlines, lessons learned and applied there are relevant to every company in every industry – and that is why I’ve become known around the globe as a “turnaround guy” and “company fixer.” While it was not a career path I sought out, it’s a reputation I’m proud of, because the results that my teams and I have put on the scoreboard — through our work transforming brands and businesses — are better than those of most professional sports teams. That said, none of those accomplishments would have been possible if we didn’t have a proven flight plan that we consistently used with precision and purpose. So, if you are looking for some quick advice on how to start or fix a business, you want to know some key things to do and not do, and you don’t have the money to pay for a high-priced consultant who might not have much “real world” experience, here is what I would recommend to you.
People Before All Else
When the time comes to create your start-up company or fix one that is broken, what matters most of all is that you have a team of “A” players who can help you get it done. There is no such thing as an “Army of One” in the business world. If you are on your own or leading without followers, you are doomed to fail – even the best idea, the best product, or the best strategy will not succeed if you try to do everything yourself. And your “start-up” or “turnaround team” must be assembled as soon as possible and long before talks of launching Newco or achieving renewed profitability even begin.
I look for talented team members that bring complementary skills to the table that I don’t necessarily possess myself. I seek out industry veterans who have energy, drive, and proven leadership skills – because it is people, not grand strategies, that make things happen and understand customers. Also of note is the need to bring in people who share the principles of the company and its mission and won’t budge on high ethical and moral standards.
Attitude and fit are also important, so you might consider junior team members for more senior roles because you can always educate and train – it is difficult to create inner drive and interpersonal skills. But if something is truly broken, it must be fixed from the top-down, a good case for outside hires. I choose people who will bring wisdom, a wealth of experience, and a fresh perspective — along with the ability to inspire change while also understanding the culture and the business.
Nailing the Basics
Once you have a dream team assembled, there are essentials that need attention right away.
For companies in the aviation world, we have four pillars that help us prioritize our critical basics in this order: Safety, operational excellence, customer service, and employee satisfaction/pride.
Safer employees are happier and more productive. Safer operations and products are more desirable than those that are not – think Volvo. And ultimately, customers want and need to feel safe about your business to keep coming back. Safety is an obvious priority for aviation, but it is critical everywhere.
“Safety first” is more than an old adage in my industry, but I believe this priority has to be clear and proactive in every lines of work, from factories to restaurants to tech startups. If a business is not putting safety first, or only paying lip service to an idea, it can run into some serious issues.
After assembling my stellar teams at Fiji Airways and later Ravn Alaska, my first mandate was to make safety our #1 priority. Expectations for airlines are high, understandably, and being content with the minimum requirements in any business is a surefire way to dip below them. That’s why we chose to put both carriers through the International Transportation Association (IATA) Operational Safety Audit (IOSA). As the only regional airline in Alaska to voluntarily submit to this audit, and one of only a very few in the U.S., we reset the bar high for our safety and operations processes and standards, so we could ensure better safety, reliability, and efficiency across the board – something we knew that our employees and our customers would notice and embrace.
Operational excellence is simple to understand, but harder to achieve. Wikipedia defines it as the execution of business strategy more consistently and reliably than the competition, which I definitely think speaks well to this priority. Actually becoming more consistent and reliable than the competition, however, takes a lot of work and in most cases, time to really prove.
The first step toward operational excellence is to figure out what works and what doesn’t, and why. Every policy and procedure in an organization needs to be thoroughly audited to identify fatal flaws and opportunities (a SWOT analysis can point you in the right direction). Next you’ll need to thoroughly research your competition to get as accurate as you can of an idea of what does and doesn’t work for them. From there, you can create a roadmap, set goals, measure performance, and ultimately lift your operations to heights that are hard to surpass.
Customer service should be the easiest thing to achieve excellence in, but you would be surprised — or maybe you wouldn’t — at how many airlines fall short and appear mediocre. Poor customer service costs businesses roughly $62 billion a year, so the issue is as expensive as it is pervasive.
It’s easy to blame bad customer service on the frontline employees that fail to live up to expectations. But logically, it’s the company’s fault if its people have bad attitudes. Maybe they aren’t satisfied with some element of the job, or maybe they haven’t been trained properly. Whatever the case, you must get to the root of the issue before revamping customer service. If it’s a matter of training, provide the resources to help. Make clear what good customer service looks like and set standards that define what language and behaviors are appropriate for different situations.
Employee Satisfaction & Pride
Employees who take pride in their company are more likely to stick around and provide the stellar customer service needed to successfully fix an ailing company. Far too many people are view work as a necessary evil that pays the bills and nothing more, but it doesn’t have to be that way. Making sure your employees don’t just like their job, but cherish and take pride in it, can go a very long way.
Unfortunately, pride is not something that any training session can generate. You can’t hand it out like SWAG gear or include it in your benefit package. Instead, everything you do contributes to it. The best way to nurture pride in your employees is to treat them as the base of your pyramid – if you treat them well and earn their respect, they will do the same to your customers, who will in turn, take care of your shareholders. So treat your team as you would like to be treated and create a company they can be proud of. That first part can be accomplished by listening and responding to employee needs, providing support and growth opportunities and showing appreciation for a job well done. The second part—creating company pride can be accomplished by making sure you company is a good corporate citizen that does the right thing—socially, environmentally, and community-wise.
Moving the Needle – Over the Long Term
People come first, the basics come second, but next comes your hardest and arguably most important mission. I’m talking about those goals that can’t be accomplished simply or quickly, but will greatly contribute to the reputation of your company and where you stand in the industry and world.
Not everyone is in the position to take on these goals, which is why people and the basics come first. But once the previous areas are stable and thriving, I would argue that you have a corporate responsibility to do more. Go above and beyond for your employees, your customers, your community, and even the planet.
What does this look like in action? Implement policies, initiatives, and partnerships that are consistent and supportive of your company’s values and priorities. Introduce KPI based rewards and profit-sharing to give back to your employees. Incentivise physical activity and healthy eating habits to improve their wellness. Take steps to reduce stress. Encourage a culture of caring by fundraising for disease research or advocating for causes that your staff cares about.