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3 Reasons Why Some Companies Successfully Manage a Turnaround ... and Why Many Don't Which strategies can help you save your business?

By Hamza Mudassir Edited by Frances Dodds

This story appears in the July 2021 issue of Entrepreneur. Subscribe »

Viktor Koen

At any point in time, one in three companies requires a turnaround. That's what research by Boston Consulting Group has found. And while you may not be able to predict whether you'll be one of those companies, you'll surely recognize the signs of distress: If your long-running business model collapses, your leaders lose focus of the company's mission, and your key talent starts to leave, then you'll be facing an existential crisis. It's turnaround time!

Given how common this is, you might assume that most experienced entrepreneurs and CEOs are adept at managing it. That is, unfortunately, not the case. The same research highlights that 75 percent of turnaround attempts fail to improve performance over the long term.

Part of the problem is a lack of foresight. By the time a company's leaders realize something has gone wrong, it is usually too late. That holds especially true for tech companies, which regularly deal with a winner-takes-all dynamic, where a competitor ends up dominating a whole industry versus just a part of it. But it can be true anywhere else, too. When you lose ground, it can be hard to regain it.

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