What Key Business Decisions Completely Turned Around Failing Companies?

When building a company, failure is much more common than success. Therefore, it's essential to design the company in a way that it can fail without breaking down completely. My current company went through three major pivots out of necessity, not desire. Here are the key decisions that led to its turnaround.

Initial Pivots and Challenges

Our journey began as a service company. The first pivot occurred at the end of 2014. We shifted from a service company to a product company with a specific product that we had built before. We set up a sales force to sell this product, but we kept most of the service business. This pivot was not driven by desire but by necessity, as the business model for the original service company failed.

Second Pivot: Product Abandonment and Rebuilding

The first business model failed, necessitating another pivot. We discontinued the previous product and started another one in Summer 2016. To do this, we had to almost entirely replace the sales crew. We experienced a strong initial response, achieving two major sales in a short period. However, sales slumped significantly in the following year, indicating a need for further adjustments.

Third Pivot: Customer-Centric Strategy

Autumn 2017 marked our third pivot, where we changed the product offerings to better align with customer preferences. This pivot worked exceedingly well, and we gained significant customer traction since then. We no longer sell any of the initial service products, marking a complete turnaround.

In each of these cases, the key business decision was to abandon a product that either we did not want to sell or the customers did not want to buy. In all cases, we had to rebuild the product offerings, marketing, and sales processes almost from scratch.

The Importance of Customer Focus

Turning around a failing company is incredibly challenging. It's like trying to get a soufflé to rise twice. However, one critical factor that I have found to make a company successful is to focus on the customer. The customer should be the top priority. While there are many other factors to consider, the customer is central to any successful business strategy.

By prioritizing the customer, businesses can anticipate their needs, improve their offerings, and build strong relationships. This focus helps in adapting to market changes and creating a loyal customer base, which is crucial for a company's long-term success.

Conclusion

In the face of failure, companies need to be adaptable and willing to pivot. By making key business decisions that prioritize customer needs, companies can successfully turn around even the most challenging situations. Our journey has shown that while failure is inevitable, the right decisions and a customer-centric approach can lead to a successful turnaround.