The key to successfully mastering a business turnaround is to maintain control, as demonstrated by the struggles at Under Armour and Hertz, and the success at Apple under Steve Jobs. Kevin Plank, the founder of Under Armour, had to take back the reins as CEO after sales and profits had fallen under the leadership of Stephanie Linnartz. Similarly, Hertz, under the control of Knighthead Capital Management and Certares Management, replaced its CEO Stephen Scherr after a failed attempt to turn the company around following a risky bet on electric vehicles. The lesson learned from these situations is that maintaining control is crucial when attempting a turnaround.
One of the greatest examples of a successful corporate turnaround is Steve Jobs at Apple. Jobs staged a boardroom coup to take control of the company when it was on the brink of bankruptcy in 1997. He then raised capital from Bill Gates and introduced groundbreaking products like the iMac, iPod, iPhone, and iPad. Jobs’ ability to take control of the situation and steer the company in the right direction was instrumental in Apple’s resurgence and success.
For entrepreneurs and business leaders, the important lesson to take away from the experiences at Under Armour, Hertz, and Apple is the significance of control. Maintaining control of the business is crucial for long-term success and to weather any challenges that may arise during a turnaround. Among billion-dollar entrepreneurs, only 6% succeeded after losing control, while 94% stayed in control. This underscores the importance of avoiding or delaying venture capital funding that may lead to loss of control.
To successfully navigate a business turnaround, it is essential for entrepreneurs to learn from the strategies and approaches taken by successful leaders like Steve Jobs. By focusing on maintaining control, delaying venture capital, and acquiring unicorn skills from other successful entrepreneurs, business leaders can increase their chances of success. The ability to take off with smart capital and dominate with capital that is under their control can make a significant difference in the outcome of a turnaround. By implementing these lessons, entrepreneurs can increase their chances of success and avoid the pitfalls that have befallen companies like Under Armour and Hertz.
