This article was published on Inc.com by Entrepreneurs' Organisation.
Kevin Chin, an Entrepreneurs' Organization (EO) member in London, UK and Brisbane, Australia, is the author of HyperTurnaround! and Founder and CEO of Arowana, a certified B Corporation which invests in, operates, and grows small to medium-sized enterprises. We asked Kevin how he accomplished an extreme turnaround in a tech business on the verge of collapse. Here's what he shared.
You masterminded a remarkable business turnaround, saving a tech company that had just six weeks of cash to survive, growing it exponentially in four years and ultimately selling it to Oracle. What made you decide you could successfully achieve this specific turnaround?
I felt confident that we could do so successfully because of the extent that we could drill down in due diligence, quantify quite precisely the cost savings, and map out a very detailed turnaround execution plan. In short, we were able to eliminate a lot of "unknown unknowns" and "known unknowns" before embarking on the venture. Ultimately, our game plan worked well and we exceeded the targeted cost savings plan in a shorter amount of time than budgeted, too.
However, I have since led other turnarounds that were much more difficult, including an education business that was effectively condemned by two earthquakes that destroyed its campus just months after we purchased it―yet we managed to save it and then grow it rapidly before taking it to an IPO. In that situation, it was like guerrilla warfare with a high degree of what the military calls VUCA (volatility, uncertainty, complexity, and ambiguity).
In such circumstances, it's primarily about mindset―in essence, refusing to fail. Often, in moments when you face what seems like an impossibly complex problem, peak creativity manifests. However, the prerequisite to that is the never-say-die mindset.
What top three actions did you implement to achieve the turnaround?
What is the most critical strategy to bring to turnarounds?
A mindset of flawless execution combined with meticulous planning and a strong sense of urgency. In addition, the resilience and relentlessness that are the hallmark of many fellow entrepreneurs!
What role does company culture play?
I learned firsthand during this turnaround that culture does indeed eat strategy for breakfast. With my investment banking background, I once had the mindset that business is all about the numbers and anything that cannot be quantified on a spreadsheet is a waste of time. That could not be further from reality, as numbers are the output of a strategy that is well-executed. If culture is not defined clearly by core values and cultural norms that are consistently reinforced, then it becomes very challenging to recruit and manage the right team to execute on strategy.
How did this first big turnaround affect your entrepreneurial journey?
This turnaround journey had the absolute full spectrum of entrepreneurial experiences: raising capital, taking over and privatising a listed company, executing on a mission-critical turnaround plan to save the company, acquiring bolt-on acquisitions, exponential unicorn-like global growth, fixing self-inflicted growing pain challenges, leadership musical chairs, and finally, an exit via tech-giant takeover―during the great recession. All in the space of 1,460 days (four years)!
As the saying goes, in college, you are given lessons and then tested. But in life, you are given tests and then taught lessons from them. This was certainly the case, as I learned many lessons from the experience. While there were many tough times and moments of uncertainty, I look back and am grateful for how it all unfolded. If it had been too easy, I wouldn't have learned as much I did. It gave me a very comprehensive, hands-on education in all facets of business―from sales to leadership to culture. As a result, I have become a better operator and a better investor.
Since then, our holding group has invested in and operated turnaround and scaleup missions in other businesses, across sectors such as education, asset management, solar energy, and power services. I love the entrepreneurial challenge of fixing and then growing small and medium-sized enterprises (SMEs) when the odds are seemingly stacked against you. The satisfaction comes from seeing something that was floundering, end up flourishing.