Companies have always gone through difficult periods. But due to the critical conditions of Covid-19, 2020 and 2021 have been particularly challenging years for companies in various industries and across the globe. More than ever companies need to make vital changes in their business strategy and operations to survive. This makes the question of how to revive a suffering business a very timely and relevant one.
I spoke to serial executive Isabelle Parize, chair and former CEO of DELSEY Paris and non-executive board member of Pandora, Coty and Air France-KLM. Throughout her four decade-spanning career she has led numerous business transformations and successfully revived many large multinational corporations. In our interview she shared five key lessons defining her approach for reviving businesses that go through challenging times.
Lesson 1: Renew The Leadership Team
When asked about the first thing to do in any business transformation, Parize’s answer is as straightforward as it is painful: “replace two-third of the leadership team.” The main reason? “It is the current leadership team that has been responsible for the company’s situation and the only way forward is making a significant change.”
To achieve this, there turns out to be a clear recipe that has worked time and again:
- Keep one-third of the leadership team to maintain the company’s culture.
- Promote one-third from within to give high-potentials the opportunity to lead.
- Hire one-third from outside to break with the past.
Next to being the first change to make when reviving a business, it also has to be made fast so that the new and vitalized leadership team is in place to lead the rest of the transformation of the business.
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Lesson 2: Enforce A Simple Top-Down Vision
The second ingredient for a successful transformation of a business that should immediately follow, according to Parize, is formulating a simple and clear vision and communicating that vision throughout the company.
Bottom-up communication is important for receiving information, but formulating the vision “is a top-down discourse” in which there is “no place for long and broad discussions about what the vision should be.” Once more, Parize offers a clear recipe for how to do this:
- Gather information bottom-up.
- Decide and formulate a simple vision at the top.
- Communicate the vision at length throughout the company.
The last point is crucial. “You need to communicate, communicate, communicate, share it, help your people understand where you want to go, why that is necessary and how to do it.” To facilitate both the top-down and the bottom-up communication, middle management is key. According to Parize, they are the main channel for both directions of communication.
Lesson 3: Rebuild The Brand Inside-Out
“A successful company’s core asset,” Parize argues, “is its brand. And to revive the business, you often need to rebuild the brand.” This indicates that one of the important reasons a company is in trouble, is that it lacks a distinctive and compelling proposition to its customers that stands out from the competition.
In rebuilding the brand, there is one key element. “You need to build the brand on the company’s DNA. You can never stretch a brand beyond the company’s roots. If you try to do so, this is a recipe for catastrophe.” So, the lesson is clear here: look inside, discover the company’s true DNA, its distinctive character and build the brand on that.
At DELSEY, this DNA is being the customer’s sophisticated travel companion, Parize explains. “This means that sophistication and traveling should be at the core of the company’s brand, no matter what.” Examples of how this returns in the design of their products are a backpack in which a laptop is protected from the rain and a bag with a removable and washable lining to keep the inside of the bag fresh for the next trip. Along the same lines, Parize has rebuilt the brands of other companies, based on their unique DNA.
Lesson 4: Execute Consistently And Fast
Words are important and communication is key, as Lesson 2 teaches us. But, Parize underlines the importance of action too. “You have to prove you do what you say you do, and do it decisively and fast.”
The focus on action is obviously there to make sure that whatever is planned is actually executed. But it also has a strong symbolic value. “People need to see that you are serious about what you say and that real change is coming.” By acting fast and decisively exactly along the lines of your vision and brand, you create movement—and continuous movement is needed. “It is like riding a bike. You can’t stand still, because if you don’t move, you fall. The same applies to business.”
As Parize emphasizes, speed of execution is key. “Today’s world, especially in business-to-consumer markets, has become so fast that you need to execute your strategy almost instantly. And with further digitalization, speed only increases.”
Lesson 5: Commit To A Cause
The first four lessons reflect Parize’s approach to business transformation over the past four decades. As she says, “Not much has fundamentally changed in the way I do my job over the past 40 years.” One thing has changed, though, and that is the importance of contributing as a company to a greater cause.
“People say that young people are not as motivated as older generations and not as productive. But I don’t believe this is true. The main difference is in what motivates them. They want to do something good, especially for the environment.” Whereas the motivators of the past—money, career, power and so on—may still be valid, to really get the new generation motivated, a company needs to commit to a clear cause so that whatever is done, contributes to that cause and thereby not merely to the success of the company, but to the world at large.