How to Cut Your Losses
By Fawn Fitter | 7 min read
How do you salvage a project – or an organization – that’s circling the drain? Lisa Gable has done it often enough, at sufficient scale, that she’s developed a four-step rescue process: focus on the desired endpoint, figure out what is and isn’t working, create a road map of necessary decisions and actions, and build effective partnerships to forge ahead rapidly.
Under her leadership as the U.S. ambassador to Aichi World Expo 2005, U.S. participation in the global business showcase came in under budget for the first time in 150 years. More recently, as leader of the Healthy Weight Commitment Foundation (HWCF), she helped 16 major food and beverage manufacturers collaborate with public health experts on a five-year plan to reduce the total number of calories sold in the U.S. marketplace – a plan that addressed public criticism for the companies’ role in rising obesity rates and reduced demands for greater regulation of the commercial food industry.
In Turnaround: How to Change Course When Things Are Going South, Gable shows leaders how to identify why a project is struggling and guides them to create and implement a new vision of success.
We asked Gable what makes projects fall apart, how to bring stakeholders along when leaders have decided to cut their losses and adopt a turnaround strategy, and how to recognize when a project or organization is too far gone to save.
Q: You cite multiple familiar reasons why projects get off track, from scope creep to some leaders’ belief that any problem can be solved by throwing enough money at it. Is there anything they all have in common?
Gable: Three things, actually. One is that we get distracted by shiny new objects instead of finishing what we started. Another is that we tend to forget why a project exists and just keep it going because it’s there. But I think the biggest issue is hubris. At the World Expo, for example, previous leadership teams went well over budget making sure the U.S. pavilion was more innovative, technologically advanced, and engaging than anyone else’s – even though focusing on being fun and impressive didn’t automatically align with the goals of creating long-term business relationships or staying in budget.
Q: What’s the difference between a project that’s been slipping gradually and one that collapses suddenly?
Gable: The reality is that a project in sudden collapse is just one that’s been slipping gradually without anyone stopping it. Many companies don’t have the processes to help them see when that’s happening.
In an era of improvisation and agile development, process engineering has fallen out of favor. I started my career at Intel, where process was everything. We constantly ranked and rated what we were doing, at a level that other companies didn’t, and I came to see that as the key to keeping what was working and letting go of what wasn’t. To this day, I do much better when I’m forced to prioritize. When you ask questions like “What are the most important things you can do right now?” or “What will you do if you only have X in your budget?” at least once a quarter, you can identify your priorities and see when you’re drifting away from them.
Q: How do you know you have enough support for a turnaround plan?
Gable: You need to not only gain buy-in from key stakeholders in the decision-making process, but also to engage in shuttle diplomacy with those who may oppose you, because it’s hard to move forward when you’re constantly engaged in battle. If some people refuse to buy in, you have to pivot to grow your base of supporters so your opponents are less relevant. In my experience, if I can get people to agree with me 60% of the time, we can mutually agree to set aside the remaining 40% to find a path forward toward a shared goal.
For example, when the HWCF first launched, a lot of public health influencers suggested we encourage people to just stop eating many of our members’ products. Obviously, we weren’t going to create a plan centered on lower sales and revenues! But we were able to agree on wanting better health outcomes, which let us build a partnership with one of the most respected private sector public health organizations and eventually align around a common goal of reducing the total number of calories sold (partly by reducing the calories in existing products and partly by introducing new healthier, lower-calorie options).
Q: How can leaders win over skeptics and critics of their turnaround strategy?
Gable: Encouraging key stakeholders to talk about their pain points is important to gaining their support. Walk through their concerns and find out what actions they think would address them. Then be clear, quantitative, and specific about what actions you need to take and your options for taking them. See if that helps them let go of their objections.
For example, I worked with an organization that held a beloved fundraiser that brought in US$1 million a year — but cost $2 million to host. My ability to prove that it was no longer cost-effective allowed the stakeholders to understand why they needed to end it, even though they were unhappy about it.
I also use decision trees to eliminate “maybes” and force a yes or no decision. A decision tree with key benchmarks, quantitative measures, and trigger points helps you show whether specific actions are getting you to your goal. If you can say “if X doesn’t happen in six months, we will do Y,” people will feel more confident about supporting the plan, because they can monitor how well the organization is achieving those benchmarks and know what will happen if it doesn’t.
Not incidentally, leaders need to understand and acknowledge the impact their actions and decisions will have on loyal partners and employees. If someone’s work will be rendered irrelevant by your turnaround plan, make it clear that you’ll help them move on to a new opportunity after the restructuring.
And remember, there will always be holdouts. You’ll never be able to satisfy everyone.
Q: Is a project, team, or organization ever too far gone to rescue – and is it still worth it to try nonetheless?
Gable: Sometimes people try to expand a small project into a permanent department or keep an initiative going after its moment has passed.
I was once recruited by a nonprofit organization that had been around for 20 years and was operating in the red. After I looked at their work, financials, and competition, I told them, “I can’t take this job, because I don’t think this organization actually needs to exist anymore.” Two of their board members agreed. They had been consistently saying that the organization had already accomplished the goals it had been founded to achieve, but the rest of the board needed to hear it from an outsider before they could recognize it was time to shut down.
But that doesn’t mean there isn’t a part worth saving. You need to think about every project, business, or organization as a compilation of assets: products, services, programs, tools, processes, resources, and so on. Say you started an organization to help a group of people solve a specific problem, and you’ve made progress but can no longer deliver those benefits to those end users in the current configuration. If there are assets you can save for the future, that’s not a failure! That’s when you do a victory lap, and then pass on the remaining assets to someone else who can get some value out of them.
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