Diagnosing the Business Situation

The four broad types of business situations that new leaders must contend with are start-up, turnaround , realignment , and sustaining success. (From now on we will refer to this framework of transition types as the ST _A RS model.) An outline of the characteristics of each of these types, and their associated challenges and opportunities, will help you to recognize the key structural features of your own situation.

What are the defining features of each of the four ST _A RS situations? In a start-up you are charged with assembling the capabilities (people, funding, and technology) to get a new business, product, or project off the ground. In a turnaround you take on a unit or group that is recognized to be in trouble and work to get it back on track. Both start-ups and turnarounds involve much resource- intensive construction work ” there isn t much existing infrastructure and capacity for you to build on. To a significant degree, you get to start fresh. But both require that you start making tough calls early.

Realignments and sustaining-success situations, by contrast, are situations in which you enter organizations that have significant strengths, but also serious constraints on what you can and cannot do. In realignment, your challenge is to revitalize a unit, product, process, or project that is drifting into trouble. In a sustaining-success situation, you are shouldering responsibility for preserving the vitality of a successful organization and taking it to the next level. Put another way, in realignments you have to reinvent the business; in sustaining success situations, you have to invent the challenge. In both situations, you typically have some time before you need to make major calls, which is good news because you have to learn a lot about the culture and politics and begin building supportive coalitions.

Applying these categories to business situations is useful regardless of your level in the organization. You may be a new CEO taking over an entire company that is in start-up mode. Or you could be a first-line supervisor managing a new production line, a brand manager launching a new product, an R&D team leader responsible for a new product-development project, or an information technology manager responsible for implementing a new enterprise software system. All of these situations share the characteristics of a start-up. Turnovers, realignments, and sustaining-success situations also arise at all levels, in companies large and small.