Kevin Chin is an Entrepreneurs’ Organization (EO) member in London and the author of HyperTurnaround! He is founder of Arowana, a B Corporation which invests in, operates, and grows sustainable companies. Kevin’s team received the Turnaround Management Association’s global best turnaround award in the sub-$50 million revenue category for leading the hyper-turnaround of NASDAQ-listed VivoPower International. Martin Bell, who sits on Arowana’s advisory board, founded 100tasks.com to democratize entrepreneurship and is an expert in launching and hyper-scaling companies.
We asked Kevin and Martin about key learnings from turning around and scaling companies at pace in high-pressure environments to achieve 10x outcomes:
Most picture hyper-turnaround and hyper-scale as polar opposites, thinking that leaders need skills in driving only one of those to succeed. That could not be farther from reality.
Aspiring 10x entrepreneurs must excel at both—hyper-turnaround and hyper-scale because of the inevitable ups and downs faced in the quest to rapidly build a 10x company that’s made to last.
To illustrate, here’s a couple of legendary examples:
In 1996, the Apple founder returned as CEO only to find his company in tatters. “We need all the help we can get,” Jobs said, while the audience loudly booed after he announced that arch-rival Microsoft had invested $150 million in Apple. Jobs staged a remarkable hyper-turnaround by drastically re-focusing the company on innovative consumer products. That laid the groundwork to shift Apple into its prolific hyper-scale phase, launching a series of home-run products like the iPod and iPad—all of which transformed Apple into the world’s most valuable company.
In 2019, Tesla faced death “within single-digit weeks.” To thwart it, Musk nano-managed the organization and made hardcore changes: he removed the “barnacles” of expensive contractors, closed stores, laid-off staff, and solved the “production hell” of Model 3. This hyper-turnaround quickly bore fruit. Finances, production, and thus investor confidence bounced back, allowing Musk to shift into hyper-scale mode. He ramped up Model 3 production and sales, catapulting Tesla into the world’s most valuable automobile company.
These stories demonstrate that hyper-turnaround and hyper-scaling are really two sides of one coin. Both circumstances will manifest within the same company, often more than once in the journey of building it at pace into a sustainable enterprise.
In our experience, there are three key focus areas for executing hyper-turnarounds and hyper-scaleups:
1. People and Culture
In 2015, Martin managed the hyper-turnaround of a key market for Delivery Hero, the food delivery platform. Sales had stalled, employee morale was low, apps were outdated, and processes were cumbersome. The root cause was not having the right people and culture. At rocket speed, Martin flattened the organization, brought in domain experts with high adversity quotient (AQ), and fostered an ownership culture.
Within only 100 days, new leadership transformed the tech platform, marketing mix, and rider operations–elevating it from laggard to leader. Delivery Hero then applied this winning playbook to struggling markets. Subsequently, it aggressively hyper-scaled its proven formula for optimizing people and culture across the entire global organization, IPO-ing in 2017.
Similarly, Kevin led the award-winning hyper-turnaround of VivoPower in 2021 with a playbook that involved “defibrillating” the culture.
2. Operating and Financial Data
In his hyper-turnaround experiences, including RuleBurst and VivoPower, Kevin notes that such situations are typically born of ill-managed high-growth strategies. A common denominator is the opacity of operating and financial data; businesses simply lose track and control with more volume of activity and people to manage.
As a critical priority, Kevin extracts granular data on every cash line item and other key operating metrics, then executes swiftly on controllable elements. Similarly, in a hyper-scale context, it is essential to have a business intelligence dashboard that provides real-time data—otherwise, it’s like flying a modern jet with an antiquated instrument panel.
3. Tech and Processes
In 2012, Martin was brought into Zalando, as the European e-commerce start-up faced intense growing pains. A drive for growth at all costs led to high expenses, especially for digital marketing and fulfillment.
To restore its IPO path, a fast, deep hyper-turnaround was in order. A company-wide hiring freeze–except for tech–was instituted, and processes were automated at record pace. To start hyper-scaling, Martin re-engineered the hiring process, using online programming tests and recruiting from abroad. Monthly hires increased tenfold. That tech talent was then deployed not only to customer-facing projects but, more importantly, to automation of internal processes.
While growth accelerated, Zalando became leaner and more profitable, culminating in a successful IPO in 2014. Zalando remains listed on Germany’s stock market with a multi-billion valuation.
To be a 10X entrepreneur, you have to capitalize on both peaks and troughs. Only an operator skilled in both hyper-turnaround and hyper-scaling can do that and ultimately achieve a 10x value creation outcome.
Categories: BUSINESS GROWTH Entrepreneurial Journey Impact OPERATIONS