Don DeLoach 
There is a tie between a course correction in more mature organizations, be they older companies or venture or PE-backed companies that are taking too long to succeed or have plateaued, and the fundamentals stressed when helping startups get to market. I’ve done both many times. Both are associated with a clear focus on fundamentals and execution. For entrepreneurs, the fundamentals are hard because they lack experience and may be challenged to deliver the very basic elements needed to move their company from a good idea to scalable, repeatable execution. For companies further downstream, the fundamentals can become obscured in so many ways. There may be issues with leadership or culture leading to improper prioritization or risky practices. There may be a lapse in product market fit alignment due to a lack of ongoing customer discovery and validation. There are many reasons why companies veer off-track, but the ability to execute with precision on the very fundamental aspects of commercialization is, in many ways, the key to moving forward. This focus on fundamentals is as essential for struggling mature companies as for emerging startups. I never made this connection until I spent significant time and energy involved in both scenarios.
Nothing that follows here is rocket science. However, there is often a gap between statements of the obvious and actions to address them. The critical piece for leadership is attention to fundamentals. To do this well, the leadership needs to (genuinely) have a lack of hubris, a desire for ongoing learning and intellectual curiosity, and an outcome-driven leadership style. Assuming leadership has these traits, the playbook can be straightforward and boiled down to assessing the current situation, starting with the preliminary analysis, then digging into the fundamentals of the solution, financials, organizational and operational structure, and team to determine the priority areas to address, then creating the implementation plan. Some specific leadership capabilities are required to pull this off, but again, it’s not rocket science. That said, it’s also not easy. Let’s look a little deeper.
In assessing the current situation, the process should begin by examining the desired outcomes for the organization, where things are now, where they are off and why, and where they are on target and why. This forms the baseline of the course correction, and it’s here that the review of the fundamentals comes into play, starting with an analysis of the solution (or solutions) and the organization in place, including leadership. It’s worth noting that sometimes less is more. A business unit I took over at Sybase in the late 90’s dramatically increased performance when we recused the scope of focus we would support to a very narrow set of options. Whether a startup or course correction, a clear and sometimes more limited focus pays dividends.
Regarding the solution, sometimes more mature companies make assumptions about the product market fit. Why question what’s already out there, right? Not right. The essential problem-solution fit should be revisited and re-validated, noting that it may have never been adequately validated in the first place. Regardless, this should be done. It may be contributing to the struggles. Customer discovery should be re-engaged. You must know your solution is solving a very real problem, and you are sure who has that problem.
Then the financials need a good look. What does the revenue look like? How close has it tracked to the forecast? What are the patterns and trends? What does the cost structure look like? Are the cost projections holding, or are there issues? When reviewing the financial statements, what other areas emerge as candidates requiring further analysis? In this regard, it differs from standard startup analysis, as it is all based on track records. However, it is indeed an analysis of the most fundamental elements, much like the planning and development of early-stage startups. Critical is the attention to fundamentals.
The above analysis creates the landscape by which to review the organization. Does the size of the organization make sense? Are the staffing costs appropriate and sensible? How does the company’s current state – from solution to revenue to operations – look in the context of the team? What is working and what is not? Are there key people that stand out – good or bad – in the analysis? If so, understand why. Most course corrections involve some degree of team adaptation. This starts with leadership. How are they doing? What parts of the organization are well functioning, and which are not, and why? What is the scope and reach of leadership, and what is working and what is not?
With the above analysis, priority areas to address should come into view. The course correction path will define desired outcomes and timeframes, which should become more apparent now. These should include short-term and long-term considerations to improve revenues, reduce costs, improve functional operations, and address leadership and organizational issues. A risk assessment of the course correction plan should also be conducted to validate the implementation options.
Then, it’s time to put things in motion. This requires a prioritized plan that is exceptionally well communicated to the company. It must have a purpose and clear objectives, and everyone must understand how it relates to them. In many cases, it will include staff reductions, and if that is the case, it is all the more critical to clearly articulate what changes are being made, why they are being made, and what outcomes are desired and when. This is where strong, ethical, transparent leadership is a must.
When making all this happen, certain elements are table stakes. A course correction is not a piecemeal effort. You must have the ability to see the holistic picture. You also must be able to clearly understand fundamentals, knowing they may be obscured. Sometimes, this can be more art than science. When engaging, there must be strong and consistent communication. While the fundamentals of such a correction are, in many ways, easy to understand, getting there often requires a certain toughness. Leadership in these instances requires delivering hard messages and taking difficult action. Good leaders can do this based on the knowledge that the benefits for everyone are better when steps like this are taken. There is a human element here, and strong leaders execute with empathy. They point to a clear vision, and actions are framed accordingly. In doing so, the most crucial element in making this work is developed… trust. The desire to get to a better place must be authentic and understood across the organization. In that regard, leaders must lead by example. There is no end to that requirement, and the ability to do so is essential.
