Many big companies that have filed for Chapter 11 or been the brink of bankruptcy have been able to take incredible steps to organize hugely successful comebacks. The decisions made by company leadership during times of crisis and during restructuring have been crucial to the companies’ comebacks and provide critical lessons for businesses looking to transform challenges into opportunities for growth and improvement.
Steve Jobs orchestrated one of the best-known company comebacks for Apple, Inc. He negotiated a deal with Microsoft in 1997 that saved the company from bankruptcy with a $150 million investment and updated the Mac version of Microsoft Office. Jobs studied the organization and implemented a change management strategy that propelled Apple into developing cutting-edge technology for more than a decade.
Instead of banking on the success of the late 1990s, Jobs looked ahead. He connected the iPod, iPhone, and iTunes Store to open new markets that would change the way we interact with our personal technology and media. One of the keys to his success was good project and change management strategy. Change was part of his strategy from the beginning until the end. He adopted change as part of the company’s success. With excellent organizational consulting firms like Ruota Consulting, specializing in helping companies face challenges, companies can develop and pursue successful change management strategies like what Steve Jobs put in place for Apple.
Continental and United Airlines
Continental Airlines suffered two bankruptcies, one in 1983 and the other 1990. Though it continued to operate flights, thanks to the Bankruptcy Protection Law, the airline struggled into the 2000s. In 2002, United Airlines faced bankruptcy as well. The two airlines commenced negotiations of a merger that would pool together their resources and hopefully minimize the damages of bankruptcy. This merger finally took place officially in 2010, and the two became United Continental Holdings. By 2015, United Continental Holdings had become the 345th largest company in the world, according to Forbes Global 2000 ratings.
Marvel Worldwide, Inc.
Marvel entered bankruptcy in 1996, as it became clear that comic books were a dying medium. Though instead of allowing the company to join the ranks of forgotten heroes, the company’s leadership did a serious self-evaluation during this crisis and made critical decisions based on this assessment. Years later these good decisions paid off, with the company carrying a $4 billion price tag when Disney Company acquired it in 2009.
The key to Marvel’s comeback success was looking inward and carefully and accurately evaluating the strengths of the company. Marvel’s core business strengths included a highly loyal customer base, powerful brand, thousands of widely known characters, and even thousands more already-proven successful stories. Its executives keenly identified that profitability in a digital entertainment industry would come from proprietary content and banking on high-paying repeatable formulas for the digital medium. Today, Marvel is a movie giant, and its stories and characters are essential elements of popular culture.
Trump Entertainment Resorts
Donald Trump companies have bankrupted four times. Each bankruptcy though has provided an opportunity for Trump’s companies to restructure and improve their financial position. Trump has also lost the great majority of ownership and been forced to resign. However, this too is not necessarily a bad thing. Sometimes, it’s hard to fix mistakes with the same leadership. Change is not always bad, and with an estimated net worth of $4.1 billion dollars in June 2015, according to Forbes, it’s clear that Trump is not bad off after multiple bankruptcies and losing influence in his company.
Companies should always act responsibly in managing their resources. However, sometimes crises are unavoidable, and can bring on needed change. These moments provide critical opportunities for good leadership to take hold and effect changes that will put the company in a better situation down the road. A company that takes the time to recognize these opportunities, equip itself with support, and develop plans for change can actually come out of a financial challenge like bankruptcy even stronger than before.