What Businesses Can Learn From Romney's 5-Step Battle Plan

Over the past four months, Democrats have enjoyed adopting an effective, counterintuitive strategy: watch the fire on the other shore. The idea is that when attacking your competitor unifies them, you are better off leaving them alone. In absence of a common threat, they fight each other. They do your work for you.

But with Rick Santorum now out of the race and the Republican machine rallying firmly behind Mitt Romney, we can expect the real battle to begin. Democrats gain no edge by staying out and so are now crossing the river to jump firmly into the battle for the election.

How the U.S. presidential race is taking shape offers valuable lessons for anyone with something worth fighting for. Whether you are building a new business, initiating litigation, raising capital, pushing for better schools, or even playing a football match, success depends to a great extent on how you manage the critical first moves, the phase of the game that sets the psychological foundation for the war that will either start you from a position of power or weakness.

Romney’s most recent speeches clearly show us that he is framing the election battle as a turnaround of USA Inc. His argument will likely go something like this: the U.S. economy is in trouble, it needs to be turned around, and I know how to do that. At Bain Capital, he did it for Staples, Domino’s Pizza, Sports Authority, Burger King, and a hundred others.

Like most private equity firms, Bain Capital follows some version of a standard five-step process for turning around companies, so we can expect Romney is thinking in similar terms.

Turning around a business is a lot like handling a medical emergency:

1) Diagnose a problem: Someone falls down on the street and by-passers recognize something is wrong. This person needs help. For corporate turnarounds, the board often notices a problem long before management is willing to admit it.

2) Get a new doctor: Once the problem is diagnosed, we need to bring in an expert or get the patient to the ER, just as companies usually immediately look for new management.

3) Stop the bleeding: The doctor needs to act quickly to stabilize the patient, stop the bleeding, get the heart rate to normal. Once that’s done, we have some time to think. For corporate turnarounds this means stopping all payments, collecting all debt, and shedding off any cash-draining products.

4) Fix it: Now that we have some breathing room, we can investigate what is really wrong and fix it. We take x-rays, operate, put on a cast and let the patient heal in recovery. Corporations need to identify and get rid of losing businesses and emphasize their winners.

5) Live the new normal: The patient is walking the streets again and thinking about bigger and better things. Companies, once recovered, can now start investing in growth and building for the future.

Almost every book and article I've found on corporate turnarounds follows some version of this five-step process. 

The outcome of the U.S. presidential election then hinges on where the public ultimately believes we are in the process. Democrats naturally argue the bleeding has stopped and we are in the recovery room, probably in step 4. For Republicans to win, they will need to convince voters we are still bleeding and need a new doctor, step 2. 

Now you may not be running for president, but you are doing something new in the world. You need investors to fund you, customers to buy from you, and competitors to stay away. Your success in winning the buy-in you need depends to a great extent on where you tell people you are.

Thinking about where I place myself in my story has really proven powerful for me as I promote my book, build my fund, and grow my workshop business. I’ve found people want to be part of something that is just about to happen (step 1 or 2) more than something already underway (step 4 or 5). By crafting my language strategically I can create a sense of excitement and urgency that inspires people to join the movement.

So take a moment now to think ahead of the others. Where are you in your story?

[Image: Flickr user Gage Skidmore]

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