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Lessons from 11 Companies Show the Keys to a Successful Corporate Turnaround

Insights from Companies Such as HSBC, Bristol-Myers Squibb, Groupe PSA, Nokia, and Qantas Reveal Five Critical Elements of Corporate Turnarounds, According to Analysis of S&P Global 1200 Data by BCG TURN

BOSTON—Eleven company turnarounds over the past decade demonstrate the five critical elements of a successful corporate turnaround, according to analysis of S&P Global 1200 data in a new report, The Comeback Kids, by BCG TURN, a transformation and turnaround unit of The Boston Consulting Group (BCG).

In today’s highly disruptive markets, business leaders need to know how to turn a company around. At any point, about a third of large US companies are experiencing a severe, two-year decline in their ability to create shareholder value. And about a third of those companies fail to recover the loss in value within the following five years. Most companies need to transform at least once during any five-year window, according to the report.

The BCG TURN analysis screened the S&P Global 1200 for companies that had endured a significant decline in revenue, profit margins, and/or market capitalization since 2010 (excluding declines due to currency fluctuations), followed by a clear rebound. It found 11 examples of companies that successfully transformed in the face of unprecedented challenges.

The companies include financial services firm HSBC, pharmaceutical company Bristol-Myers Squibb, medical device company Boston Scientific, technology firm Nokia, paper and biofuel company UPM-Kymmene, automaker Groupe PSA, medtech company Olympus, chemicals company Ajinomoto, petrochemicals firm Lanxess, airline Qantas, and infrastructure company Acciona.

These companies show the substantial value that a successful turnaround can create for shareholders. Collectively, the companies’ margins have increased by a weighted average of more than 50% since 2013. And their share price has jumped by 87% over the same period, compared to an increase in share price of 41% for the S&P Global 1200, according to the BCG analysis.

“What these stories have in common are a formal turnaround program and a successful balance between short-term wins and a long-term strategy to reinvent the company,” said Lars Fæste, a senior partner at BCG TURN and coauthor of the report. “When leaders get transformation right, they can dramatically improve profit margins and generate significant value for shareholders.”

BCG TURN has identified five critical elements of a successful turnaround.

Develop a Clear-Eyed and Objective Understanding of the Company’s Situation

Rather than stalling or waiting for external conditions to change, strong leaders get ahead of the problem with an ambitious program to change the company’s trajectory. In fact, some anticipate problems even before they show up in the company’s financials, using the logic of “If it ain’t broke, fix it anyway.”

Redefine the Company’s Strategic Focus

Leaders need to determine where to play (and where to avoid playing) in terms of product and service offerings, customer segments, and geographic markets. And they need to take action to divest, acquire, or invest in new businesses or R&D in order to align the company with their strategic focus.

“Bristol-Myers Squibb transformed from a diversified health care company into a focused biopharmaceutical firm by divesting from nonpriority businesses like diagnostic imaging and doubling down on specific categories of drugs like immuno-oncology,” said Ramón Baeza, a senior partner at BCG TURN and coauthor of the report. “Since 2013, the turnaround effort at BMS has led to a 18% increase in revenue and a 15% increase in EBITDA margins.”

Restructure to Reduce Costs and Complexity

Turnaround programs must rapidly improve operations to reduce costs, and such improvements almost always entail changes to the organization or the operating model. All of the “comeback kids” companies found places to cut or restructure costs, such as by reducing the number of management layers, selling off certain business units, simplifying product portfolios, or lowering head count, according to the report.

Build the Right Culture

In turnaround situations, a culture of discipline, a steady pace, and determined moves are paramount. “For example, Nokia made a bold, successful move in restructuring its business portfolio from devices to a full-fledged network infrastructure provider," said Tuukka Seppä, a senior partner at BCG TURN and coauthor of the report. But perhaps even more difficult in turnaround situations is remaining open to change and innovation. “Nokia decided to retain its patent and technology licensing business in order to continue its legacy of innovation and reinvention. Although the unit accounted for less than 5% of Nokia’s revenue in 2016, it generated 22% of the operating profits and, according to analysts, accounts for an even higher share of the company’s valuation,” added Seppä. 

Invest in Digital

Companies that don’t view digital as a critical part of the turnaround strategy should rethink their plan. Leaders need to free up the funds to invest in digital technology to improve their customer experience, enhance their products and services, increase internal efficiency, and develop new business models. HSBC is investing $2.1 billion from 2015 to 2020 in digital initiatives, according to the report, including automating back-office functions, improving the customer journey with mobile platforms, and creating an intelligence unit to spot financial irregularities among customers.

To read The Comeback Kids, visit:

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or


BCG TURN is a special transformation and turnaround unit of The Boston Consulting Group that works with business leaders to deliver rapid, sustainable, and visible performance improvements, while strengthening their organizations and positioning them to win in the years ahead. By collaborating shoulder to shoulder with the client and being a true performance partner, BCG TURN achieves change that lasts. Team members include BCG TURN experts such as former CEOs, C-suite leaders, and other highly experienced professionals. BCG TURN is fully integrated into BCG and fully leverages the breadth of BCG expertise, networks, data, and tools. For more information about BCG TURN and the BCG TURN approach, please visit

About Boston Consulting Group

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact.

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