“When you are under pressure, make the bold steps faster, don’t make them slower”
– Azim Premji
Financial management is an important function, not only for an individual, but also for a business. CEOs and other company leaders need to manage corporate incomes and expenses in a way that lets them build successful businesses that span across continents and help them earn record profits.
There are a few famous examples of companies that rose from the ashes like a Phoenix – thanks to the smart management strategies implemented by their leaders.
One of the most famous example of a company snatching victory from the jaws of defeat is the story of Apple Computers. It was in 1997, when the then Apple CEO, Gil Amelio, was ousted. This was the time, when Apple was believed to have funds enough to pay only 3-4 months of salaries. This paved the way for the homecoming of Apple’s pioneer and the mastermind behind one of the greatest corporate miracles, Steve Jobs. He was tasked with rescuing the company and what followed is the stuff of corporate legend.
Jobs built a new lean system for running the company. He undertook painful cost cutting measures, like firing the employees he deemed expendable, discontinuing the products that were failing in the market and slashing unnecessary research and development projects. By focusing only on a few key things, Apple was able to limit unnecessary expenditure.
Eventually, Apple launched one product after another, which brought in record sales for the company. The iMac and iPod were the products that brought in an era of prosperity at Apple.
Today, Apple is the most valuable company in the world with a market capitalization of $1 Trillion Dollars!
For a company that was on the verge of bankruptcy, this is quite a turnaround.
Apple is not the only company that pulled off a blockbuster comeback.
We also have a famous Indian example –
The company’s co-founder and Chairman, Ajay Singh had sold most of his stake to Kalanithi Maran of Sun TV for Rs. 750 crore. After massive losses and increasing liabilities which touched Rs. 1500 crore, the Sun TV founder reached out to Ajay Singh for taking the reins of the company. He acquired 58 percent from Kalanithi Maran in the year 2015.
This was just the start of revival. Ajay Singh came up with some phenomenal techniques to cut costs by adding capacity in their flights. He started by chopping off unprofitable routes, which ate up capital and were a drag on the company.
This ensured profits for the next four quarters with the aggregate figure touching Rs. 356 crore!
Ajay Singh says, “The basic problem was of trust. Customers were not booking tickets with us, lessors were taking back planes, vendors had stopped services, and the government was after us for clearing tax dues. Passengers were inconvenienced and employees thought they had no future. Everything that could go wrong had gone wrong”.
In order to change this he got down to the basics. From making sure flights were operating on time, to counters at the airport functioning in full flow. He worked on every single inch of the airline and pulled off the unthinkable.
All the planning and execution saw their stocks go up by 124 percent and gave them a market value of over $1 billion! The annual revenue of Spicejet was Rs 7,795 crores in 2018, with an annual profit of Rs 430 crores. This is a remarkable achievement for a company that was in the doldrums and on the verge of bankruptcy. Another point that needs to be highlighted is that the airline has made record profits despite high fuel prices and taxes.
It’s the leader who makes a lot of difference in building or busting an organization. With a well-defined vision and determined leadership that’s willing to stay the course even in tough times, organizations have made stunning comebacks. The examples listed above are just some of the few success stories. Leadership is learnt on the battlefield, when leaders are placed in tough situations. However, it’s not necessary to experience every tough situation to learn a lesson. That is why we have courses which let candidates learn from the experience of others.
To learn about all the various aspects of finance, management and leadership opt for BSE Institute’s Advanced Management Program in Strategic Finance ( From IIM LUCKNOW ). Learn from the best, to stay ahead of the rest.