How to Steer a Twitter Turnaround · Babson Thought & Action

Entrepreneur Elon Musk’s controversial $44 billion Twitter takeover has already drawn sharp reactions from company insiders and loyalists, but the fierce pushback may actually be a good sign, said Bret Bero P’14 of Babson College’s Management Division.

“If the current business model is not successful, then having a new leader who is a little belligerent is not a bad thing,” the assistant professor of practice said. “You don’t want someone coming in and maintaining the status quo if the status quo is losing money.”

Musk has made a series of rapid-fire changes since he bought Twitter for $44 billion on October 27. He eliminated the platform’s nine-member board and brought in his own team, including his lawyer Alex Spiro and investors David Sachs and Jason Kalakonis.

Illustration of Elon Musk, entrepreneur and new owner of Twitter
Entrepreneur Elon Musk wants to make Twitter profitable again.

“He needs to come up with a new business model that works, and he needs new leadership to help drive the changes and execute the new plan,” Bero said.

Bero has led dozens of private-equity turnarounds over the course of his career and teaches strategy and leads business turnarounds at Babson. He said Musk’s quick pace is another good indication that the billionaire realizes he’s on a tight timeline.

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“Every turnaround executive has roughly a 90-day window to show progress. The first 30 days are spent evaluating the problems in more detail, because once you get into the business and see the internal reports, you start to see details that you have Don’t know about,” Bero said. “At the end of 30 days, he can begin to articulate some major changes and build a plan and a management team to move forward. The last 30 days should begin to implement the desired changes.”

A timeline of turnaround

Twitter has struggled to turn a profit since it started in San Francisco in 2006, and while it remains one of the most popular forms of social media, the company reported $221 million in losses last year and admitted to overestimating the number of users with So much. Like 1.9 million.

Musk unveiled other changes to the struggling social media platform this week, detailing a new monthly subscription service that gives users a blue “verified user” checkmark, access to greater spam and ad blocking and the ability to post more videos.

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“Twitter’s current lord and peasant system of who does or does not have a blue checkmark is bull(****),” Musk tweeted Tuesday. “Power to the people! Blue for $8/month.

Several critics blasted the move, including horror authors Stephen Kingwho tweeted that he would be “gone like Enron,” if the subscription fee was installed.

Babson Assistant Professor of Practice Bret Bero
Babson Assistant Professor of Practice Bret Bero Weighs in on Elon Musk’s Twitter Takeover.

“Usually you don’t want to think out loud,” Bero said. The mistake could be because Musk’s experience was starting companies like Tesla from scratch rather than trying to fix an already existing company, he added.

“Throwing a bunch of ideas out there can be worthwhile, but usually turnaround artists don’t do that,” Bero said. “They’re going to take the first 30 days and 60 days to build their plan and their team, and then start executing before they start talking about it.”

Musk also should make an early effort to connect with remaining Twitter employees, Berro said.

“I worked for a living before I came to Babson, and what I would say when I walked into an organization was, ‘Look, I’m your last, best hope to save the company. I promise that the things I tell you What I will do will be the things that I work on. And if we succeed in them, we will succeed and you will benefit from it, “said Bero. “That’s how a turnaround leader builds credibility and trust.”

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Bero added that Musk is more combative than most and has also jumped the gun when it comes to sharing and implementing his profit-boosting strategies.

“Being kind of a volunteer like he is, it makes it harder for the organization to really understand where he’s trying to go and get behind it,” Bero said. “My only coaching to him is to share the plan with your team. Don’t share with customers or employees until you figure out which one of the things you really want to move forward on.

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