In January 2003, McDonald’s announced its first quarterly loss, a $344 million deficit for the final three months of 2002. Restructuring charges accounted for much of the loss, but the warning signs were already visible in the restaurants. Comparable sales were falling, service was inconsistent, and customers had fewer reasons to choose a brand that had once felt indispensable.
Jim Cantalupo returned as CEO and challenged a business that had prioritized opening restaurants while existing locations lost appeal. His leadership team adopted a Plan to Win with an ambition customers could understand: become their favorite place and way to eat. People, Products, Place, Price, and Promotion became operating responsibilities connected to the brand promise, rather than separate initiatives competing for resources.
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The economic logic was immediate. Better food and faster, friendlier service could increase repeat visits; more relevant menu choices could create additional occasions to buy; and improved restaurant productivity could help turn those visits into profit. Global comparable sales moved from a 2.1% decline in 2002 to growth of 2.4% in 2003 and 6.9% in 2004. The i’m lovin’ it campaign brought the renewed brand attitude to life, as we explored on BSI in the story behind i’m lovin’ it.
CEOs Often Treat The Symptoms And Neglect The Brand
Brand deterioration usually reaches the income statement before anyone calls it a brand problem. Customers buy less often, negotiate harder, defect more easily, or demand discounts to overcome their preference for competitors. Those behaviors weaken revenue quality, pricing power, lifetime value, and margins, eventually reducing the enterprise’s worth.
When cash is running short, executives have to act decisively. They cut expenses, sell assets, close locations, and reorganize, sometimes appropriately. But a CEO who cannot distinguish wasted spending from the capabilities customers value may improve this quarter’s numbers while accelerating next year’s decline. The board should ask which proposed cuts will make the company harder to choose.
Sears illustrates the cost of that failure. Under Eddie Lampert, leadership failed to invest sufficiently in the shopping experience, merchandise, service, and digital capabilities needed to restore relevance. Kenmore, Craftsman, and DieHard retained valuable equity, but the retail experience increasingly gave customers reasons to shop elsewhere. Sears Holdings entered bankruptcy in 2018, six years after we called for reinvention around its strongest brands here on BSI.
Kodak’s executives made a different mistake. They developed and sold digital technology but struggled to create a sufficiently profitable business as people changed how they captured, shared, and stored images. Kodak entered bankruptcy protection in 2012. Its famous name and technical ingenuity could not replace the economics of the film business it was losing.
The Winners Changed The Reasons Customers Chose Them
Nissan’s 1999 crisis was a brand problem as well as a financial one. Debt was crushing, products had lost appeal, and dealers needed significant incentives to overcome buyers’ preference for competitors. Carlos Ghosn’s Nissan Revival Plan challenged costs and organizational practices while renewing the products customers would encounter. The Bold and Thoughtful brand direction helped turn design and engineering strengths into a more distinctive reason to buy.
By fiscal 2001, Nissan had achieved a 7.9% operating margin and reduced net automotive debt to approximately ¥432 billion. The recovery joined stronger products and renewed customer interest with improved operating economics. Nissan’s later difficulties make the other half of the lesson clear: the CEO must keep renewing that advantage after the restructuring is finished.
IBM was losing $8.1 billion in 1993 when Lou Gerstner took charge. He resisted breaking the company apart and built on what enterprise customers could value most: IBM’s ability to integrate technology, expertise, and services to solve difficult business problems. Operating changes supported a more compelling customer proposition, and IBM returned to profitability in 1994. BSI has also examined the perils of a turnaround without a clear vision, a warning relevant to any CEO asking employees and investors to believe in a recovery.
LEGO was nearly undone by complexity and diversification in the early 2000s. Under Jørgen Vig Knudstorp, leadership simplified operations, withdrew from distractions, and renewed investment in the building system that made the brand distinctive. Innovation became more disciplined because the company understood the experience it needed to protect. LEGO’s annual revenue reached DKK 35.8 billion in 2015.
These businesses made difficult decisions about costs, capital, people, and products, but their brand direction shaped which decisions were worth making. The objective was to create reasons for customers to choose again and to deliver those reasons at attractive economics. That is the brand-business connection missing from too many turnaround plans.
The Blake Project helps leadership teams connect brand strategy to business performance and enterprise value. We work with executives on the decisions and organizational changes that make customer preference commercially productive. Explore our work.
A Plan To Win Puts The Entire Business On One Page
At The Blake Project, we have seen how quickly a struggling business becomes a collection of competing executive priorities. A Plan to Win gives leadership a shared view of where the company can win, why customers should choose it, and how each function will contribute. It makes the brand promise useful in decisions about capital, operations, people, and performance.
The eight-P framework begins with Purpose, the ambition that guides the enterprise, and Promise, the experience customers can count on. People, Product, Place, Price, and Promotion define what must happen to deliver it. Performance tests progress through customer and financial measures, linking experience quality to the economics of the business.
McDonald’s made that logic concrete. Service standards guided employee behavior; food relevance and restaurant experience supported frequency; pricing and productivity protected the economics of value. Promotion could reinforce improvements customers actually experienced. For a B2B manufacturer, the same approach might connect a promise of reliability to product quality, delivery performance, technical support, renewals, price realization, and margin.
The CEO should require a one-page plan that names the customers and markets worth defending, the operating changes each function owns, the investments to protect, and the activities to stop. Track retention, purchase frequency or renewal, preference, pricing power, contribution margin, and cash alongside those actions. As we have argued on BSI, brand strategy must change the economics of choice. If the promise never changes a resource decision, an employee behavior, or a customer outcome, the plan is unfinished.
The First 90 Days Must Prove The Plan Can Work
In the first 15 days, establish the facts. Build a 13-week cash forecast, identify where margin and customers are being lost, and speak with former customers, lost prospects, frontline employees, and channel partners. Find where the brand promise is breaking down and which capabilities are still earning preference. Protect liquidity without stripping away what your best customers came for.
By day 30, the CEO and executive team should have settled where the business can win and what it will stop pursuing. Translate Purpose and Promise into priorities across the five action Ps, then move resources toward the experiences, products, and relationships most likely to restore profitable demand. Name the executive accountable for each commitment. A turnaround cannot accommodate every legacy priority.
During days 31 through 60, make the improvements visible to customers. Correct service failures, sharpen the offering, remove buying friction, and give sales teams a reason to defend value without reflexive discounting. Align incentives and agency partners with the same commercial outcomes. Review milestones weekly and remove obstacles before they become excuses.
By day 90, require evidence that customer behavior is changing. Compare retention, purchase frequency, service performance, price realization, margin, and cash with the opening baseline, recognizing that some results will take longer to appear. Expand what works and stop what does not. The first quarter should demonstrate leadership’s capacity to execute the next one.
The Question The Board Should Ask
Boards rightly demand cash discipline, but they should also demand an answer to the source of future demand. Why will customers choose this company again, what will its people do differently to earn that choice, and how will the resulting preference strengthen profitability? Sears and Kodak show the cost of failing to answer in time. McDonald’s, Nissan, IBM, and LEGO show how renewal becomes possible when the customer proposition and business economics improve together.
A turnaround plan that cannot connect the brand promise to customer behavior and financial performance is incomplete. Every month leadership delays those decisions gives competitors another opportunity to win the customers, loyalty, and margin the business is losing. The CEO has to make the brand worth choosing and the business capable of profiting from that choice.
Dr. Derrick Daye is Managing Partner of The Blake Project and Publisher of Branding Strategy Insider.
At The Blake Project, we help leadership teams connect brand, business, and financial strategy when the stakes are high. If your company needs to stop the bleeding and rebuild competitive advantage, let’s develop a Plan to Win that earns customer preference and delivers measurable business performance. The decisions that restore value cannot wait for the next planning cycle.
