There's more to turning around a troubled business than finding
ways to build up the bottom line. There's plenty of emphasis
on dollars and cents, to be sure, and a return to profitability
is the ultimate measure of success. But an integral element
in achieving a successful turnaround is establishing a team
that will not only work together to revitalize the company,
but one that will stay together after the immediate crisis and
insist on building constructive working relationships with the
company's top management — from the CEO through the vice
presidents, directors and department heads. Of course, building
an effective team is easier said than done. A great reference
source for understanding team dynamics is "The Five Dysfunctions
of a Team: A Leadership Fable" by Patrick M. Lencioni,
which can be purchased on www.Amazon.com
Lencioni believes that teamwork is the ultimate competitive
advantage and that it is powerful but rare in today's business
world. "If you could get all the people in an organization
rowing in the same direction," he says, "you could
dominate any industry, in any market, against any competition,
at any time." Never have words been written that so
completely describe a successful turnaround.
Lencioni's key message is that success requires overcoming five
dysfunctions that are capable of tearing a team apart. These
are:
 Inattention
to results
Avoidance
of Accountability
Lack
of Commitment
Fear
of Conflict
Absence
of Trust
When turnaround professionals arrive on the scene of an engagement
we often find problems that extend well beyond the obvious financial
and operational issues. For example, the CEO might be a dominant
individual who appears impressive on the surface but lacks the
depth to manage a complex business. Or as the company falls
behind and fails to develop essential strategic plans, key shareholders
become weary of supporting the company, both financially and
emotionally. Family disputes and generational conflicts punctuate
internal battles. Feelings of panic, depression, anger and embarrassment
add to the project's complexity. Somehow, we must bring some
semblance of order into the situation and it starts with the
relationship we build with the CEO. It's not always possible
but giving the CEO a positive stake in the outcome can enhance
prospects for success. Much depends, however, on the CEO's attitude.
Sometimes he (or she) is cooperative and receptive to change;
sometimes the CEO is obstructive and resistant, seeing the arrival
of a turnaround professional as a threat to his authority and
control.
The first, and most important, step in building trust and
alleviating fear is to help the CEO recognize the situation
and embrace the challenge of returning the company to profitability.
One way to secure this cooperation and trust is to clearly outline
a path to success. A sense of being completely overwhelmed is
natural; presenting a plan with clear and measurable steps helps
to focus the CEO on the task at hand.
|
When the turnaround professional and CEO work as allies, and
top management supports the plan, the opportunity for long-term
success is enhanced.
Creating this crucial alliance is often more difficult when
dealing with a CEO who responds to crisis with emotion rather
than reason, by expressing anger and disbelief and pointing
the finger of blame rather than acknowledging his own responsibilities.
Such resistance may occur if the CEO fears suffering embarrassment
— both personal and professional — related to a perceived
failure. Embarrassment might be the least of the CEO's worries
— his home, the family business, his closest personal
relationships might also be at stake.
As we build the turnaround team, working with top managers
poses a distinct challenge. One of the main reasons companies
fail to perform is because of poor management — yet the
turnaround professional hired to direct a reversal of the
company's fortunes all too often has to work with a management
team that bears significant responsibility for the company's
decline. Again the ability to build trust and alleviate fear
is essential but even more important is finding out who in
management is committed to the turnaround. To achieve lasting,
positive change the turnaround plan has to be built on clearly
defined goals, with set timeframes for completion and an environment
of accountability for one's actions.
Our experience shows that the great managers and teams
have been begging for this accountability, responsibility
and authority. Top performers will consider these concepts
liberating and will embrace them with enthusiasm. For others,
the bright lights of accountability will only illuminate their
lack of commitment to the turnaround. From a team perspective,
members who cannot commit to the cause, hold themselves accountable
for their actions and pay attention to the details, need to
move on. In a turnaround, it is far better to have the right
team in place at the start than to release non-performers
and make substitutions in the middle of the battle.
Even the best turnaround professional can't promise success
in every engagement, but establishing a positive role for
the CEO and consolidating key managers into a dedicated team
will enhance the likelihood of a favorable outcome.
Write to me.
|
