Featured Article – 2007 November
How a Turnaround Manager Rebuilds the Team
by Tom Beane
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.