7. WHAT TYPE OF MANAGEMENT IS NEEDED FOR A
TURNAROUND?
Turnaround is a moment of truth.
Clearly, a turnaround requires not only different priorities and
methods, but also different attitudes, aptitudes and skills than those
that are required to run a stable and profitable business.
Attitudes required. As mentioned previously, a real corporate
turnaround is a business revolution, one without real bloodshed, but a
revolution nevertheless. And as any successful revolution, a corporate
turnaround requires leadership with a habit of rigorous thinking and
penetrating analysis, a keen eye for opportunities, courage and
sustained willingness to fight for one's cause, and other attitudes and
aptitudes detailed below – including a Can-Do spirit that is both
visionary and pragmatic at the same time (See Attitudes
That Turn Things Around for more information).
One Early Objective. Obviously, these attitudes and aptitudes
are in short supply in companies that are in distress, and an early
objective of a turnaround is to instill in the employees and in outside
parties a founded belief that the company will succeed.
Higher Management
Standards. But more than these attitudes and aptitudes are
needed. Turnarounds require also a greater technical management
knowledge, broader experience, higher energy, better interviewing and
research skills, more questioning minds and better negotiating skills,
than business-as-usual (custodial type) management.
A successful turnaround requires a leader who sees opportunity where
others do not, who is able to make decisions quickly based on
penetrating evaluation (calling for particularly strong analysis and
interviewing skills), a leader who is not afraid to innovate, who, in a
crisis situation, has
the drive to put in 70 – 80 hours of work a week and sometimes more—for a long stretch of time. It is worth repeating that a turnaround
leader is prepared not only to work for the company, but to fight for
it.
Turnaround
Environment. These qualifications are essential, because
typically, in a turnaround you have to make certain cuts, a corporate
surgery, to keep the rest of the body corporate alive, and you
also have to reposition, restructure and re-engineer the company – and
you have to do this in a very tough environment, and in particular :
"with all kinds of negative forces
working against you in an environment of shortages, shortages of money,
shortages of products, shortages of cooperation, shortages of
everything." (F.Grasanti, Turnaround Specialist)
Clearly, this is an environment that most managers are totally
unfamiliar with. In most cases, this is the reason for calling
upon a specialist to solve the problem. If the above list (in section 4)
of critical
financial problems and other
critical symptoms describes your company's situation, if your
company is in danger of failing or is otherwise in serious trouble, if
you want to achieve a corporate recovery, and if you feel that your
present management does not have the necessary skills, attitude, drive and
know-how, then you should consider hiring outside
turnaround services.
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