Good Leadership is absolutely requisite in a business organisation turnaround situation. Depending on your role, the entire Company is looking to you for direction, options and a viable future. It is good leadership that gets a Company through the tough times. In this article I provide some valuable leadership tips that can be applied to the Company CEO, Turnaround Specialist, Business Consultant and / or the Interim / Turnaround / Restructuring CEO. Extensive experience within the Turnaround Team is essential, but it must be linked with excellent leadership. Having previously discussed the essential qualities, characteristics and traits of a good Leader, in this post I will examine Leadership skills and roles to employ in order to successfully execute a Business Turnaround.
Earn Trust and Instill Confidence: Give it to the employees straight on and be completely honest and straight-forward with them. Win them over- you can’t have a successful turnaround without having the “soul” of the Company behind you, the employees.
Openness, Frankness and Honesty: Carefully and fully disclose the entire situation to Company Management and the employees. Develop a reputation for being completely open. This gives employees a realistic picture and expectation, making them more willing to sacrifice for the good of the Company as a whole.
Integrity: This is so important to understand! A good business turnaround process is all about integrity and ethics. It is NOT about quick reactive moves without much thinking, analytic thinking or planning, such as: a fire sale of business assets, slashing jobs, and selling the leftover skeleton of a business to a private equity concern. Successful business turnaround is about SAVING the company with some solid turnaround planning and strategies. It is crucial to have the complete support of the entire company behind the turnaround plan. By having integrity and developing trust throughout a company, employees can get behind the business turnaround plan and push it through with lots of hard work to successful finish. All this comes from a basis of integrity, ethics and finally trust.
Transparency: Secrecy and behind the door dealing are often the chief reasons for failure in a Company turnaround. You need the input and assistance of the entire Company to successfully pull off a Company rebound and turnabout. Transparency of the Company leadership and Turnaround Team is extremely important in encouraging this critical teamwork.
Clear Communications: understandably communicating the Company problems is the first step in winning over the trust, confidence and support of Company Management and Employees. Clear communications play into the transparency factor, dispelling any impression of secrecy or underhandedness. Also, as important, are clear, open communications with customers, suppliers and bankers, as without them, no Turnaround Strategy can succeed.
Listen: This is probably the most important skill to have in a turnaround situation. Listen to everyone in the Company- they all have valuable insight, ideas and experience, while also instilling strong ties of trust and confidence between the executive management and staff/ worker ranks. Listen first, advise later.
Availability and Accessibility: The Turnaround Team should be available via cell phone and email to all employees. Be sure to answer each email and call people back. Particularly, if done by the CEO himself, this instills incredible espirt de corps, which is essential to a turnaround being successful. Also, it is important the entire turnaround team is approachable as some employees may prefer to talk to certain people, versus going straight to the CEO.
Hard Work: There should be a clear understanding throughout the entire enterprise that a lot of time and endless hours of work are necessary at all levels of the Company, without the merit of extra pay, for a Turnaround Strategy to be successfully developed and implemented.
Sacrifice: Sacrifice starts at the top and if top echelon of the Company leads by example, then the rest of the Company’s employees will be willing to make the sacrifices necessary to successfully rebound.
Control and Performance Systems: As a Business Turnaround Consultant, I impress upon the business owner that accountability and results are very important in a Turnaround Strategy implementation. Control and performance structure in the Business Plan, along with processes and systems for the Company turnaround, must be installed throughout the entire Company. Power and control in the hands of a few breeds distrust and poor results in a turnaround situation. Having systems in place to gauge the performance of the Company in terms of Turnaround Strategic Goals and Milestones is quite important to keeping things on track an making sure clear communications flow.
Discipline: Once the Turnaround Strategy is developed, you must have the discipline and constitution to see it through. Second guessing and lack of confidence in the Rebound Plan will end in failure every time. Once the plan is developed and agreed on, with the input of the entire Company, have the fortitude to carry it out. This is where having a CEO with the necessary qualities (as discussed in the previous section) is so vitally important.
Rewards: A successful turnaround situation will be the most rewarding part of any business career. This is why as a Business Consultant I absolutely love working on a Turnaround Team. When times get tough (and they certainly will), remember the end game and the employees and the turnaround team is accountable to and for.
Integrity = Success
There should be no fine lines or grey areas. Transparency, honesty, openness, trustworthiness, integrity and ethics are critically important because, remember, that a Turnaround may end in a Re-Structuring, Bankruptcy, Liquidation and/ or Sale if the Company is too far gone to recover. If the Turnaround Team is open and honest from the beginning with employees, customers, and suppliers, then no matter what happens, if your actions were guided by integrity, people will understand and be accepting of the result. And don’t forget this applies to the Banks and Creditors involved. If people lose their jobs, it is important to have in your Turnaround Plan a job placement service, at the expense of the Company, to place displaced employees in other jobs. If you have a good relationship with your bankers, a little money and resources spent in this area is an easy sell, especially if a Bankruptcy Judge and Trustee are involved.
About the Author – Frank Goley of ABC Business Consulting
Frank Goley is a business consultant, business turnaround consultant and business plan consultant for ABC Business Consulting. He has been helping companies to succeed for many years. Frank wrote his first business plan over twenty years ago. He is an expert in developing business plans, marketing plans, funding plans, strategic plans, turnaround plans, web marketing strategies, and project specific business plans. Frank is also a business coach and a web development, web marketing and web seo consultant. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 50 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog.