A few years back I was asked to speak on a panel at a major business colloquium with a corporate CEO and two other interim CEO/Turnaround professionals. Our question: what do turnaround folks do and how can we avoid needing one? It struck me as interesting that only two of us, the sitting CEO and me, saw the first step in answering the question as being about clarity of focus on customers, the folks who give us all a reason to show up in the morning.
So what does it take to keep a company healthy? I believe that the key attribute is maintaining an internal environment that encourages its people top to bottom to be alert to the external environment.
What is going on in customer businesses? What can we learn from our vendors? What concerns do they have that we can address now or might want to address tomorrow? How is our environment and theirs changing? What is on the horizon? This effort to understand the external world is not only the job of top management but of everyone in the organization. Top management needs to create an awareness at every level of the importance of taking in and interpreting the information that is coming in.
What goes with this is the fostering of an organization alert to learning; one where employees are constantly scanning their environment for lessons learned, considering possible improvements or new approaches to production; pursuing what the Japanese call kaizen – constant small improvements.
This in turn calls for leaders at every level who encourage this awareness and are able to lead with their ears, to hear what their employees are telling them and create opportunities to listen, learn, adapt, and assimilate while keeping production priorities in mind. Which leads in turn to fostering collaboration in achieving objectives and considering how to apply lessons learned and respond to changes in customer behavior. If you see a turtle on top of a fence post, you know he did not get there alone.
Getting that turtle up there requires not only collaboration but tools. Each person in the company needs to know what preparation he or she needs to do his or her part, and how to get the right equipment, whether training or technology or hard equipment to support its achievement. Paramount in accomplishing that part, however, is understanding how each person’s job helps achieve the company’s mission, and building a sense of shared responsibility for results.
That sense of shared contribution takes us to defining our corporate culture: what do we believe in? How do we behave? Why do we care and how do we express ourselves? Which brings us finally to the question of shared vision, of why? What is the company trying to do, and why? And most important, does everyone in the company understand the vision? We need to adapt the timeless phrase slightly, to say that for want of a shared understanding of the vision, the people shall perish, and along with them, the corporate enterprise.
Contrast these attributes with the distressed company. Leaders have often shut their ears along with their doors, not because they don’t want to know but because they are ashamed if not have the answer. They do not trust their organization to generate answers.
Many distressed companies I have served exhibit what I call an hourglass structure, in which only a few people have roles that enable them to see corporate or headquarters policies and issues as well as the issues faced by the operating areas of the company. In fact, in many they are kept very separate deliberately, with big heavy wooden doors deadening the sound so corporate people are not disturbed by messy operations.
In distressed companies, these efforts often boomerang as there is no place for them to fit. Company processes, stressed to breaking, have become brittle and cannot adapt.
Deborah Midanek Bailey
Deborah is a corporate director and long time restructuring professional.
Deborah has been directly involved in much of the extraordinary innovation that has taken place on Wall Street over the last few decades, and in handling the consequences of its excess. With solid knowledge of capital markets from all points of view and a long record of success in building and rebuilding companies from the bottom up, Deborah focuses relentlessly on defining transitions as positive processes. Not interested in merely preserving companies, organizations and jobs, instead she works to drive them to levels previously unimagined. She has led turnaround teams for diverse companies including Parmalat USA, Mississippi Chemical, and FINOVA. Earlier, she served as CEO of United Companies Financial Corporation and Standard Brands Paint.