The resurrection of a failing or even dying organization is often fraught with a sense of panic. To some the panic is so mild that the leaders believe, in their own self-righteous wisdom that they can ‘weather’ the storm. For others, complete chaos ensues and the downward spiral begins to accelerate. How organizations choose to move beyond their current circumstance rests almost entirely on management and corporate identity. In the past I have written a great deal on corporate identity and ‘knowing thyself;’ in a turnaround situation these concepts are jugular.
Organizational change finds its basis with a vision; centrally a vision of something greater than itself. I do have knowledge of organizations whose vision is to wind down and shut down. However, for organizations which have a drive to achieve their true potential; a vision and a visionary are paramount. As I try to distance myself from my recent South East engagement of a turnaround organization, I would like to share some of the ‘DOs and DON’Ts’. Organizational turnaround requires very specialized talent. It requires a leadership team that understands the dynamics of the organization, the market place and how to institute cultural change.
Through my engagement with the firm, one of the senior executives based her entire turnaround process on one of her management books, Good TO Great, by Jim Collins (2001). In the book, Collins examines companies over a 20+ year period to identify those characteristics of companies that catapult them beyond their peer group. Barbara (not her real name) was so connected with Collins’ work that it became her bible, so much so she had everyone on the management team study it. As the executives undertook meetings and strategic visions, they often changed the phrases dispersed throughout the book. In the short time I was engaged by the firm, I was so overwhelmed with the Collin’s mantra I had to get the book myself.
In reading the book and looking back on the organization I am able to see some glaring flaws in Barbara’s vision. Collins professes “get the right people on the bus.” Essentially, have the right people in the right positions and they will do the right thing. My question was, “Who are the right people?” I have come to realize, the right people are those who have the self-discipline and the knowledge to do what needs to be done. They have the unencumbered role to make hard decisions while implementing the vision. These ‘right people’ must be selected from the hoards of candidates in the market place.
Here is failure number one; Barbara’s organization was unable to identify the ‘right’ people. The first assumption in finding the right people is whether the person undertaking the selection process is, in fact, one of the ‘right’ people. Secondly, when seeking a person for a specific role, such as a turnaround, it is essential that the candidate must have done this type of work in the past. As an example, no matter how astute the hiring manager is, hiring a VP of global tax requires knowledge of taxation. Just because the person indicates they have the skill, doesn’t mean they can convert knowledge to action. In a turnaround, time is of the essence, the wrong people on the bus equates to a timely crash!
Often the organization does not have the judgmental skills to identify the required talent necessary to meet the actual needs. To overcome this barrier, organizations should seek the advice of their outside advisors, auditors, tax advisors or their legal counsel.
Having the ‘right’ people also means having the right leader. All the brilliant people in the world, without a great leader will only produce mediocre results. Collins discusses different types of leaders. He settles that the leader must put the company above all else, bring forth humility and professional will. The leader must have ambition first and foremost for the company and concern for its success, well beyond his/her own personal ambitions!
With a strong Collins Level 5 leader and the right people, the organization still must be disciplined. They must know who they are and a vision to their destination. Organizations that chase around the next money making fad end up getting trampled by those organizations that are focused and on the road to greatness. Barbara’s organization is caught in the dilemma of not knowing who they are, what they are good at and what they can be great at. During my short engagement, they believed they were a professional services organization, a software development company, a Six Sigma services organization, and a consulting firm on specialized techniques. Sadly, the company continues to be a sailboat in a typhoon – chaos with no leadership.
One of Collins’ mantras about great companies is their ability to focus on the intersection of three man ideals: i) Being passionate about something, ii) Understanding your economic engine, and iii) Being the best at what you do. Organizations that can achieve all three in a harmonic balance are great. Those that cannot are somewhere on the continuum of mediocre to good. ,
Organizations have the power and ability to change their circumstances. Collins sites numerous references of how companies leap way ahead of their peers and achieve true greatness. In a world overrun by management faddists, brilliant visionaries, ranting futurists, fear mongers and motivational gurus, the achievement of greatness is still possible. It begins with the right leader and the right people; those who have the experience doing what needs to be done. Then doing it! Management research, analysis and literature are no replacement for self-disciplined experience and determination. If this were the case, my reading of Clymer Automotive Manual has made me a class ‘A’ mechanic.