I had just gotten the CEO position. I wasn't completely sure of the story behind the company problems. The company was bleeding red ink, and we didn't have a lot of time to make changes. During the interview process board members asked how long the turnaround would take? What would I do? All were interesting questions, and perhaps legitimate from their perspective. But I'm not wired that way. Rush to judgment with an extreme makeover would be like a surgeon deciding to remove the patients lungs without a thorough diagnosis. The principle is the same when leading the turnaround of a company or any significant change.
Extreme makeovers are metaphorically like a heart transplant. Organizations are living organisms. They are made up of humans who evolve, adjust and grow.
Extreme makeovers are like New Year's resolutions. Easy to make, hard to sustain, seldom successful.
Here are the steps we followed and turned the company around in 2 years.
1. Do your own research. Organizations which are struggling have a thousand critics and an equal number who feel they have the right solution. From owners, other employees, regulators, customers. All have different perspectives. As the CEO, your duty is to do your own research as to what is going on. The first step is to sort out the noise.
2. Be vulnerable as you research. Set aside your ego, your title, and any arrogance. Be vulnerable if you want people to be open with you. You will be a welcome surprise to most employees if the culture had been top down, secretive, and had leadership silos.
3. Be absolutely clear what you stand for. Clarity is conviction to your core values and the courage to live by those values as they are tested. Some leaders get their opportunity to lead because of the culture or politics. An unhealthy culture or politically driven leadership will prevent you from doing your own best research. This was my first test. All you need is the courage to live your core values. Magic begins, when you are open and vulnerable. People begin to trust and hope replaces despair.
4. Search for truth. Your diagnosis will be one of the key leadership decision's of your legacy. Get it right from the beginning. If your diagnosis is wrong because short cut research, you may cause more damage and slow the recovery. If your diagnosis is wrong because of an honest error in cause and effect, you will likely have time to adjust. Seeking truth is difficult as people run for the hills in tough times. This is an important time to gain personal clarity of your own purpose.
5. Find individuals with similar core values. Those who share your beliefs and want to run with you. All may not run at your pace, if you are impatient. But find people in your organization who are on the same page as you. In our turnaround, we found mid level managers shared the same values, beliefs and personal drive to turn the organization around. They were from different generations, different styles-some introvert, some extrovert, women proved most courageous and clear. You may have all the right people in the organization now. Maybe the old culture was unhealthy and stifled the values you expect.
6. Decide the top 3 business focus areas. Once you've assessed and diagnosed what is going on...decide the top 3 or 4 critical business measures you want everyone in the organization to focus on. It must be on their minds daily, in your conversations, measured, monitored, celebrated. Regulators, owners, employees, and a host of others might see 100 different focus areas. You can't turn the ship around with chaos. One hundred different focus areas means chaos.
7. Decide the top 3 cultural focus areas. This is the soft stuff, the ecological stuff, the feeling stuff. And the things which probably were ignored in the past.
8. Engage everyone. Think of your job as getting 1000 voices to sing on the same song sheet. Sing the same song, with the same rhythm, same verses, same crescendo. Business transformation works when the majority are on the same page, singing the same song, anticipating the next verse. The song really should be the story of your organization.
These steps may sound too simple to transform a business quickly. But follow it, it works and you will see sustainable results.
