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I have been involved in several turn-arounds; in some, I was brought in from the outside to help right the ship. In these cases, the first 90 days can make or break the turn-around. Here’s what I have learned:
Listen, listen, listen. Listen to everyone, at all levels of the company. Listen to client- and customer-facing people in particular. Ask them out-of-the-ordinary questions, to surprise them into unpracticed answers. Listen to clients live. Listen to social media (don’t just pretend like you do). Listen to your worst critics. Listen to your competitors. Try to keep the ratio of listening to speaking at least 4 to 1.
Focus, focus, focus. Of course, there are a lot of little things that drive a business, but there are typically just a handful that really, really matter. For example, in the wealth management businesses I have been brought into, it has been Financial Advisor attrition. Changing that tide would have an outsized impact on the business results (and morale). Figure out what the key drivers are, and focus on fixing them, leaving the nice-to-do’s for another day (if ever).
Be approachable and visible.
Understand where the sink-the-ship risks are and manage them aggressively.These are different for every business: in a turn-around, they are often financial or operational. For financial services, we have seen that they can be reputational. Thus, in my discussions within the organisations, I always asked the question “What are we doing that you fret about?” and “What are the ‘everybody-knows’ risks: the things that the firm is doing – that maybe all firms are doing, that maybe everyone knows about, that maybe everybody has been doing for a long time – but that you don’t feel 100% good about?”
Receive bad news well…or no-one will ever give you bad news.
Don’t give into the temptation of denigrating the team that came before you. I have seen this again and again: it seems to be human nature to put down the business you are charged with turning around. That way, if you turn it around, you are even more of a hero; and if you don’t, it was in such terrible shape, no-one could have done it, anyway. But by doing this, you are implicitly (or explicitly) putting down the people in the business – and whose help you may need….and who may feel loyalty to the prior management team. Hardly a way to win them over. (And everybody gets why you’re doing it anyway.)
Fight against forming opinions on people or strategy too early. First impressions are overwhelmingly powerful—and can be dead wrong. We all know people who come on strong at first, making terrific impressions. But after a few conversations, it can become clear that their first impression is their best impression, while the quiet types can grow on you.
Allow people to opt out of the turn-around with dignity, and be generous with them. Turn-arounds are hard, and they are exhausting. And if you’re taking over mid-way through, the existing team has likely already been through a tough slog. While you may want to hold onto every last one of them – and while you might not like the optics of one of your management team leaving – giving them the opportunity to do so, with grace, builds a much stronger team in the medium- to long-term.
Build teams that are a good mix of old and new. You see it again and again: a new CEO brings in “his” (or “her”) team: the people who have worked with him for years at the “old shop,” the ones he can count on, the ones who think like he thinks. And it may well be that these are, person by person, the best people; chances are, however, that they are not the best team. A great team is a mix of those who know the company inside and out, as well as those who bring a fresh perspective. There is little that’s additive about a bunch of people who share the same background and experiences.
When you are ready to move, move quickly. My rule of thumb is to hold off on major decisions for a couple of months, if you are able to. And then when it’s time to move, move quickly, making as many major announcements as possible at once. That way, the Band Aid is pulled off and you can invite people to get back to work without the tension that another announcement might be on the way.
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