It’s a very common situation. There’s usually one ringleader that’s hard to fire and getting rid of that person is essential to turning the company around.

You male a good point about autonomy and there’s a lot of truth to it. Unfortunately, it’s often out of your control. I’ve had the same situation. There’s a myth that internal conflict is good for a company so often this is something that’s done by the board on purpose.

- Greg

Great advice and having just come out of a turnaround situation, it’s the process and procedure part which is the easier part of the equation…!! we did turn the business around, at least in terms of it’s profitability, but the hardest part by far was the hostility of the “holdouts”.

The company was a small business in a group of companies with a group CEO; despite continued lobbying, the CEO wouldn’t fire the main holdout leader despite them having a very negative and destructive impact on the day-to-day business, due to a potential shortfall in revenue – in my opinion, a very short-sighted and mis-guided approach which will only lead to increased issues over time.

So, I would add a 6th point to your list that ‘you’ need to have complete autonomy to make decisions as you feel appropriate and MUST have the support of the snr. management (board, Grp CEO, Chairman…) in order to fully succeed.

Cheers,

J.

Unfortunately, I completely agree. You usually have to be a complete bastard at first. You’re not there to make friends. Most of the time, you can build up relationships later, but inevitably, some of the wounds never heal.

- Greg

from experience, legacy spells death. There are good reasons why the company you are dealing with has been in a position to ask for professional turn-around assistance. You can build only on solid foundations, not shaky grounds.

So make sure first that it’s not the business systems that were hampering people to perform.

If your analysis is that some people ought to go have them go. You have few shots with respect to the board. They have to be informed and they have to decide: either they follow your recommendation, and you’d better deliver, or they don’t, and they take responsibility.

Be prepared in any case. Have your suitcase ready, this gives you much more strength in defending your position.

best for 2010

That’s a tough one. I guess you just have to do your best to marginalize them.

- Greg

Great analogy!

I’ve run a business in the middle of a revolution, but never flown a plane (which for me, seems about right:-)

- Greg

Merry Christmass

Turnarounds remind me of when I was learning to fly as a teanager. When the (flight) plan breaks down and you have an emergency you must have a well practised alternative plan.

1st, Fly the plane. Reconfigure so you are flying (operating) most efficiently. Jettison dead weight, as it only brings you down faster. (No, you are not allowed to throw your mother-in-law out of an airplane) This buys time.

2nd, Diagnose the problem and try to affect a solution. (assuming the problem is not catastrophic and you have enough altitude/time)

3rd, Look for a place to land. (i.e. new strategy)

It seems to me that financial restructuring would be analogous to “fly the plane” while steps 1 through 4 fall into Diagnose/solution. Failure to have CEO/BOD total comittment is catastrophic.

Good advise and guidelines for affecting constructive change in an orgaization.

That is more of a restructuring question than a turnaround question, and I’m not an expert on restructuring.

However, I would say if the answer isn’t obvious from a financial point of view, you will need to form a consensus on what goes and what stays. Also, you need to be sure that you cut enough, so it’s a good idea to cut a little more than you think you have to.

Whatever you cut, you’re going to have to manage what is left.

- Greg