Mon, Feb 20, 2017
The hired gun CEO for a turnaround has found the situation far worse than as presented by the owners: a factory with old gear and too many legacy systems which were kluges, no documentation, a poor work ethic, a climate of fear suppressing transparency, a business model increasingly out of date with growing customers, competition technologically advantaged in the space and more.
ADMITTING MISTAKES IS ONE THING, MARINATING IN SELF-BLAME?
After more than a year of hard work, the CEO (we will call him Sam) feels depressed. There is still a long way to go to stop customer attrition completely, systems are still in transition, there are still too many defects in output, people are working harder but still not sure the company will win the battle in the marketplace, the owners are distressed that earnings are still below both original expectations and an adjusted target. And more.
Sam blames himself. He waited too long to replace a toxic direct report, too long to replace weak managers, trusted a technical person with a project past the time when warning signs of late and problematic completion became evident despite his attempts to avoid disclosure. And Sam feels bad he did not make the call earlier to change the strategy from aspiring to lead with technology to leading with operational excellence and service – the first path being a driver of considerable pain and cost with little chance of success. Sam hates going to work. Interactions with the owners have been difficult – even they are not sure what to do. Sam has moments when he has wondered if it would be better to throw in the towel.
THE WAY FORWARD
Asked what he had accomplished, Sam recited:
- Reduced the defect rate in the factory
- More than replaced lost customers with new customers
- Shifting of the mix of customers to ones who could be better-served
- Successfully arguing with the owners to shift the strategy to manufacturig excellence and customer service instead of technology
- Bringing in a team to fix the systems
- Replacing key leaders in the company
- Re-chartering the sales force
- All the while, with considerable earnings notwithstanding below unattainable budgets (the company did not lose money despite the troubles)
All of this while handling significant issues at home.
Is there not a new narrative being created, Sam was asked? Could anyone else in the situation have created this new narrative? Has the old negative narrative been visible to the workforce and to the owners? Is it time to articulate the new narrative and direction every day to everyone? And to “sell” it if need be? What is the job of the CEO anyway? And what will result from success with this narrative: better effort by all? More resources from the owners? It is at least worthy a serious try.
It is still early, but Sam has been living in the new narrative for awhile. He has returned to his previously successful energy level, confidence, persistence and ability to mobilize others to get things done.
As presented in The Art of Possibility by Zander, “It’s all invented.” Your interpretation of events is what matters and your attitude toward what is possible.
As presented in Mastering Leadership, by Anderson and Adams, the CEO has two jobs from the get-go to the departure: self-development and company development; leading oneself and leading others.
I gave copies of the first book to each member of my Vistage CEO Peer Advisory Board. Vistage is a trove or resources for leaders:
Peter Schwartz, a best practices chair at Vistage led an inspiring conference workshop based on the second book. Both arre very good books on leadership perspective well worth the effort of reading.
That’s just my view. What’s yours?