Turnaround leadership
Turnaround leadership tasks
A turnaround situation requires robust leadership to drive the turnaround process:
- Provide renewed energy, excitement, rigour, discipline, and urgency.
- Refocus the business around a compelling turnaround ambition, turnaround agenda and turnaround strategy.
- Form an effective leadership team.
- Implement management processes to support the turnaround programme e.g. rigorous performance management systems.
- Force a new mind set on the organisation.
- Provide stakeholders with comfort that things will change for the better.
Who should lead the turnaround?
The Board can address the turnaround leadership issue in a number of ways:
- Refocusing of the existing team under new leadership, perhaps with turnaround management consulting support.
- Retaining the existing team, but with extensive support from turnaround interim managers and turnaround management consultants.
Retaining existing management has the advantage of retaining knowledge of the company and the industry.
However, its is a generally accepted turnaround management principle that existing management should only be retained if not in crisis denial, if understanding the reality gap, if acutely aware of the causes of decline, and if determined to restore the company's performance.
Existing management, being often the architects of the distressed situation, is unlikely to succeed without new turnaround leadership or external support.
On their own, existing management is likely to focus on cash management and cost control, unlikely to change structures and strategy they put into place, and often represents the biggest obstacle themselves to effecting a successful turnaround.
On balance, the turnaround process is preferably led by someone with turnaround experience rather than an industry expert without such experience.
CRS Turnaround's role in turnaround leadership
We have in the past successfully supported newly appointed company leaders in a number of turnarounds.
The principle used is for the CEO to "lead from the front", while the CRS Turnaround team "leads from the back".
We have equally successfully led turnarounds as interim managers.
Such assignments typically included recruiting and grooming of successors.
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Turnaround leadership is normally the first enabler to be implemented in a turnaround.