Congratulations! You’ve just been hired as CEO of a company in deep financial trouble. The ownership and board of directors have given you free reign to do your job, and you feel up to the task of leading the effort, but you have limited time to turn this ship around, and get it moving in a different more profitable direction.
What will be your plan starting Monday, your first day on the new job… the first month…the first six months. How will you evaluate and manage the company and its processes. How will you engage with the customers?
The strong arm style of leading some have used to turn the organization around is not the same style needed to manage an ascending company. Turnarounds are difficult, but they can be accomplished effectively using the right tools and processes. Starting with a dictatorial command and control style might be necessary for starters, but is not effective in the longer term. Your leadership style needs to quickly move from dictator towards a more benevolent style of leadership, where a culture of trust is forming and positive changes are seen.
The board has given you the authority to do the job, and along with it comes the power to do what you need to do. But you are not going to accomplish your objective without building influence within your organization. That will take some time. Ultimately, the CEO should never let go of the power and authority given to him/her by the board, but the critical aspect of influence is earned. If the influence is not earned, no authority or power will be effective in successful overall change.
Leading a turnaround is one of the most difficult challenges facing CEO’s in business. The problems inherited by the incoming CEO are usually much deeper than the story told by financial statements. Reading financial and other internal reports will give you a view of the outcome of a process. The turnaround is a complex and very delicate balance of the use of the CEO’s power, influence and authority.
Assembling a functional team that can work effectively together is an important first step. But so is evaluating everything in the value chain, including all processes, people, product, and most importantly the customer experience. Somehow the company lost its way, and you will need to direct the path to success. I have found it helpful when attempting to get the company moving in the right direction to organize my thinking and behavior around three critical areas that are interconnected. They are the organization’s Strategy, Structure, and Culture.