In the previous blog in this series, we focused on the cultural glue: speaking the hard truth, avoiding sugarcoating, and protecting the pillars of your organization. Those moves stabilize the team.
Now let’s talk about the street-fight reality of crisis, the need for a trusted consigliere, and why only great people and great optics give you a chance to land the plane safely.
Problem #9: It’s a Street Fight
The closer you get to bankruptcy, the greater the need to suspend the rules of the Marquess de Queensberry. This has turned into a street fight which means biting and well-aimed kicks to the groin are acceptable if it helps you realize your objective of survival. (I am only talking about stuff that is legal… There is never a justification for illegal.)
Vendors will not get paid, rent will be past due, the bank will not get their interest payment, employees who are terminated will receive minimal (if any) severance, purchase orders will get cancelled, long term contracts will be defaulted, payroll might be a few days late, bonuses will be terminated, inventory will be sold at discounts, Cap X shelved/suspended and sob stories in unlimited supply… And that is only a partial list of corrective actions that might be required to buy more oxygen (cash). Crises are brutal, messy and harsh. Unpopular decisions are the norm, not the exception. You will not win a popularity contest as the turnaround CEO… But if you do your job, you will save the business.
Problem #10: Find a Trusted Advisor/Helper
Since most businesses have an Owner who is also the CEO, firing yourself or bringing in a pro to execute the turnaround is unlikely. If you have never gone through a turnaround before, it is equally unlikely you possess the experience, skills or emotional fortitude to make the hard decisions, have the hard conversations, make tough calls and say the hard things.
Having an advisor or guide in your corner to be a sounding board, sanity check and “war time consigliere” to help you navigate this process is a great idea. It usually requires more than one set of eyes to minimize compounding the problems because excessive optimism, unexamined assumptions and ignored risks are frequently fatal scotomas of most leaders under extreme duress.
Bumper Sticker: My Idea + My Experience = Disaster
Problem #11: A Crappy Environment Requires Experts
Good times frequently mask average, weakness or incompetence. The harder the times, the more you will need great people to support the turnaround. The harder the times, the greater the need for “A” Players, precise data, optics, dashboards and metrics.
If a pilot is attempting to land a single engine Cessna 172 Skyhawk airplane in Lubbock, Texas on a perfectly calm, cloudless day in broad daylight and the airplane is functioning perfectly, you could be a rookie pilot on your first solo flight and probably land the plane with no problems. The conditions and visibility are perfect , no traffic to confuse or distract the pilot and she has plenty of runway to maneuver.
Contrast that scenario with a pilot attempting to land a crippled F-35 fighter jet on the deck of an aircraft carrier at midnight in the middle of a hurricane with cross winds of 150 knots, the lights on the aircraft carrier are out, the seas have 50 foot swells which toss the ship up and down and side to side like a toy boat. The landing gear is stuck in the up position, the plane’s one engine is sputtering and working sporadically and there is enough fuel for only one attempt to safely land the plane. If that pilot can successfully land that airplane on that aircraft carrier, the pilot has extreme capability and has one hell of a cockpit.
If the environment is perfect, an inexperienced pilot can look out the window and clearly see what needs to happen next. However, when the environment turns nasty and the aircraft malfunctions, the pilot will crash without expertise and a great cockpit/optics.
Although this analogy might lead you to believe I am referencing the need for a great leader, I have already made that point. The reality is that every member of the senior leadership team needs to be highly skilled to successfully land the plane. Furthermore, difficult times require precise optics, frequent measuring and reporting, robust data and constant communication. This is no different from what happens in a hospital emergency room. Lots of monitors, dials and alarms measuring in real time how the patient is doing. Any deviation from plan will start the alarm bells and signal the nurses.
Your success during difficult times will be greatly impacted by the quality of your team, the preciseness of your data and the frequency of measurement to see if the changes are working.
Ignore Problem #11 at your peril!
Bumper Sticker: Low visibility coupled with lousy data, weak dashboards and “C” players are an accident looking for a place to happen… And explains why most turnarounds don’t turn.
Summary
There is an enormous difference between a gym, a rehab facility, a hospital and an emergency room. Skill sets, intensity, leadership, focus, head space, objectives, priorities and time constraints are radically different. Understanding these differences is mandatory for executing a successful turnaround. If your business encounters a massive problem, preservation of cash is the key to buying the time to execute the “turn”. Without cash, a healthy dose of courage and an extreme level of intensity, the game is unwinnable.
