Do Turnaround Leaders Need Vision?
Our last two weeks have been spent preparing to add to our growing portfolio through the acquisition of an operating business that we are purchasing out of Receivership.
Part of our preparation process includes one on one discussions with members of senior management, key customers and suppliers. Over and over, everyone asked the same question: What is your vision for the business?
Reasonable question. Should turnaround leaders have a vision ready to present to stakeholders? Is that the right pitch?
Sometimes, perhaps. And, in response, we could have spoken generically about the positives we see in the business and the industry and explain how we see our fit in the global supply chain and therefore why we’re interested in the acquisition.
But what a wasted opportunity that would have been. Better to focus on everyone’s lived truth; the stress, disappointment, frustration and fear that everyone is feeling. Better to start the turnaround right now.
Here was our answer:
Imagine you are a young adult, stricken with a serious disease, bedridden in hospital for months. What is your life vision? How would you answer that question?
Sure, you have hopes and dreams. But what you are most focused on right now is getting to tomorrow. And then to next week, next month, next year. Your dream is to become stable. In a business sense, to have a stable, reliable platform on which to grow.
My focus will be on changing culture, from secretive and authoritarian, to open and respectful team work.
My focus will be on changing culture, from deception, to integrity.
My focus will be to develop systems to yield perfect on-time deliveries and perfect quality.
All of that will take six to twelve months. When we are done, we will have a successful, profitable and stable business. And then we can talk about our broader vision from a baseline of winning momentum.
There is an obvious role for vision in business. But if you are a stakeholder of a troubled company, it is not grand vision that captures your imagination. Rather, it’s a tangible, open and honest plan to alleviate the fears and darkness of the present.
Anytime you find yourself or your management team pitching vision while in a crisis, you’re missing an opportunity to persuade. And you are probably making the crisis worse.
This was a thoughtful and thought-provoking article. I enjoyed it immensely and thank you for distributing it.
Peter Perley CPA,CA
As aTurnaround Guy, who has performed many successful business transformations, some through informal, CCAA, US Ch11, crossborder and global I will add this.
A Turnaround person must first assess the ability of the firm to survive, pay back the bank, settle aggrieved creditors, stakeholders, and restore credibility, transparency to all involved.
So it is not a grand vision, it is getting the teenager out of intensive care, stabilized and return to sustainable profitability backed by a realistic 100 day operational cashflow, and ongoing budgets compared to actual.
He/She also has to have trust and respect of the secured lenders, their advisors and settle issues around the boardroom table versus litigation. This is provided by concrete results, good/bad compared to Turnaround plan weekly, monthly, etc with full transparency.
In a Turnaround respect is gained on the basis of “Actions speak louder than words”
this is the the absolute foundation of success.
Thank you for a great article.