Today companies operate in a complex global economy which is more diverse, connected by the Internet, and not very predictable. Many companies still pursue classic business approaches (inside-the-box thinking) with a focus on short-term results. Failure to focus on business improvement and adapting to the new business environment can cause many issues and eventually lead to delisting from a stock exchange, bankruptcy, or liquidation. How many of 1960’s “Fortune 500” companies still exist today?
What do Bill George (Medtronic), Meg Whitman (eBay), Bob Wright (NBC), Lou Gerstner (IBM), Larry Bossidy (Allied Signal), Ted Turner (CNN) and Howard Schultz (Starbucks) have in common?
They were all outstanding leaders who revolutionized their companies by applying outside experiences and viewing through different lenses. Unshackled by past memories or limited perspectives, their successes were a product of “what can be?” versus “what has happened?”
Does that mean industry experience is overrated? Not necessarily, but I believe a talented leader with an outside perspective, fresh eyes and an open mind will usually outperform an industry veteran when important change is needed. Why?
In a recent NPR story about the rising demand for interim executives, Association of Interim Executives CEO, Robert Jordan shares that a temporary CEO is not a babysitter, but rather a specialized surgeon. “It creates a bias in favor of action and against playing politics,” Robert said, then commenting that Interim CEOs are “trying to solve a problem and work themselves out of the job.”
Association RED Team Member and Interim CEO, Richard Lindenmuth, is also interviewed sharing about his turnaround of Styrotek, an agricultural packaging company in California that contacted the Association in the midst of a 3-month drought and big financial losses. Dick was able to parachute in as Interim CEO and get the company quickly back to profitability. He says “you really have to listen – the solutions are generally within the company.”
Over the years I’ve encountered far too many business owners who profess comfort with their current levels of revenue, service, culture and rightful place in society. When asked about growth plans, they offer some variation of the line “If I had any more business, I would lose the capability to service my existing business.”
I call that business situation, Stasis. Some of the definitions in Webster are:
• a state of static balance or equilibrium : stagnation
• a state or period of stability during which little or no evolutionary change occurs
For me, Stasis is synonymous with Disaster.
2015 has been an amazing year here at the Association of Interim Executives. We parachuted executives into companies worldwide and saw powerful collaboration taking place among the RED Team, an elite group of interims.
As we reflect on the past year, we are more confident than ever that together we can better the world by deploying great leadership. Please enjoy these 5 highlights from 2015.
We wish you a prosperous and peaceful 2016.
-The Association Team
UBS recently published an article that gave a good synopsis of what a restructuring entails, especially regarding public companies:
“A restructuring marks a challenging and sometimes disruptive time in the history of any corporation that has ever undertaken one. Managements rarely aspire to undergo a restructuring, but in some cases, it is the best path when a company has an urgent need to turn around its fortunes, improve its reputation, or restore its competitive position. The process can entail major changes in the organizational structure, staff, asset base/product line, or cost structure. History tells us that a positive outcome is not assured, as not all restructuring plans are carried out effectively.
A successful restructuring begins with a vision and an achievable strategy for implementation. A well-executed restructuring or turnaround can transform a company that is weighed down – by an inferior product line, a heavy debt burden, inefficient operations, or a damaged reputation – into a strong competitor with dramatically improved financial results.”
See the entire UBS article on restructuring and turnarounds here. The Association is home to top interim executives, many of whom specialize in providing the leadership to transform struggling companies.
On March 30, 2015, I began my tenure as an interim manager (Interim Chief Operating Officer) at ChildServ, a social services agency that had recently celebrated its 120th anniversary serving at-risk children and families in the Chicagoland area. While I was new to the role, I had the benefit of not being new to the organization. In fact, I had served on the Board of Trustees of ChildServ for the prior 15 months, resigning only after my Board colleagues had voted to have me take on the difficult task of driving badly needed change from within.
Many companies are starved for effective leadership, and as a result the demand for great interim executives who will come in and do the work is increasing. Consider this passage from the book Traction:
The inability to make a business vision a reality is epidemic. Consider it a new take on an old quote: Vision without traction is merely hallucination. All over the world, business consultants frequently conduct multiple-day strategic planning sessions and charge tens of thousands of dollars for teaching what is theoretically great material. The downside is that after making you feel warm and fuzzy about your direction, these same consultants rarely teach you how to bring your vision down to the ground and make it work in the real world.
We’ve been thinking recently about GT Dave, an entrepreneur who dropped out of high school and founded GT’s Kombucha at age 17. His parents swore by the health benefits of Kombucha tea and while GT’s homemade recipe was the foundation for a new company, what he actually did was create an entirely new category. GT Kombucha holds an estimated 60% of a $600M market, and it’s still growing strong.
Creating a new category requires two things above all else: an unwavering sense of mission, and devotion to quality. The challenge is that paving a new path does not always translate to instant success and understanding. At the Association of Interim Executives we believe in the power of interim executive management and have taken on a mission to be the voice of the specialty and to help companies around the globe succeed because of access to world class executive talent.