by Bob Gershberg, CEO/Managing Partner, Wray Executive Search
Most of us are not as good at turnaround as we’d like to think we are. I learned this myself during my operating years. I have since had the honor to work with and observe leaders who were nothing short of masterful at structuring and executing on exceedingly successful turnaround plans. There are common elements that merit study, reverence and application, if required.
There’s an old saying: “When you find yourself in a hole, the first step is to stop digging.” Taking the time to honestly and accurately assess your business, financing and resources can give you the perspective you need to decide if a turnaround is the right choice for your company. If your core business is viable, conduct a breakeven analysis using activity-based costing. Move to items or activities with measurable positive margin. Perform a four-wall analysis to determine which underperforming units or segments need to close or need immediate adjustment to remain open.
Get to cash flow neutrality soon, very soon. Preserve liquidity as best you can. Weekly cash flow forecast will help. The sale of non-core assets, if possible, can aid as well. As important as assessing your liquidity and financing resources, is making certain you have the right people on the bus. A disciplined turnaround team is essential in order to execute on critical policy and procedure changes. Tough decisions and constant evaluation are required.
Set a plan that is laser focused on a handful of major objectives that can be clearly articulated and executed expeditiously. By all means, stick to it. In order to lead a successful turnaround be engaged and accessible to all stakeholders. Even when the challenges seem insurmountable force yourself to engage, remembering you need the support and goodwill of your employees, customers and vendors.
Transparency and constant communication will build the credibility you need to climb the mountain. It will also keep the rumors and miscommunication, typical in periods of company viability uncertainty, to a minimum. It is imperative that you get the accurate message out. Be disciplined. Do not get distracted. Celebrate the milestones along the way. Be ready to scramble if need be. Never lose sight of the big picture. Execute, execute and execute again! There is light at the end of the tunnel!
And for those in the restaurant arena who think it cannot be done, just look at what Paul Murphy accomplished at Del Taco and subsequently at Noodles & Co. Marvel at what Phil Greifeld has done at Captain D’s. Paul Brown was brilliant at Arby’s and likely going to shine at BWW as well. Fasten your seatbelts as you observe Brian Niccol and Scott Boatwright piloting Chipotle to new heights!
All the best,
Bob Gershberg |CEO|Managing Partner|
(888) 875-9993 ext 102
Finding tomorrow’s leaders today!
If you enjoyed this article, please subscribe to Wray Executive Search Executive Connection. Our monthly publication includes industry news, executive movements and thought-provoking articles.