Lose weight. Exercise more. The new year’s resolutions are in full gear right now. Whether it’s getting to the gym, reading more, or eating more greens, January usually begins with a reflection of how we did and what we can do more, better, faster this year.
We focus so much on being proactive in our health and personal care. But what about our business health? Is it just business as usual, again? Or do we have bigger business goals for 2019?
Talking to company owners and investors over the years, we have discovered a lot less proactivity than you’d expect and a lot more complacency. We don’t mean activity – everyone has lots of to-do lists – where busy work mask over big or growing problems.
We often get calls when the house is on fire: cash is draining away from the business, employees are jumping ship, frustrations are mounting, or lack of fresh thinking, innovation and true leadership have led to stagnation in the market. Owners say to us my ‘business is failing, what do I do’.
It’s hard not to think how many sleepless nights could have been avoided for an owner if they would have just acted sooner. We mean solve the issues not just by trying to dive in themselves or harangue the management team more, but instead through resources or tools that could extend their capabilities and help make vision a reality.
No organization is immune to challenges, not if it has any ambition. But how do we as owners and leaders put our strategy hat on to see down the road, or attempt to see, to predict where markets will go, how customers will act and react? To play the great game of chess in the real world – which is strategy.
Sometimes that is easier said than done. The eloquent Mike Tyson put it so well when he said, “everybody has a plan until I punch them in the mouth.” We would do well to remember how limited our brilliant strategies in fact are, how fragile in the face of ambiguity, uncertainty and future black swan events.
Just look to history to see how companies have been blindsided with the punch they never saw coming. Kodak invented the first digital camera in 1975, but put launch on hold in fear of cannibalizing their film business. We all know the story from there….Kodak who? Or take Blockbuster – which failed to pivot when Netflix showed up. And then Borders and Barnes & Noble, crushed under the Amazon onslaught. And the examples of business strategy gone wrong go on…
The best, truest, and most bleak line I’ve heard from a mega-successful company founder was Dave Becker telling me: “we have all had the sleepless nights, when it’s 2am and you’re staring at the ceiling.” Dave is the founder of a number of companies including First Internet Bancorp (Nasdaq: INBK), the granddaddy of online banking.
From the outside, we see a successful entrepreneur with multiple home runs and think they must be sitting on easy street. What could possibly go wrong?
The answer is: everything. It always appears easy or obvious once a company has made it, but what we often don’t hear about are the trials and tribulations that happen at every stage of a company’s growth from young and unknown, to in between, and then big and ambitious. The sleepless nights. The questions of can you make payroll. The we-almost-went-bankrupt moments. This is real and it’s no surprise that many of our inquiries for help from owners show up in our inbox after the 9-5 employees have gone home.
Like a good spy movie, turnarounds used to center around a strong central figure making things happen. Turnaround stars and distress experts were born, like Stephen Cooper of Enron and Krispy Kreme fame.
In 1985 the Turnaround Management Association started as a conference of company turnaround specialists in Chapel Hill, ultimately creating a rigorous formal program and exam for Certified Turnaround Professionals.
“Back then the time frame for turnarounds was long,” Richard Lindenmuth, an executive who has completed 23 turnarounds over the years said. “There was bridge financing from banks that would facilitate a turnaround and bankruptcy was really used as a tool for restructuring a company.”
Times have changed. Many of the Fortune 500 companies from those days have merged or disappeared due to outdated technology, products, or services (think RCA, Blackberry, Zenith). At the same time, the way to turn around a struggling business has transformed, being driven by several factors:
Congratulations to InterimExecs RED Team members Damon Neth, Bill Mince, and Jim Treleaven on the publishing of their new book, X-Formation. Damon, Bill and Jim made a conversation we had a few years back into a reality, combining their expertise to create the comprehensive book on the unique makeup of interim leaders and how they transform companies and bring incredible results to organizations worldwide.
The InterimExecs team added insights on finding, assessing, and engaging interim executives, drawing from years of matching companies with interim leadership. Check out X-Formation on Amazon here: http://a.co/3S42UdS!
Corporations know that innovation is key to their continued growth, but what happens when serious product or service reengineering is not within the organization’s DNA? What if the company is just too successful or set in their traditional world?
That is exactly what happened when a multi-billion dollar construction company came to us with a software division they had launched internally. While the company was superb at architecting, planning, engineering and building major construction projects, developing software was a new ball game.
Non-Profit, Vision Share, is the consortium of eye banks that banded together in 1998 to get corneas ready for transplant, into the hands of surgeons around the globe. With 18 eye banks, the consortium provides a space to share best practices, help advance innovation and technology, and pool resources to reach surgeons fast.
After having a full-time CEO on board for two years, the board determined they were not getting the results they were looking for.
Everything seemed to be going well for a public software company. Growing at a rate of 50-100% for three years straight, the company was gaining momentum until one day it all came to a screeching halt. Just weeks before the annual 10-k report was due the board uncovered that the CEO and CFO had been taking a few too many creative liberties with expense reports and were stealing money from the company…yes, they were embezzling funds – a nightmare scenario for a public company.
The board went to work, firing both of the full-time executives for cause. They immediately appointed an Interim CEO and reached out to us at InterimExecs to bring in an Interim CFO to help them navigate through murky waters.
“It was a full-fledged crisis that included issues with culture, staff, investors, analysts, debt holders, Board members, auditors, the SEC and activist shareholders,” said a board member.
In the Computerworld article “The latest in IT services? CIO hired guns“, Robert Jordan, CEO of the Association of Interim Executives explained to Computerworld that interim executives are responsible for “hiring, firing and making decisions”.
Thank you to RED Team members, Damon Neth and Dean Samuels, who also provided great insights. Dean Samuels, Interim CIO, said “This is exactly what the future is. We’ve gone from an IT asset portfolio to an IT service portfolio. So if IT has transformed into a services portfolio, why wouldn’t you get an IT service-oriented CIO as a service?”
Interim CIO, Damon Neth explained the honesty that comes with interim executives adding “I have no problem selling unpopular messages if I believe that they’re right for the organization or addressing the elephant in the room.”
First-year Change Agent members have access to the Interim Institute’s 4 hour audio program on the Fundamentals of Interim Management, and a one-hour strategy session to help jumpstart their interim career.
*$200 additional charge for Accelerator Program only applies for first-year members. After the first year, membership renews at $485/year.