After two years of unrelenting decline and $6M in losses, the owners of Styrotek, a packaging manufacturer for table grapes decided they needed to bring in outside help to turn things around.
Styrotek was founded in 1973 by a group of grape growers who came together to produce boxes for their farming operations in the central valley of California. While manufacturing was not originally in the company DNA, the business got to the point of creating a consistent product and quickly grew along with the grape industry.
That was until 2014 when things started to go sideways. “The company was somewhat in disarray,” Chris Caratan, one of the owner’s of Styrotek said. “Our management team at the time was not working up to par and there were some surprises in year-end numbers.”
Failure can be very entertaining – when it hits someone else. For company leaders, failure is to be avoided at all costs.
And yet, so many company builders report that their success was achieved after a spectacular failure. You would think this leads to a lifelong lesson to embrace setbacks, but for most it doesn’t. We seem to be hardwired to avoid failure.
When InterimExecs sent in RED Team member and Interim CEO, Michelle Barnes, into the Tourette Association of America, the organization was in a state of flux. The CEO had exited, staff was demoralized, the office was in a bit of chaos, and everyone was questioning what the future would look like.
Interim executives, or interims, have recently become an important tool that organizations can use to effectively address a variety of pressing needs. Having said that, many companies are either unaware that interims are even available or appropriate for their current situation. The most common understanding of the role of an interim is to fill an immediate need in the executive team caused by a sudden voluntary or involuntary departure. In this case, a seasoned executive can step right in and allow the company to progress unabated. While much of what an interim does is similar to consulting, successful execution is critical and unique to the role of interims. This blog presents seven case studies to help companies better understand other instances where interims can help. There are certainly more examples, but these are representative. While seven represents everything from the apocalypse to luck in gambling, we’ll stick with seven.
You’ve heard a lot about the benefits of non-hierarchical organizations, from Morning Star Tomatoes to Zappo’s to the David Allen Company. And you likely know by now that while a flat organization is an appealing concept, some companies have backed away from a flat structure or reported that they can be tricky to get right.
Or maybe they just don’t work at all. That’s the opinion of Richard Lindenmuth, who for 30 years has served as an interim CEO, and works with the Association of Interim Executives. One of his most recent tasks was turning around the troubled company Styrotek. He achieved this goal in large part by un-flattening its previously flat management structure and was able to return Styrotek to profitability in three months — even though it was affected by the California drought.
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.”
Despite the bitter Chicago cold, wind, ice, and snow (sounds appealing doesn’t it!?), there is something energizing about this time of year. January is a fresh start. A blank slate. But also a time to apply lessons learned. It’s easy to jump back into the daily grind without first reflecting on what actually happened the previous year to set a strong foundation for growth in the year ahead.
There were a lot of moving parts that made up our year at the Association of Interim Executives. Thousands of conversations with owners and executives, further development of the Rapid Executive Deployment program, our first interim executive annual conference and more. While those developments were visible signs of progress, there were underlying themes that helped serve as a driving force.
Here are 5 things I learned from owners, entrepreneurs and other brilliant minds:
I’ve done it for three decades, turning around companies from agriculture (such as Styrotek) to telecommunications giants (such as ITT). As interim leader, I have to parachute in, quickly gain trust and respect from all levels, determine a course of action, and unite everyone to stay that course—all within a limited timeframe.
It takes leadership strategies far beyond business and managerial chops, though certainly those are necessary. You can’t lead effectively without a connection to the people in the company; emotional intelligence is a must. Think of it as ‘strategic empathy’—being sincerely focused on the individual, but always with the big picture top of mind.
Whether you are an interim or a permanent CEO, these 7 tips for using strategic empathy bear relevance for anyone in a leading role.
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
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.
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.