Inc. Article: 8 Reasons Flat Organizations Don’t Work, According to a Turnaround CEO

inc-logoThis article featuring Association of Interim Executives RED Team Member, Richard Lindenmuth, was originally posted on Inc.com.

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. Continue reading →

NPR Discusses the Rise of Interim CEOs

npr-logoIn 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.”

Listen to the Story: http://www.npr.org/2016/03/04/469149268/interim-ceos-passive-placeholders-or-rented-fixers 

5 Lessons to Inspire Your Business Growth Plans

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: Continue reading →

7 Turnaround Tips From an Interim CEO

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.

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How Businesses Can Counteract Stasis

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.

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The Downside of Management Consultants

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.

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Financial Weakness is a Symptom. Look to People and Leadership for the Cause.

40 years in public company management, merchant banking and entrepreneurship in multiple industries has left an indelible imprint on me. In the two dozen businesses that I have been involved with as owner, investor, operator or contractor, my belief is that businesses that seek outside help tend to focus on fixes for weaknesses in growth or profitability. Whether it be failing or non-existent cash flow, troubled industries, poor strategic fits, etc. my belief is that the damage was done far before the negative symptoms occurred. Operating and financial weaknesses are the symptoms of the larger illness.

The root cause is always about two factors: people and leadership. A leader creates the culture for his company and that culture is palpable at every level of involvement including the C-suite, middle management, rank and file, customers and suppliers.

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Raising Money In Tough Times: Easier Than You May Think

I have yet to enter a turnaround situation that I didn’t hear the owner or CEO or the board say that the answer to all of their problems is more money. While in some cases this is a real need, it is seldom the systemic problem within the company. Chances are that they have some work to do. Needing ‘dollars’ is one thing … being ready to raise ‘dollars’ is another.

There is an abundance of funding available in the marketplace for good deals. The key wording in this statement is of course “good deals.” When a company is in trouble rarely is it considered a good deal without some fixing.

Don’t be surprised when you come to the realization that the company isn’t attractive to investors or lenders. This means that you have the opportunity to rebuild the company, or parts of it, so that it can be considered a “good deal.” Build a company that investors want to invest in.

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The Speech All New CEOs Should Give

I once took one of those business simulation courses. In it, we were given a computer terminal, an inbox, and a walkie-talkie. Our simulated company, Acme Widget, was said to be in trouble, and the point of the exercise was to evaluate our crisis management skills. There was a team of psychologists who were looking for leadership and other soft skills that might help us do well during a pressure-filled day.

The fellow who had been chosen as simulated CEO of our team was an up-and-coming executive in a Fortune 100 company. He was clearly acting as CEO in the exercise because his company had indicated he had so much potential.

The psychologists asked the “CEO” to give his motivational speech as the simulation began.

The CEO said, “Our job is to grow revenue faster than expense. Now get to work!”

That was it.

Would it surprise you to hear that Acme Widgets did not survive the simulated crisis? The emails flew, the disasters proliferated, and the team fell apart. I thought then, and I still believe, that the CEO’s speech could have made a big difference in how our team performed.

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