Recruit a leader experienced in turnarounds if no one in the existing structure is capable.

Forge consensus through a series of executive retreats with the current company management and the BOD.

A strong leader able to communicate an exciting vision of the future is needed to rally the troops and give the organization something to focus on in building a pathway to success.

Best of luck with your challenge.

Gerry.

posted February 18, 2008

Unless you have some magic and can pull something from nothing, my thought is that you have to work with what you have. In other words, you have to work with the remaining leadership that is in place and in lieu of creating a vision for the future, you have to create a semblance of a foundation for the present.

The only folks that can make a difference in times like this are the ones that people look to for their hope, confidence, etc.... Pull those folks together, ask them the same question and lead them to the answers that everyone can own and execute.

In my opinion, the only wrong thing that you can do in a situation like this is to do nothing or to wait. Not saying to give false hope, to lie or anything along those lines, but you have to communicate something even if the message is "we don't know anything at this point." The other point with that is that what you communicate HAS to be consistent.

It's a tough job to paddle a boat in a circle while you unstick the rudder and fix the motor. But at least when you are paddling, you don't lose any ground and you still feel in control of at least part of the process.

FWIW, the best way to eliminate or mitigate some of the disunity within the executives (outside of firing a few) is to pull them together for a purpose. Make the employees and the viability of a future for the company the focus. Those that jump on will be glad they did, those that don't will regret it in the long-run especially when they find out they are alone since the employees (yep, even their employees) have lined up behind the real leaders in the organization.

posted February 18, 2008

The key words are "loss of direction". Without a sense of direction, a vision and mission (or unifying goal) the organization's energy will be scattered. This will lead to confusion, negativity, disengagement and poor productivity. All of this will erode your bottom-line.

The first step is to gather the troops.

The next step is to involve them in developing the solution. Solicit their ideas for turning around both the people and the financial aspects of the business. Get them involved in developing a new "rallying cry" for the organization and the strategies/processes for answering the cry. When you involve the troops in the battle plan, they more readily get in step and execute the plan.

They need a sense of stability. Consistency can be the start. Until employees and executives feel and see the possibility of (and their ability to effect) consistent, beneficial cultural change, high turnover and poor fiscal performance will continue.

Current members of the organization have the opportunity to positively impact the organization's culture. Encourage the remaining executive team to dream of a better organization. Ask them what they'd like to see and how they think it can be achieved.

Here is the most critical aspect of this. The leader of the organization (current or future) must be in alignment with the newly developed culture. Otherwise, any culture change will be short-lived and future changes or intiatives will be embraced with skepticism, or not at all.

Likewise with the BOD. Current and incoming members must be in alignment with the newly created organizational culture. If not, they too will adversely affect the organization.

Now, everything feels "temporary", the executives, the BOD and probably many of the employees. Without a feeling of stability, people are uncommitted to the quality of their work, their jobs or the company. They have no anchor. Give a unifying vision/mission and you give them both direction and an anchor.

posted February 18, 2008

First of all, you give yourself credit for seeing and being able to articulate the situation- as well as some accountability to find a solution. Here are some thoughts based on your post:
A theme in responses so far has been to “gather the troops”. I agree, but in service to what? In an environment such as what you describe, surely not for the usual teambuilding or vision session. Facilitated sessions to let the leaders you have both vent and diagnose will help you identify those that can be re-engaged as well as shifting those who might otherwise be ready to bolt by re-engaging them. To be successful, all voices need to be represented and these sessions have to have room for people’s upset, without catering to it.

Sessions such as these will also provide rich opportunity to find the real time changes that can be made to stem the tide of disengagement. A future vision cannot take root if the soil is eroding faster than the roots take hold.

Second, and probably more important, I wonder what the organization has been ignoring or leaving unaddressed that led to this point. Generally if there is an exodus of senior talent, it is in response to something. What do they know that everyone else does not- or that everyone else chooses to ignore? Is the top officer a problem? Is the BOD disengaged or involved in a battle? IN my experience one of two situations is most likely true here: Either it is the Emporer’s New Clothes and you have no innocent youth to tell the boss/ Board what everyone knows; or, the market/ political circumstance is self sustaining and possibly unrecoverable.

You did not say in your posting- but there have to be reasons for a temporary BOD, a leadership exodus and financial upheaval. You can calm things cosmetically for a period by running tactical planning sessions and rallying the troops- but eventually you will have to ask harder questions.

Of course, I am biased, but I recommend you get someone involved immediately who is not ensnared in the current situation. You need someone from outside to be both objective and courageous enough to ask hard questions and facilitate the design of even harder solutions.

Good luck

posted February 18, 2008

The right people facing the truth…
You have managers and leaders, but you also have referents in your company.
Some of those referents are distinguished for their technical knowledge, some others for their organization knowledge and some others for being the listened person. All are important pieces for the resolution process, even the negatives ones.

Call them and board the same boat. Tell them the arising problems without hiding anything and try to look for a solution together.
This meeting will result not only in good ideas but also in the recognition of some problems sources that is 50% of the solution.

Regards

posted February 18, 2008

It highly depends on what you call "the issue"...
Having been there, I can make a list of what you cannot do - but that was not the quesion :)
I guess you should set some objectives which your department can handle by themselves + gather the positive people around a "survival schedule":
- in the former category I'd put objectives like helping people maintain their self esteem, dealing with stress, bonding at company level, presenting small & significant success stories of the company
- in the latter I'd say fall things such as maintaining focus on keeping client portfolio, stick to quality standards in routine work, prepare for company re-launch (when suppositely the new BOD will be able to provide direction)
Such objectives cannot be met unless you yourself believe in the potential future value of your company, and unless positive people gather around the hope of "rebirth"; what HR can do is "get on the floor" to the maximum, offer counselling & coaching services, offer small workshop interventions focusing on stress management skills, business ethics and all crisis-related issues. Perhaps most important for people is to be listened to at times like this, and HR is the place to go to get this, right?

-

posted February 18, 2008

Hard to know more details on the specifics unless you know you are transitioning from what to what ?.. Maybe this is connected to BOD transience & E level turnover? A change in ownership, takeover or merger maybe ?

Why is the BOD temporary ?, and what is the reason for the turnover at E Level ?...

IMHO you need to establish some stability... once a loss of confidence in the top begins to affect the troops, then they start heading for the exits too, and it sounds like this is starting to happen.

Anyway your first priority is to create some stability. I would formally appoint a transition BOD, for a specific period, with a specific mandate to steward the organization towards it’s new shape or focus, ( and yes you would have to know what that is ! ). You would need a 2-3 year timeframe. Next step would be to appoint an interim or transition CEO, with the specific objective of hold. In these things optics are sometimes more important that substance.. and of course the first acts of the CEO would be to define the transition plan, and start to recruit E or C level people to stabilize the organization at the next level down, and they can be transition too.

It’s fine to spell out that the structure is for a limited period only, until, the new direction and team are well established… a huge amount of time needs to be spent by the BOD and CEO in town hall type meetings, to communicate the situation, roll out the new direction, and start to generate confidence in the employees that the sky is not falling, the slide will be stopped, and ultimately reversed. Absolute honesty will be required about the reasons for the slide, and the actions that will be taken to turn the situation around.

You may also need some management team cleanup to replace the Chicken Little’s, although again I would want to understand why these behaviors are occurring, it may be that the dissenters have some real validity. maybe unresolved conflict or lack of consensus about the organizations future directions, or lack of ability in the previous team to reconcile differing viewpoints or concerns.... Your interim CEO would need to get her hands around that very quickly also.

Good luck with that..

posted February 18, 2008

Hi Don,

Tough one...! In this situation I would focus on two main issues: Stop the negativity and stop attrition. Of course they are related since when a negative situation has occurred the key people tend to leave AND when the key people leave a negative situation is amplified.

Since the key people are so visible in the organization I would initiate a program involving them in turning the negative situation into a positive situation. The program should include mentoring activities for the rest of the organization, involvement in providing information to their colleges, etc etc. They should possibly receive a fee for this which both is a compensation for this extra effort but also a fee, which is tied to not leaving the company within x months.

The second thing I would initiate is providing information to the organization about the progress. The information should be centered around the issues that tend to worry the people most, such as defining the future leadership when possible, successes in the market, and other issues that create a real impression of progress. Information level must NOT be too high flying. People expect information, which can be related to their personal situation.

Don'ts are creating activities, which are inconsistent with the company's situation, such as disproportionate partying. And don't provide information which is incorrect or has a risk of becoming incorrect, such as promising a change, which has a risk of not happening.

Expectations management is extremely important in this situation. You will never be able to mitigate wrong expectations, and therefore my third and last advise is to make sure that the HR department and the people dealing with providing information to the public are fully synchronized. Press releases are by nature 90% directed internally and only 10% externally and it is important that the press officers are not jeopardizing the situation further.

Rgds
Johnny

posted February 18, 2008

Don, I think transition is a kind way of putting it; incipient meltdown seems to fit the situation you describe. I agree with Ed on the need for a strong interim CEO to get things straight at executive level. Elsewhere I suggest that staff at every level should be encouraged to focus on specific tasks and targets, as short-term as necessary. This provides wins that can be celebrated, ups confidence, gives a sense of business carrying on (even if not necessarily as usual) and moves attention away from the happenings on the top floor. Everybody should have some immediate goals to shoot at, preferably with some good incentives for achieving them. Middle managers should understand that there is a real opportunity for them to show they're ready for higher positions - bringing good people up from inside sends out a strong positive signal. Keep the planning timeframe short (3 months, 6 months, a year max) and don't, in my opinion, talk about vision and mission at all at this stage: that's destabilising enough when things are going well, which they plainly aren't here. Do just talk, a lot, and listen a lot as well. Lots of people will keep quiet until they walk, so look for ways in which people can vent anxieties without it becoming a moan-fest. And somebody has got to say loud and clear pretty quickly "we're fixing this thing, and here's what you all have to do". I'd also suggest some fairly blunt talking to the "executive ranks"; it sounds as if too many people there are just ducking their responsibilties. How much of all that is down to the head of HR depends on the head of HR I guess. Good luck.

posted February 18, 2008

This sounds like one of those "opportunity in a crisis" moments. Take a leadership role in the organization. Establish a new vision for the company. Don't worry about titles and authority. It's better to beg forgiveness than to ask permission! Develop a new program, like Martijn Ras stated above. Tie that program into the new vision and get people motivated and working towards the goal. If you do this right, the BOD will move you into the CEO's office.

posted February 18, 2008

Cut straight to the chase. Pussyfooting will prolong the agony.
Put out adverts for a new CEO. Make it clear that the position involves challenges. BOD must appoint a PR agency to manage public relations. Do it now.
Insiders may know all about it but full story may not yet be in the public domain. Tackle the matter head on.

Look for an outsider CEO, you want decisive action not the reassurance of the "warm wet trouser pocket". Similarly, you do not want another crony retread, you want to break with the past and this is a golden opportunity to do so. Opportunities like this don't come along that often. Seize it.

The turmoil may instil anxious hand wringing amongst many, yet at the same time everything is now in play. Turn this to your advantage.
The petty fiefdoms and entrenched interests are off balance.
You may not get another chance to turn seeming defeat into total victory again.

The staff want to see someone at the helm who is boldly stepping up to the plate. They want to see the chain of command functioning again. They want to see an end to the dithering and hesitation.

A professional and accomplished CEO will bring this in and will be making visible moves and decisions within days of arriving. This alone will quickly restore some equilibrium and confidence.

The CEO will then start to operate off the front foot and some names will be taken and some A$$ will be kicked. That’s a good thing, the place needs a clean up.

Its up to the CEO what happens next. The BOD must bite the bullet
and accept they have lost control and bring in a CEO to turn a difficult situation around.

posted February 19, 2008

All of the suggestions above are excellent.

You may also consider reading a book like "Our Iceberg is Melting" by John P. Kotter.

posted February 19, 2008