Turnaround Management - 3 Methods to Sustain the Turnaround

The most critical asset to any company are the people. The people own the skill sets and the relationships within the industry that generate the value that the company provides to its customers. Employee turnover creates a huge impact to the current operations and adds an additional risk to the turnaround success. Addressing this risk during the turnaround period coupled with a clear change management communications plan is what provides the sustaining effort after the company rises from the turnaround.

Drastic management decisions during a turnaround leads to cost cutting, process change, and removal of underperformance. During a major turnaround activity a company can suffer damage to their existing workforce. People are creatures of habit, good or bad, and they do not react well to change. Despite well designed and implemented change management communication plans, the absolute reengineering of the way the company had operated in the past has a tremendous impact to the employee base that continuous communications of progress cannot sustain alone.

Here are 3 methods that can help the organization grow and sustain the turnaround progress:

  1. Re-brand your company: actively get into the community and re-brand your newly striving company. Employee brand is critical and the continuous communication internal and external about the company is critical to generating a new reputation.
  2. Focus on the employee: training, supporting associations, looking at your benefits and incentives, and generating positive messaging through management by walking are some great starting points.

  3. Continue to hire new blood: new employees bring innovative thinking, new ways of doing things, new experiences, and most importantly they have zero baggage from the past when the company was distressed. Mixing these people with the current employee base is refreshing for the organization.

Let us know what other method you have successfully implemented during this sustaining period?

Keith R. Szewczyk

Global High Tech Executive, GM, Entrepreneurial Leader – Strategic Vision, Process Improvement, P&L, PLM, Sales Growth

5 Actions to Keep Innovation Growing During a Turnaround

First step of any turnaround endeavor, the management team must determine if the company is able to strive and grow after the turnaround is successfully completed. Is there a growing market that the core products and services can regain and sustain profitability? Does the company have the key skill sets and core competencies to innovate in the new or existing growing marketplace?

There are many different details on why a distressed company finds them self in trouble. One common issue is that the company is spending more than they are generating. Financial stability is often impacted by loss of focus on execution and developing the right products or services. Company leadership within a turnaround must look at there spend and determine what programs need to be terminated. This cost cutting exercise is a must, but be careful on how you do it.

My number 1 objective during a turnaround is to control cost and never impact innovation, which  is the key lever to growth. Here are 5 actions to growing the business during a turnaround:

  1.  Financial Modeling and Measurement: It is absolutely critical to visit the cost structure of the organization and define a cost model that allows the organization to be measured for performance. Simplify the cost model and be consistent in your measurements. It is critical to have a consistent score card throughout your turnaround in order to see success.
  2. Process Simplification: Study your processes and recognize the complex areas that need to be changed. Champion teams and empower them to rethink the way the operation is executing today. Define a framework of how management wants the organization to operate, and allow your change agents to define the "how". Develop Functional Process Groups (FPG) to lead this effort and to maintain continuous process improvement efforts.
  3. Lean the Execution Structute: Flatten down the organization, and remove the hierarchical silos within your organization. Teach the organization to be lean and to leverage teamwork to execute more efficiently. Hold the organization accountable to commitments and empower the organization with a clear vision and strategy from the management. Inefficiencies are created within the layers, so reduce them and remove your teams roadblocks to success.
  4. Focus on Operational Excellence: Define the critical activities that are customer committed and establish a focus on execution by assigning these tasks to upcoming leaders within the organization. Focus 80% of your organization on the turnaround and focus 20% of the top talents and industry experts on innovation. Allow the innovation teams to not get dragged into the turnaround and empower them to focus on standardizing platforms and rapid prototyping of products and/or services. Stop the bleeding while setting up the future. 
  5. Develop Human Capital: Focus on developing the core competencies and leadership within your organization. Remove the resources who are a non-fit, and mentor your junior talent. Empower your top talents and industry experts to help with the turnaround and growth. Focus on what is core to your business and leverage outside help for non-core needs. Streamline your operations for flexibility and growth.

In turnarounds that I have lead, these 5 critical actions are the basis of keeping the innovation engine in motion. It is important to not only stabilize the organization during a turnaround, in parallel overdrive the innovation machine to achieve business growth. 

What actions have I missed?  

Keith R. Szewczyk

Global High Tech Executive, GM, Entrepreneurial Leader – Strategic Vision, Process Improvement, P&L, PLM, Sales Growth

3 Critical Steps to Capture Knowledge

Knowledge management is an absolute challenge for today's leaders, and must be put on the top of their to-do list. With the Baby Boomers starting their exit from the workforce, the knowledge drain will create issues for companies. There is a big trend of startup techniques and lean short cycle development efforts ongoing today, however companies must capture their core knowledge to gain a competitive advantage. Our job as a leader is to leverage this trend, but do so without losing core business knowledge.

With the use of technology and leveraging lean startup techniques, Knowledge Management (KM) systems will provide us with a faster path to innovation within our established industries. KM is the key to the company’s execution engine. The proper capturing process and tools will allow the organization to:

  • Maximize reuse
  •  Improve the value added to the customer
  • Grow knowledgeable resources
  • Innovate faster
  • Increase efficiencies
  • Lower cost
  • Improve quality
  • Reduce risk.

If your organization executes by heroics, or in other words counts on particular resources with all the knowledge, you must change this environment. This change is very difficult as your resources with all the knowledge will protect this knowledge in fear of losing their leverage. Therefore, communicate to the organization to remove the anxiety about knowledge capturing. It is very important to change the way knowledge in managed so the expertise within the Baby Boomer population is secured for future needs. Here are three critical steps to attack KM:

  1. Re-engineer your process to focuses on documenting this knowledge every step of the way through the lifecycle of the project. Your goal must be to stabilize the process and deploy tools that standardize the capturing, facilitates the process, and manages the data. Cloud computing creates the environment for rapid development and sharing of critical knowledge, where rapid development needs rapid knowledge at our fingertips. 
  2. Empower your less experienced resources to capture the knowledge. Assign these resources to projects with the senior resources and allow them to do the documenting. They will provide great details within their documentation due to the lack of domain knowledge, and they learn from the senior resources and gain experience. This important step begins the transformation of KM. 
  3. Communicate, communicate, communicate! Communicate the importance of process and KM to the organization. Explain to the senior resources with all the knowledge that you do not want them doing the low value activities that come with not sharing the knowledge, but instead you would rather use them in a high value situation defining the high level solutions without implementing and adding low value. However, you need them to capture all their knowledge.

The exit of the Baby Boomers, which makes up the majority of the senior resources, is a critical piece of business today. The transformation of technology and resource skill sets allow us as an organization to gain advantages if we capture the core knowledge that provides value to our customers. A KM process is something that all leaders today should take advantage of. Most importantly we must stick with KM and lean development techniques as time will provide a competitive advantage and growth! 

What other critical steps do you feel we must take to capture knowledge? 

Keith R. Szewczyk

Global High Tech Executive, GM, Entrepreneurial Leader – Strategic Vision, Process Improvement, P&L, PLM, Sales Growth

Growth Starts with Delivering on Commitments

As a TrepExec leader my management mantra is very simple “Continuous performance, continuous change and continuous growth”. This simple but powerful model is the center of success, where each pillar builds off each other. Performance creates credibility, credibility generates change that creates the competitive advantage, and competitive advantages generate growth opportunities.

Performance is a powerful tool for any leader and/or company. The power that a leader gains within their leadership role is generated from the success of delivering on commitments. Forget about all the great ideas or innovations that were already deployed. If we do not deliver on our commitments a perception of weakness will start to overcome our ability to achieve our vision.

Like with anything in life, balance is an absolute if we want to maximize our fulfillment of success. One extreme side of performance management is to micromanage every activity and force commitments to be met no matter what. This will only last for a short period of time and then our leadership aptitude will be compromised to the point of unbalanced control and loss of the organizational support. The other side of the extreme is a very lose environment of accountability for agreed to commitments. If we as leaders do not have the capability to create a culture of accountability, eventually our leadership weakness will be exposed through the company’s bottom line performance…loss of profitability!

Starting with our vision and strategy, the organizational structure must be designed to maximize the success. Striking the balance of both extremes will yield a level of performance that is demanded by each individual themselves within the organization. No matter how low within the organization they are. The following are some steps that may help in generating the culture of accountability and delivering of commitments:

  • Communicate the company’s vision and strategy. It all starts with the leader of the company continuously defining a vision so colorful that everyone internalizes it as achievable. Once the vision is felt and the people believe, then the company has a very powerful engine to deliver on almost any challenge. Remember there is a way to communicate a message and way to communicate a vision…successful leaders deliver comprehensible visions.
  • Communicate to our change agents and critics often. It is very critical that we identify our change agents and our critics. Messaging success stories and the vision to our change agents will add the motivating energy needed for them to continue their mission. Our number one challenge is to change our critics to change agents! Therefore, we will need to message to them continuously and keep them in our loop as much as we do with our change agents.
  • Clear lines of accountability are created by clear process. People are amazing, and their ability to work hard is natural as long as they feel they are adding value and not wasting their time. We, as a leader, must make sure that our company’s processes are not impacting or clouding our vision and strategy. It is critical that the level of accountability is transparent and not forced upon your workforce. Re-work your processes with the use of the people to generate an alignment to the vision and strategy. It is critical for our workforce to be involved in the re-engineering and continuous improvement activities to solidify the accountability within our organizations.

Most important…let our organizations innovate! Growth spawns from innovations that come from everywhere. Once we have the organization intuitively delivering on commitments and operating at a high level of performance, continuous change will boost the growth engine. Build a culture that understands that change is critical for success. Companies that understand the importance of change maximizes it growth opportunities and profitability. Profitability allows the company to reinvest into itself and its people. Once our organizations are delivering on commitments and embrace change the rewards are continuous and exciting! Remember to keep the balance…it is our job.

What extreme does your organization fall into today?

Keith R. Szewczyk

Global High Tech Executive, GM, Entrepreneurial Leader – Strategic Vision, Process Improvement, P&L, PLM, Sales Growth

Innovation Starts with Failure within the Correct Environment

The Silicon Valley mantra "fail often, fail fast" invigorates our entrepreneur souls as these well communicated success stories suggests that risk taking pays off big! As a TrepExec we understand the formula for success as demonstrated in these established startup communities like Silicon Valley and Boulder, CO. Before we blindly motivate our company's resources to take risk and fail often we must learn from these successful communities of why they succeed through failing and risk taking. We can learn from the following four core components and focus on these areas within our organizations:

  • Having the right talent
  • Diversity within the teams
  • Density of knowledge
  • Learn by doing

Having the right talent is the most important trait that can be linked to successful innovative organizations and successful startup communities. Talented engineers and business leaders visualize the solutions so clear in their minds that they understand how to define the right risks to take. A "failure" to this pool of resources are logical steps within their process of delivering that solution. Without talent driving your organization's innovation factory risk taking equals failures that lead to business decline and mediocracy.

Diversity within the teams creates a well structured environment geared for success. Cultural diversity develops the 360 degree viewpoint on all components being developed within our teams. Individuals from different countries bring to the table different learnings, different ways to solve problems because of their unique political and economic environmental situations, diverse educational systems, and the local markets they come from. Successful companies attract top diverse talent!

Density of knowledge is a key component of maximizing idea generation. Both successful companies and startup communities benefit from strong local ecosystems. Great minds tend to pool together and where there are great minds there are innovative ecosystems. A successful TrepExec recognizes that in order to successfully create that innovation factory they must be located where there are a large density of diverse talents.

Learn by doing is the last major component, and the most important. Once you have the company benefiting from a community with dense and diverse talents, then empowering these highly visionary teams to take risk and develop new products for the business becomes essential. These teams define iterative steps in their development lifecycle that allows them to learn by doing and take the risk that will cause them to fail fast. But only try this once you have successfully modeled these four major components.

It is very critical for us to examine our own organizational cultures to understand how these components create the successful innovation factory necessary to grow our businesses. How many of these components do you leverage within your innovation factory?

Keith R. Szewczyk

Global High Tech Executive, GM, Entrepreneurial Leader – Strategic Vision, Process Improvement, P&L, PLM, Sales Growth

Develop a Critical Thinking Workforce – Jumpstart Innovation

Globalization and technology is causing an increase in the tempo of business. This creates an environment where the employees must deal with a rapid pace of multifaceted information. Critical thinking skill sets are a must for all of the leadership roles within the company and is a bonus if the rest of the organization possesses these skill sets. Each project team must have leaders who have strong critical thinking abilities or risks will become true, issues will never be resolved and opportunities will be lost.

If you do not address critical thinking within your organization you will allow the accountability of all major decisions to flow to the top. This practice will cause the senior executive team to spend too much of their time micromanaging the companies every step, and not focusing on strategic objectives. Status quo behavior will stunt the company’s growth engine. The longer the critical thinking issue is ignored the more dependent the organization is on getting resolution to all issues from the top. Growth suffers, strategic objectives suffer, risk management suffers, creativity and innovation suffers, and market presence and opportunities suffer.

Not all answers and decisions are black and white. There are gray areas that create additional risks to be managed. You may have heard the saying that “the best decision is a decision”. 

How does an individual who has the ability to use critical thinking solve problems?

  • Being inquisitive and observant: The individual raises important questions to allow them to gather data about the issue. They collect relevant information that may not be easily obtained unless they have the ability to view the issue as an abstract environment. They attack the problem from multiple angles.
  • Evaluate a solution: The individual evaluates the data and tests the solutions. They can easily think through risk scenarios and possible new issues based upon their ability to use critical thinking and past experiences. In business, leaders who possess the ability to critically think can go through this process in their minds and come to solutions in a timely manner. Leaders who must continuously assess the answer in a mathematical or systematic paper exercise tend to lack this critical thinking ability.
  • Continuous evaluation of the results: During the decision making process explained above these individuals continuously assess the solution against their assumptions and alternative thoughts about the problem. They will continuously monitor abstract effects of the solution implemented and will know how to adjust on the fly.

Critical thinking is absolutely vital to the success of any company. If employees learn to apply critical thinking processes the business will inherently manage risk, issues and opportunities. This will leave the senior executives to deal with the major risks that impact the business as a larger system, deal with growing the organization (human and financial capital), and focus on reaching the company’s vision through strategy execution.

I am interested in hearing your thoughts about critical thinking and the impacts that the TrepExec has to think through as they utilize entrepreneurial processes. 

Keith R. Szewczyk

Global High Tech Executive, GM, Entrepreneurial Leader – Strategic Vision, Process Improvement, P&L, PLM, Sales Growth