Anatomy of a Turnaround Executive
Unlike a competent executive who is managing a business in a growth market, the turnaround executive deals less in “science” and more in “art”. This exceptional individual is a strategist, entrepreneur, intuitive leader, coach, communicator, and driving-force that creates plans and executes them. He or she is the adhesive that bonds people into a team that takes-up the challenge/mission/vision and translates it into tangible reality. More than likely the corporation in trouble is in a mature market with formidable competitors.
A Company, even one with a long history of good performance, needs to introduce fresh management energy into its system to starve off the inexorable forces of decay. One way to think about turnarounds is as the antidote for corporate entropy. Entropy, of course, is a principle of physics that measures the disorder in a closed system. A derivative of the second law of thermodynamics, entropy says that everything that is organized will break down or run down unless it is maintained.
The wave of restructuring, spin-offs, mergers, and acquisitions are no fluke. That phenomenon states plainly that entropy in corporate America had reached an intolerably high level. As an article from Fortune indicated, “So far, the evidence overwhelmingly shows restructuring to be a powerful force for economic improvement despite its painful and regrettable human cost.”
In order to offer you some insight as to the turnaround process, the following represents a small portion of the activities being executed by the turnaround executive. Bare in mind that each turnaround has its own particular challenges, with the foregoing being the common anatomy:
l	All turnaround executives set new direction for their companies. They are the best of strategist precisely because they are suspicious of forecasts and open to surprise. They know the value of being prepared, and they also know that some of the most important strategic decisions they make are inherently unpredictable. They treat information as their main strategic advantage, and flexibility as their main strategic weapon. They assume opportunity will keep knocking, but it will knock softly and in unpredictable ways.
l	These executives treat everyone as a source of creative input. They cannot be described as either democratic or autocratic. They define boundaries and their people figure out the best way to do the job within those boundaries. Their leadership style is an astonishing combination of direction and empowerment. They give up a measure of control in order to gain control over what counts: RESULTS. They realize that when people are treated as the main engine rather than interchangeable parts of the corporate machine, motivation, creativity, quality, and commitment to implementation become the culture.
l	The turnaround executives treat facts as friends, and financial controls as liberating. They have a voracious hunger for facts. They see information where others see only data. They love comparisons, rankings, measurements, anything that provides context and removes decision-making from the realm of mere opinion. Meanwhile, they maintain tight, accurate, real-time financial controls. Their people don't regard financial controls as an imposition of autocracy, but as the benign checks and balances that allow them to be creative and free.
l	These executives know that habit breaking, the prerequisite for change and turnaround, needs more than a simple decision to do it. It takes motivation, desire, and will. Crisis can provide that, but the leaders of turnaround organizations seem to get their determination from their singular ability to anticipate crisis. They are leaders who listen. They are open, curious, and inquisitive. They get ideas from customers, suppliers, front-line employees, competitors, politicians--almost anyone outside the hierarchy.
l	The turnaround executive attacks backbiting politics, lack of teamwork, lack of shared business values, in order to create a culture that allows their management team to trust one another's agenda. They are relentless in fighting office politics and power contests and breaking down the we/they barriers that paralyze action. They are heroic leaders, but not Lone Rangers. They place little emphasis on charisma; rather, they are outstanding people supported by others with complementary skills. Unless the management vocabulary is enriched on the good and bad uses of power and politics, vacuums will be created then filled by idealistic people who can't get much done, and by manipulators who get themselves advanced but stand for nothing.
l	These executives are the driving force that creates competitive advantage. They realize that there is no magic pill a company can take to create strategic advantage in a maturing market. The challenge is to achieve superior performance relative to competitors in the "Key Factors for Success"of the business. At the same time, they must be sure that the strategy properly matches the strengths of the corporation with the needs of a clearly defined market. Positive matching of the needs and objectives of the two parties involved is required for a lasting good relationship; without it, long-term viability may be at stake.
l	They use visible management attention, rather than management exhortation, to get things done. Action may start with words, but it has to be backed by symbolic behavior that makes those words come alive. Attention makes a difference, and so do attitudes and expectations. These executives know that if they expect their people to do well, they probably will do well. Psychologists call it the Pygmalion effect. Executives who turnaround companies understand it.
l	The turnaround executives seem able to pick causes and communicate them in a way that conveys an element of risk and challenge--but not foolishly so. They constantly review their causes in light of the issues, major problems and opportunities that shift with time. They seem to turn tedious issues into noble causes. With effort, they do so in ways that enhance the dignity of the people they employ. Causes are one thing; commitment is another. Commitment is not something that emanates from management edict. Instead, it results from extensive communication and management's ability to turn grand causes into small actions so that people throughout the organization can contribute to the central purpose.
Crisis breeds opportunity. The turnaround is the opportunity that transforms crisis into issue, issue into cause, cause into quest. The complacent executive merely presides. The turnaround executive is engaged in a daily struggle to fight corporate entropy, to welcome change, to uproot habits, and to build a future for the customers, investors, and employees.

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