Being tasked with turnarounds is a daunting task, but careful observations and a keen sense of intuition can help CEOs tackle the root cause successfully.
When organizational growth stagnates and prospects decline, company boards might bring in new talent to revamp the company’s trajectory. For the new CEO brought in to turn things around, it might seem a daunting task: conflicting opinions, time pressures, and a lack of background info are all challenges the new CEO must overcome. The first step in going forward? Establish a clear root cause.
To understand what goes through a CEO’s mind during a turnaround, SBI organized a discussion with David Ratner, CEO of HYAS, about his experience leading companies through challenging circumstances and what CEOs should consider if called upon to do the same.
From Top to Bottom: Getting the Big Picture
As the CEO leading the turnaround, intuition is everything. An effective root-cause analysis can only originate from a clear understanding of the components that make up the organization, and leaders should seek to embed themselves deeply into the organization before initiating any solutions.
The process of gathering information can be challenging, there is an overwhelming amount of information that CEOs have to sift through to identify insights that could help them. David advises leaders to keep their ear on the ground: attend internal and external meetings, convene with managers, and observe day-to-day operations. Using data that is relevant and timely, CEOs would be greatly helped by these insights to form the big picture and identify solutions to the root cause.
However, CEOs also face several pitfalls that could undermine their efforts. One of which is complacency: leaders should avoid the mistake of using old methods to address new symptoms. Instead, consider that despite similarities, each organization is a new body with its own set of strengths and weaknesses, and solutions should be tailored to their unique circumstances.
In the process of learning about the organization, many parties will also offer their opinion on why the company is facing its challenges. With so many differing views on the situation, David proposes that leaders take these comments with a grain of salt, as they typically reflect symptoms of the root cause.
Crucially, CEOs should seek to identify the last roadblock in their path to turnaround: internal resistance. Not everyone will be on board with your decisions, and they might withhold vital information that could lead you to the right direction. This is where the leader’s intuition will come in handy: observe carefully and listen close, and you will identify what you need to create success.