Leader

As a business and turn around consultant with over twenty years experience working with numerous small and medium size companies, business turnaround services are some of the favorite work I perform. I enjoy the challenge and helping a troubled company to succeed again. Unfortunately, sometimes the business owner comes to me too late, and the turnaround strategy turns into a cutting losses strategy, often ending in bankruptcy, restructuring, liquidation or a forced fire sale (quick sale). The best advice I can give business owners is to hire an experienced business consultant immediately, no matter the stage of company growth, economic situation or company health situation. A business consultant can proactively help head off future disaster, help to grow the business and provide essential strategic direction. A good business consultant can help a business develop and implement an effective business plan so that turnaround services are never needed.

The important parts of turnaround strategy development and deployment are leadership, experience and expertise. The success of a turnaround plan rests with the people on the turnaround team and their ability and willingness to incorporate all of the company’s management team and key employees in the process. It is important to have a process structure which can achieve this. As a business consultant, I understand process, but I also understand the importance of experience and fresh ideas in a turnaround situation. It is the expertise of an experienced consultant who can adapt process to a particular situation in order to find unique, creative, successful solutions to a tough situation, using the strengths and experience of the turnaround team and the insights of company managers and employees, finally putting it all together in an agreed upon, synergistic, effective turnaround strategy, plan and program.

The most important thing a business consultant should do upon entering a turnaround situation is to listen, get to know everyone throughout the organization and give them opportunities and avenues to communicate with the consultant and the CEO. The CEO should be doing the same exact thing alongside the business consultant to instill trust, integrity and openness to the turn around process. If the CEO does not hold a position of high esteem with the employees throughout the organization, it is time for him or her to go and be replaced by either a CEO who specializes in turnaround situations or promote someone from within that has this relationship with the company’s people and can adjust quickly to being an effective CEO. With this trust and integrity established, it is time to get to work.

Steps I take as a turnaround consultant include: learn about the business; meet with advisors, creditors, customers and suppliers; evaluate the problems and issues; identify the most pressing and significant problems; identify opportunities; analysis; resource audit; risk assessment; develop the turnaround solutions and the resulting business strategy; acquire and leverage needed resources; deploy with confidence; and obtain and distribute value.

If you follow a similar process and have strong leadership qualities and skills, then, more often than not, the turnaround plan will be successful. However, it isn’t always so; sometimes it is too little, too late, depending on the activity and stage of the dire situation. If that is the case, a major re-structuring, quick sale, bankruptcy, liquidation or other end result will become the end game. While this can leave a hollow feeling among the turnaround team, you will find that if a good turnaround process was developed and implemented, yet failed, employees and customers will understand. They will adapt and move on and so should you. Holding on to what „could be“ is toxic to any future career or new venture. While many may see this as failure and defeat, as a business consultant, I see this as a learning experience. Something which will not be revisited as owners and employees alike clearly understand, in the end, how they got there. The learning experience is invaluable and should be leveraged into many successes in the future. However, if you follow a good turnaround process, with an experienced turnaround team, the end result will very often lead to success and renewed future growth.

Frank-GoleyFrank Goley works for ABC Business Consulting. He is an expert business consultant, business planner and business turnaround consultant, helping companies to succeed for more than twenty years.

 

Dr. Markus Mueller am 25.04.2013 in Bonn

Telekom IT: More than Just an IT Service Provider

Mission possible: Dr. Markus Müller, CIO at Deutsche Telekom, must simultaneously raise the quality of IT, reduce the costs by one Billion euros, and deliver IT projects right on time – all by 2015. And he is well on his way.

I T operations at Deutsche Telekom were originally divided among three divisions. That changed in 2012. The corporation set up a  central IT department under the responsibility and leadership of a single unit, with unified objectives, a consistent portfolio, and low-cost production. The restructuring improved quality and reduced IT costs permanently. Telekom IT has a workforce of 7,300 employees today. Under the direction of CIO Markus Müller, it manages an IT budget of two Billion euros. The responsibility for CRM and billing systems which handle 250 million invoices a year and eleven million customer queries a month belongs to Telekom IT; it also operates the joint platform of the European Telekom subsidiaries and realizes substantial scaling effects. And Telekom IT has a challenging goal: the reduction of IT costs by one billion euros between 2012 and 2015, the improvement of IT quality, and the ontime delivery of IT projects.

At the same time, it must complete an important mission which has been designed to lay the foundation for implementation of the group’s strategy. Determined to make Telekom the “leading telco”, the division is using the broadband network gateway to provide the “IP production platform” for the mapping of new IP products in the architecture. This architecture secures the bundling of fixed and mobile networks. It creates a standardized “power strip” allowing the integration of attractive partner Services and products in the Deutsche Telekom product Portfolio and enables the integration of offers for business customers. The establishment of Telekom IT was desperately needed – and yet it required a massive effort. Dr. Markus Müller spoke to Detecon about the progress that has been made and the targets for the near future.

Download the full interview here:  8_DMR_blue_Transformation_Interview_Telekom_Mueller_E_02_2015

Mike

Welcome to the real business world where troubled businesses abound. Distressed business owners and executives need to understand turnarounds and transformations in order to face the challenges in this competitive global market. Corporate turnarounds and transformations are no longer ad hoc. Instead they have become an integral part of daily corporate life with dynamic changes in the economic, political and technological arenas. Business turbulence is here to stay. Yet, there are many myths pertaining to turnaround and transformation.

Myth 1: One common myth held by companies is that they are not vulnerable to financial crisis: „My company is doing well. It will not fall sick.“ Akin to getting AIDS, some patients previously adopted the attitude: „This will not happen to me.“ But when it does happen, be prepared to hear this from the doctor. „Sorry, we cannot help you.“ Many companies have annual medical examinations and health screenings for their employees but are negligent when it comes to their own check-ups. Companies should go for regular health check-up. The key to successful turnaround is early intervention and understand the early warning signs of a sick company.

Myth 2: Management of troubled companies often goes into a state of self-denial. „We have seen this before. This is a little hiccup in the economy and our business is seasonal. Nothing has gone wrong.“ This is a myth. The situation frequently gets worse before it gets better. Such denial is insidious, resulting in delays in the necessary remedial actions during the early stage of under-performance. This is why oftentimes by the time the companies‘ woes are publicly known, they are already basket cases. Proper treatment can only be administered after the acknowledgement that there is pain.

Myth 3: „Our creditors and banks are chasing for payments, we have a credit squeeze and firing of our staff must continue till cash flow improves.“ Yes, troubled companies need to cut cost to the bones without injuring the muscles and the vital organs. However, it is a myth that the primary role of a turnaround manager is merely to be ruthless and fire people in order to reduce overheads. Downsizing is like amputation which has negative side effects and can further worsen the staff morale.

Myth 4: You may be the lucky one as your company is not in the critical life-and-death situation but merely seeking market expansion. „China, India and SE Asia are high-growth markets and they appear a safe bet for us to expand and invest the business there.“ For instance, many companies in the West face intense competition and shrinking domestic market and surmise that a way to turn around their fortunes is to venture into high growth regions in Asia. It is a myth that it is a safe route to success doing business in Asia. Though the business opportunities are great, there are many pitfalls and differences in business practices that these companies ought to be mindful about in venturing into high growth Asia.

Myth 5: Yet, it is unfortunate that business schools today rarely teach the subject of „Corporate Turnaround“. Many of these business graduates eventually work for troubled companies and are inadequate to handle the real-life corporate situations. It is a myth that textbook knowledge will suffice in helping these executives manage a corporate turnaround situation which is much more esoteric and complicated. The turnaround executive has to be a dictator, crisis manager, visionary, entrepreneur, coach, spiritual leader all roll into one.

Myth 6: „Firing shall continue till morale improves“ The media have fuelled this myth by portraying the turnaround manager as Rambo, the macho man in the movies of the same name, who destroyed everything blocking his way. For example, the media nicknamed turnaround leaders like Jack Welch, the former chairman of General Electric (GE) as Neutron Jack; Al Dunlap, the former chairman of Sunbeam Corporation, the Chainsaw Al; and Magaret Thatcher, the former Prime Minister of United Kingdom, the Iron Lady. Both Welch and Dunlap fired thousands of employees in their turnaround endeavours. Magaret Thatcher privatized Britain Inc, the state-owned enterprise, resulting in loss of thousands of jobs.

Myth 7: The theories on change management are fairly straightforward and a lot of common sense. Yes, it is true that turnaround and transformation go back to basic principles. However, sometimes common sense is not too common. If it is, there will not be so many business failures today. Be mindful that in a turnaround environment, often times, the manager is put into a difficult position and he has little time to think clearly or refer to business books for guidance. Making the right timely decision and executing the decision are what matter.

Successful change management using transformation and turnaround should be holistic and based on addressing both strategic and operational issues in the short and long term. Comprehensive turnaround plans should seek not only to cut costs but to grow revenues and change the corporate well-being in order to facilitate and manage changes.

Also, there is no single right style of leadership in a change management environment. Turnaround executives have to be benevolent dictators, crisis managers, visionaries, entrepreneurs, coaches, spiritual leaders all roll into one. With so many hats to wear, a turnaround executive may appear schizophrenic exhibiting multiple and at times contradictory qualities. In some tough turnaround situations, the turnaround executives may even need to possess the supernatural skills such as selling a stethoscope to a tree surgeon or resurrecting the dead. As a result, business schools are often relegated to producing textbook executives who are unable to cope with the realities in the marketplace where many sick and troubled companies abound.

About the Author:

Mike TengDr Mike Teng (DBA, MBA, BEng, FIMechE, FIEE, CEng, PEng, FCMI, FCIM, SMCS) is the author of the best-selling business book “Corporate Turnaround: Nursing a sick company back to health”, in 2002. In 2006, he authored another book entitled, “Corporate Wellness: 101 Principles in Turnaround and Transformation.” Dr Teng is widely recognized as a turnaround CEO in Asia by the news media. He has 27 years of experience in corporate responsibilities in the Asia Pacific region. Of these, he held Chief Executive Officer’s positions for 17 years in multi-national, local and publicly listed companies. He led in the successful turnaround of several troubled companies. He is currently the Managing Director of a business advisory firm, Corporate Turnaround Centre Pte Ltd, which assists companies on a fast track to financial performance. Dr Teng was the President of the Marketing Institute of Singapore (2000 – 2004), the national body representing some 5000 individual and corporate marketing professionals in Singapore. Dr. Mike Teng is a member of the Turnaround Management Society and regularly publishes in the Turnaround Management Journal.