The founder and CEO of a construction company knew his company was successful. "We're doing pretty good, really. ..." He had said it at least four times that hour. And they were doing well; at least, well enough. But how could his staff recapture the enthusiasm they all had had 15 years before, when he started this company on a shoestring, borrowing against a second mortgage on his home.
It was a situation we had seen many times before.
Our work is turnaround, business turnaround. Most of our clients, however, are successful companies seeking surges in profits, or reversing the trajectory of their business, or declaring new beginnings. Pre-emptive turnaround or early decline turnaround might be good descriptions of our work. But, whatever term is used, profit/performance improvement is what our clients expect.
In traditional turnaround work, the financial crisis provides management with the energy, the willingness, and even the eagerness to change, to improve. In our work--upstream or devoid of a real crisis--we are faced constantly with complacency. "Lack of urgency" is the more polite term, but the real losses caused by complacency, measured in missed opportunities and business disasters bought for the future, deserve even stronger words.
And creating a radical improvement--in the face of complacency--is the very essence of what we do.
Some 20 years ago we created a process to break through this complacency and invest the energies and commitment of management into a new beginning and a new level of performance.
The concepts originated in our traditional turnaround work. We had observed that in successful, crisis-driven turnarounds, underneath all the technical and financial adjustments, four events always occurred:
* A profound simplification of politics;
* A palpable discharge of emotional energy, corporate as well as personal--catharsis;
* An investment and deep commitment of this same energy into a simple, clear picture of the future of the company--cathexis;
* Immediate action!
Finding a way to cause a successful (and complacent) company to experience these events became our challenge. It turns out there are just four steps.
Acting the part
The first step is the creation of a virtual crisis. "Virtual" because in reality it is safe for both management and company. "Crisis" because it contains all the intensity of emotion that a real, financially driven crisis would have and upon which we can draw for the energy and commitment to simplify the politics.
The second step is to use the "crisis" to get management to identify and acknowledge the useless, dysfunctional, and sometimes pathological things that are going on within the company. And then to feel, experience, and express revulsion (catharsis).
The third step, and this occurs simultaneously, is the investment of the energy released in the catharsis into a commitment--a deep visceral commitment--to a different way of behaving, one of relating to each other, of doing business. A new blueprint: cathexis.
The fourth (again this happens simultaneously) is to create a detailed action plan to create the changes needed and commit, commit viscerally, to doing them.
All that remains is to begin immediately and Follow up! Follow up! Follow up! Of course, all of these steps hinge on the successful creation of the virtual crisis.
To prepare for this so that everything else falls into place almost automatically, we use one of our questionnaires. The one we have most frequently used is titled "The Corporate 360--Management Team Survey." It provides a detailed look at the organization from within, seen through the eyes of and from the perspective of the senior managers, the people who are most responsible for conditions as they are and who must lead and drive the changes that are needed.
The survey addresses, among other factors, some 100 drivers of corporate performance. These are the factors that actually cause, underlie, and impel the behaviors that generate performance. They are also the factors that can cause complacency, that can generate psychic pain in a company, and that can bleed the motivations of people to perform, to create, and to succeed.
What are they then, these performance drivers? The most obvious driver, of course, is morale, though that is not really important, since it is more of a symptom than a driver. Much more important are corporate (in)decisiveness, acknowledgment of work, communication of vision, integrity of management, and the relationships of managers.
Crisis and resolution
Once the management team has answered the survey, it is remarkably easy to create a virtual crisis. Management teams seem to know how to generate them themselves, with a little help from the CEO. There are just a few steps:
* First, create a safe, emotional place for your management team.
* Second, bring to the surface the real drivers of corporate performance.
* Third, cajole, force, insist, and persist until the management team, individually and as a whole, addresses these drivers at the emotional level, and reacts, letting loose the energies of revulsion. (This is who we are, God Help Us!)
* Fourth, invest these energies in a new direction, a new vision.
* Fifth, take action.
A real business crisis creates havoc, but a virtual crisis can be repeated again and again with positive results. A CEO who masters these techniques can generate a continuous process of proactive adaptation and improvement.
Mastery does take time, and watching someone do it first is helpful. But all that is really needed to begin the process is a managing officer who wants success and has the courage to make his managers look deep into the heart of the company and not flinch.
Tom FitzGerald is president and CEO of FitzGerald Associates. Founded in 1976, the company is headquartered in Lake Forest, Ill. Tom can be contacted at Fitz@ManagementConsultants.com or 847-599-9960.
It is based on truth (found through company survey).
It is focused only on the management team.
It is safe for all. (This is a guarantee the CEO must make.)
It simplifies politics. (Once everything is brought out in the open, there are no more secrets.)
It generates as much energy as a real crisis would for the people who experience it. (This must be experienced, but it is so.)
It radically exposes the real performance drivers of the company to the management team.
It forces true acceptance of what is--as well as understanding.
It causes intense discharge of emotional energy. (This can get noisy, but that's OK.)
It allows energy to be focused in a new direction, invested in a new vision. (The CEO must point the way.)
It leads to immediate action. (The CEO must ask it, demand it if necessary.)