While many companies are facing new challenges and increasing volatility, we’ve found that most leaders’ responses and outcomes tend to be unique. While quarantined with COVID-19, Todd Herman, author of The Alter Ego Effect, decided to interview 29 CEOs to hear how they described their circumstances.
Each company was experiencing a downturn. Herman analyzed each CEO’s word choice and language to see how they were reacting, noting the importance of a leader’s pronouncements: “words create reality.” He saw big differences in how executives were wired and reacted to the economic rollercoaster. His findings led him to divide the CEOs into three groups:
Fear-Focused CEOs – emotional, concerned, and overwhelmed. Tended to use negative future pacing words like ‘struggle’, ‘fear’, ‘hard’, or ‘difficult’. Spent the most time watching media or finger pointing rather than what could be done.
Unfocused CEOs – dismissive, uncertain, wait and see. Talked about getting a plan, but tended to use the word ‘plan’ in a negative or needs-based way.
Strategy Focused CEOs – take and use what’s given, focused on growth/opportunity. Positive. Spending time leaning into networks.
Uncertainty is growing in the US with coronavirus cases
mounting. California, Illinois, Michigan, and other states have taken serious
actions with shelter-in-place orders, leaving many people wondering how this
will impact them personally as well as their companies and the economy as a
At the same time, we’re reflecting on how much there is to
be grateful for, including the strong relationships we’ve built over 10+ years
with inspiring leaders. These are women and men who focus their careers on running
into the burning building – the company in trouble – learning fast,
listening, assembling resources, providing fresh and objective insights,
developing new plans and actions for survival and ultimately blueprints for a
We recently convened a call with some RED Team execs who shared how they are adapting to new ways to work. Many executives shared experiences on the front lines figuring out how to help combat the virus and also help people work smarter and safer:
Leadership was a prominent topic at InterimExecs’ latest Rapid Executive Deployment (RED) Roundtable event in Chicago. Panel experts discussed leadership early and often as they reflected on change initiatives, the impact of automation on executives and workforces, and the values that make great executive leaders.
A recurring theme that cut across speakers and topics was the importance of having the right team in place, starting at the top. Executives set the tone for the entire company. Their values trickle down and play an outsized role in the organization’s success or failure.
“The message from our perspective is that if we have the right team and the right value set, I think any company can find a position and outmaneuver the competition,” said Greg Jones, Managing Partner at the Edgewater Fund, who spoke on day two of the Roundtable with Brian Boorstein of Granite Creek Capital Partners. “I’m looking for someone who puts the organization and the values of the business ahead of their own,” added Greg. “If you don’t have that, it’s a disaster in any scenario.”
Brian also singled out selfishness as one of the least desirable executive traits. “The worst people are those that are really only concerned with themselves,” he said. “If we don’t have the right management team to start, we’re in trouble. We generally go to InterimExecs to find people to help us out.”
Friends, we are kicking off 2020 energized by all the big wins to come after completing an excellent 2019 adventure. Ok, ok, 2019 is seeming a bit passé now that we’re in a brand new shiny decade (still letting that set in), but before we get into upcoming plans, will still need a quick recap and note of appreciation for your hard work and support.
First, a big thanks to our team of elite executives we call RED Team Ready, who performed in amazing engagements throughout 2019 in the US and Europe. We are nothing without your trust, your encouragement, and your daily support. Truly.
With a go-to team of brilliant leaders eager to jump in at a moment’s notice, we have an unmatched capability that makes up the essence of RED, Rapid Executive Deployment. While you hail from around the world and your skills and abilities are each unique, we can sum up your excellence with a common and shared passion and unstoppable energy to give your best in everything you do. We know you love the people and organizations you lead, and cannot say thank you enough for teaming up with us.
At the beginning of my career, I was involved in a lot of startups. I was starting with nothing – zero, zilch — so I’ve always had a lot of respect for entrepreneurs because you start from an idea and not much else. To be honest, in the beginning, I somewhat discounted my friends who were inheriting family businesses. When they’ve been at it for generations, I thought ‘well, how hard can this be?’
Thing is, the older I get, the more I’ve gotten to know various family offices and family run businesses and now, I’ve come to realize that running a family business is harder. Much harder. It’s a legacy that in some ways can be so overwhelming to continue to build, and not screw up, whereas with startups you have the luxury of low or no expectations.
Compare that with the legacy/obligation/burden handed to the second, third, or fourth generation, and there can be incredible pressure on the business and family to do well. And it’s even harder now, when no business – no sector – is immune to the kind of disruption, to the kind of disintermediation that technology has introduced into every industry and market. Nothing can be taken for granted, regardless of longevity.
As an executive who has spent his career growing companies, taking companies public, and successfully selling businesses, Charlie Shalvoy says the first thing he does when he parachutes into a company is begin with an assessment. Whether the company is venture-capital backed or private, or in manufacturing, energy, semiconductors, or industrial equipment, figuring out the current state of operations is always the first step. Charlie divides the stages an interim executive goes through in taking action in a new company into four phases:
Phase 1: Taking Hold (90 Days)
When a company seeks to expand into new markets or scale operations to support current and future growth, Charlie takes on a role ranging from Interim CEO to Executive Chairman, where he coaches and serves alongside the CEO and management team. He describes that in the taking hold phase, an interim executive identifies what’s broken – even fast growing companies need repairs. What is getting in the way? What is causing distress?
Lose weight. Exercise more. The new year’s resolutions are in full gear right now. Whether it’s getting to the gym, reading more, or eating more greens, January usually begins with a reflection of how we did and what we can do more, better, faster this year.
We focus so much on being proactive in our health and personal care. But what about our business health? Is it just business as usual, again? Or do we have bigger business goals for 2019?
Talking to company owners and investors over the years, we have discovered a lot less proactivity than you’d expect and a lot more complacency. We don’t mean activity – everyone has lots of to-do lists – where busy work mask over big or growing problems.
We often get calls when the house is on fire: cash is draining away from the business, employees are jumping ship, frustrations are mounting, or lack of fresh thinking, innovation and true leadership have led to stagnation in the market. Owners say to us my ‘business is failing, what do I do’.
It’s hard not to think how many sleepless nights could have been avoided for an owner if they would have just acted sooner. We mean solve the issues not just by trying to dive in themselves or harangue the management team more, but instead through resources or tools that could extend their capabilities and help make vision a reality.
No organization is immune to challenges, not if it has any ambition. But how do we as owners and leaders put our strategy hat on to see down the road, or attempt to see, to predict where markets will go, how customers will act and react? To play the great game of chess in the real world – which is strategy.
Sometimes that is easier said than done. The eloquent Mike Tyson put it so well when he said, “everybody has a plan until I punch them in the mouth.” We would do well to remember how limited our brilliant strategies in fact are, how fragile in the face of ambiguity, uncertainty and future black swan events.
Just look to history to see how companies have been blindsided with the punch they never saw coming. Kodak invented the first digital camera in 1975, but put launch on hold in fear of cannibalizing their film business. We all know the story from there….Kodak who? Or take Blockbuster – which failed to pivot when Netflix showed up. And then Borders and Barnes & Noble, crushed under the Amazon onslaught. And the examples of business strategy gone wrong go on…
The best, truest, and most bleak line I’ve heard from a mega-successful company founder was Dave Becker telling me: “we have all had the sleepless nights, when it’s 2am and you’re staring at the ceiling.” Dave is the founder of a number of companies including First Internet Bancorp (Nasdaq: INBK), the granddaddy of online banking.
From the outside, we see a successful entrepreneur with multiple home runs and think they must be sitting on easy street. What could possibly go wrong?
The answer is: everything. It always appears easy or obvious once a company has made it, but what we often don’t hear about are the trials and tribulations that happen at every stage of a company’s growth from young and unknown, to in between, and then big and ambitious. The sleepless nights. The questions of can you make payroll. The we-almost-went-bankrupt moments. This is real and it’s no surprise that many of our inquiries for help from owners show up in our inbox after the 9-5 employees have gone home.
Turnarounds aren’t what they used to be.
Like a good spy movie, turnarounds used to center around a strong central figure making things happen. Turnaround stars and distress experts were born, like Stephen Cooper of Enron and Krispy Kreme fame.
In 1985 the Turnaround Management Association started as a conference of company turnaround specialists in Chapel Hill, ultimately creating a rigorous formal program and exam for Certified Turnaround Professionals.
“Back then the time frame for turnarounds was long,” Richard Lindenmuth, an executive who has completed 23 turnarounds over the years said. “There was bridge financing from banks that would facilitate a turnaround and bankruptcy was really used as a tool for restructuring a company.”
Times have changed. Many of the Fortune 500 companies from those days have merged or disappeared due to outdated technology, products, or services (think RCA, Blackberry, Zenith). At the same time, the way to turn around a struggling business has transformed, being driven by several factors: