When times are tough in an organization, a CEO needs to help get the company back on track, fast. A CEO-led business transformation will take an intelligent strategy and passion for following through. He/she takes the lead in making the necessary changes to bring an organization back from the brink of failure. Azul B2B is here to tell you what to look for in a “turnaround CEO.” You’ll learn how to ensure that this leader can reinvent your business and give it new life. Our team of B2B experts is passionate about helping your business thrive. We’d love nothing more than to coach you through the process of managing a CEO transition aimed at rejuvenating your business brand.
Assessing the Health of your Company
Business change is inevitable, and refusing to acknowledge, accept, and adapt when change happens is a recipe disaster. The good news is that this won’t happen overnight. There will be indicators that can help you gauge your company’s health so that you can anticipate, prepare for, and strategically plan for a reverse course of action. CEOs should be especially mindful of environmental factors that can negatively or positively impact business.
Internal Factors
These are events that occur within an organization that are generally easier to control than external factors.
- Management changes: Managers are responsible for overseeing other parts of the internal environment, so their neglect can have a direct impact on the business.
- Employee morale: Internal politics and conflicts can destroy even a talented and capable company.
- Cultural changes: This typically flows from the top down. A company that emphasizes collaboration and teamwork performs differently than one where employees compete with one another.
- Financial changes or issues: If your cash resources are too limited, you have less flexibility to grow and expand your business.
External Factors
These are events that occur outside the organization that are harder to predict and control. Because of their unpredictability, external factors can be especially dangerous for an organization. They are hard to prepare for and often catch a company off guard.
- Changes to the economy: Even a well-run business may not be able to survive in a bad economy.
- Threats from the competition: Whether you’re just starting out or established, there will always be competitors fighting to take away from your business.
- Political factors and government regulations: Changes in government policy can have a huge effect on your business. A classic example of this is the tobacco industry in the 1950s.
- The industry itself: Supplies have a major impact on your costs, which in turn affects your customers.
Characteristics of a Turnaround CEO
For a CEO transition to be effective, certain character traits will distinguish the best-qualified person to take on this leadership role. A CEO transition will require intelligent decision-making using unconventional and bold methods. To orient themselves to all that a turnaround mindset entails, a CEO must be able to manage and motivate people in times of extreme uncertainty and distress. They must also restore confidence and foster inspiration.
McKinley Advisors names the following characteristics as those that make a great turnaround CEO and leader:
Prioritize People Above all Else
There will eventually be a breakdown if leaders cannot find a way to motivate staff. Leaders must remain highly attuned to the individual’s stamina and mental health. Additionally, they must acknowledge the emotional toll of the work at hand for everyone involved. Prioritizing the people vs. the work should be a philosophical leadership fundamental.
Reframe How the Board Functions
In times of company crisis, it isn’t logical to continue running the business as usual and expect a change to happen. One area where a business model will change to propel a business transformation may be in the power of decision making. This deals with where, when, and with whom company decisions are being made. Suppose a CEO is trusted to transform the company. In that case, there needs to be an understanding of when a CEO will make an executive decision on their own, and what constitutes a circumstance when the company board is advised before a decision is made.
Make Rapid, Strategic Decisions
The typical timeline for decision-making is compressed from years to months in times of significant and rapid change. A CEO transformation requires quickly assessing conditions, anticipating the impact of a decision, and focusing on what’s working and eliminating what’s not. A CEO must be directive and strategic in all decision-making from start to finish.
Maintain Transparency and Consistency
Communication is critical for the turnaround CEO. Fostering transparency and limiting exclusivity is the way to go. Being straightforward and honest in communications will foster trust by limiting surprises. This can feel deceiving and divisive.
Prepare for the Potential Scenarios Ahead
If a company is well on its way to a successful business transformation, it’s important to account for the unexpected. Failing to acknowledge that all businesses will have seasons of decline and not having a strategic plan in place for when that happens will set the company back yet again.
Don’t Hesitate
A good turnaround CEO recognizes that the business is currently experiencing the worst-case scenario if their leadership is being utilized. If the company is down, there is only one real direction to go, and that is up. A CEO ready to lead a turnaround embraces risks and invests in the organization’s future. They don’t do this in a reckless way, but in a confident and focused way unaffected by fear of the risks.
AZUL B2B: Your Guide to CEO Turnaround
Top-performing CEOs can transform a sinking business into a profitable corporation by passionately believing that transformation is possible, exemplifying strong leadership skills and timely and strategic decision-making capabilities.
If your company is on the brink of failure and struggling to find the much-needed leadership of a turnaround CEO, get in touch with Azul B2B. Our qualified team will work with you to find the right solution for restoring life to your business. Let’s start your business transformation today.