Turnaround Challenge - Chief Executive Officer

Client Motivation

The client was a successful leader of a $1 Billion publicly held firm with a proven track record. His business experience spanned over twenty five years and his reputation was stellar. As a high achiever, he was always looking for that "edge" that could make him even more effective. That constant hunger for learning and improvement under-pinned much of his success.

He was hired to be CEO of a $5 Billion public company--in a different industry--and lead a major turnaround. The company's culture had become highly bureaucratic over its 100 year history and accountability at all levels was poorly embraced.

The business had ten manufacturing facilities located in the US and Asia. Over 20,000 employees worked in the organization including an executive leadership team comprised of nine senior officers representing three business units and various functional areas.

While its markets were attractive, the business had underperformed for five years and actually booked an EBIT loss in the previous year. Many of the disappointments could be traced to operational deficiencies and poor execution.

It was quickly apparent he needed to address three key issues. First, the senior management team needed to be upgraded and its capabilities expanded. Second, several key acquisitions had been poorly integrated, resulting in an inefficient and ineffective cost structure. Finally, the business lacked a solid understanding of which markets it could optimally serve.

While he had confidence in his abilities, transforming any business culture is a big undertaking. He was "on-point" to paint a compelling vision, motivate his team, and ultimately create an "execution culture." At its core, this meant engaging the hearts and minds of key members of his organization in a profound way.

The Coaching Relationship

The CEO engaged Stratman Partners Executive Coaching to help him identify ways to improve his ability to inspire collaboration between himself and his senior management team. Upon progressing through the initial assessment phase, these were some early insights:

Towering Strengths

  • Strong bias for action: believed actions speak louder than words.
  • Decisive: tended to choose a course of action and stick with it.
  • High Stress Tolerance: remained calm under pressure.

Improvement Opportunities

  • Judgmental: could improve ability to withhold judgment until all facts are in.
  • Decision Process: didn't tend to collaborate on decisions yet felt he did.
  • Autocratic: too dominant, needed to rely more on influence skills.

As is often the case, some of his strengths were also weaknesses. Given his large span of control, he needed strong influencing skills to assure he effectively reached and motivated all employees, domestic and international.  In addition, his relative inexperience with the industry implied the need for high collaboration and the ability to get open and honest input from leaders with industry tenure and expertise.

Finally, the growth plan involved cleaning up some recent acquisitions and potentially adding new ones to expand the firm's reach in two key growth markets. This acquisition plan meant that he would need to inspire confidence in the acquired company(s) and address morale issues as units were spun out.

Moving Ahead

Upon working with Stratman Partners for twenty-four months, he began to see some early success signs:

  • Improved EBIT by 50%
  • Improved Economic Value Added by 40%
  • Productivity improved by 25%
  • Market Share in the largest Business Unit stabilized

He hired a new management team upgrading all key executive leadership positions with the exception of his Chief of Operations leader. The Corporate Center was reorganized, reducing fixed overhead by $8MM. Implementation of a new marketing strategy resulted in a favorable shift in their customer portfolio (in the largest business unit) contributing to a gross margin improvement of 50%. Customer surveys began to indicate increasing levels of customer satisfaction in both quality and service.

Most importantly, the culture was changing. Employees began to think in terms of scorecards and hard metrics. An employee survey issued 18 months into his assignment indicated that employees were confident in the future. Collaboration and teamwork were increasing. Finally, even painful downsizings and restructurings were perceived as being handled fairly.

In addition to coaching our client, he engaged Stratman Partners to work with several members of the senior management team in one-on-one coaching relationships. We also worked with the senior leadership team to help improve functioning and effectiveness.

The company continues to experience great success and has emerged as the most profitable player in the industry.


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