The document discusses turnarounds and outlines Steven L'Heureux's framework for successful turnarounds. It notes that turnarounds require envisioning what is possible and taking decisive action. It then provides details on assessing the business situation, building an effective leadership team, making organizational changes, delivering growth and profitability, and answering questions.

1. Turnarounds:
Envisioning the Possible By Steven L‟Heureux

2. “Turnarounds require a methodical triage
of the business situation and decisive
action; but most importantly, a vision of
what is possible.”
Copyright 2010, Steven L'Heureux

3. Houston,...We Have a Problem!
Turnaround Framework
Building the Leadership Team
Making Organizational Changes
Delivering Double-Digit Growth and Profitability
Wrap-up and Questions
Copyright 2010, Steven L'Heureux

4. In Most Cases, Business Problems are Internally Generated.
The Principal Reasons for Corporate Decline Percentage
Sheer Bad Luck 1%
External Factors Beyond Management‟s Control 8%
Internal Problems Triggered by External Factors 15%
Balance of External and Internal Factors 24%
Internally Generated Problems Within Management‟s 52%
Control
Source: Donald B. Bibeault, Corporate Turnaround
Copyright 2010, Steven L'Heureux

5. 1. Management Trying to do the Same Things Harder or Faster
2. Lack of Focus on Key Financial Metrics
3. No Clarity Within the Company of Objectives or Business Goals
4. Internal Rivalries and Intergroup Conflicts
5. Culture of Contentment or Blame and Sense of Entitlement
6. Sloppy Business Processes, Quality and Cost Control Programs
7. Absence of Market and Competitive Landscape Knowledge
8. Management is Self-Indulgent Rather than Self-Critical
9. Poor Communications
10. Low Aspirations, Negativity and No Accountability
Copyright 2010, Steven L'Heureux

6. “Durable turnarounds are rarely
accomplished as quickly as expected. The
more deep-seated the company‟s
underlying problems, the longer it takes for
a cure. Even in the best managed
turnarounds, things will often get worse
before they get better.”
Copyright 2010, Steven L'Heureux

7.  Vet and Mentally Prepare the Leadership Team
 Benchmark the Company‟s Performance and Quantify
the Gap Against Industry Leaders
 Identify the Underlying Causes of the Shortfall
 Establish the Turnaround Plan Objectives
 Gain Buy-in on New Key Performance Metrics and
Timetable for Achievement
 Communicate the Plan - Infuse the Entire Company
with a Sense of Urgency, Accountability and Passion
for Winning
Copyright 2010, Steven L'Heureux

8. • Conduct ‘deep dive’ assessment of
Objective One - Active listening Company, industry and competition
and learning mode; fact • Face to face meetings with all key
stakeholders, including top customer
gathering and getting to know and new prospects
the team. • Uncover knowledge networks and key
influencers; get a feel for the culture
• Identify ideas for operational
improvements and future growth
Objective Two - Take steps to • Execute a multi-faceted
communications plan to overcome
ensure that the current business confusion and distrust
is operating at its full potential. • Begin corrective actions related to
current operational issues and
opportunities for improvement
• Compile growth ideas and prioritize
• Determine resource allocation
Objective Three - Design a plan requirements, translate to budget and
for accelerated growth and operating targets
• Present growth strategy to Board for
profitability. approval, refine based on Board input
• Communicate to organization; execute!
Copyright 2010, Steven L'Heureux

9. Radical, Not Incremental Changes are Required
 Crisis Stabilization
 Take control
 Cash management
 Initial cost reductions
 Craft Strategic Vision
 Assess company‟s strengths and opportunities
 Conduct product and market segment analysis
 Build „Go Forward‟ Leadership Team
 Launch Stakeholder Communications
 Install Organizational Changes
 Structure change: right-size the company
 Culture change: build corp. resilience and commitment to winning
 Implement Critical Process Improvement
 Financial systems and controls
 Sales and marketing
 Quality and customer support
 Information technology systems
Copyright 2010, Steven L'Heureux

10.  Bias Toward Action – Extraordinarily intense individuals that
operate with a high sense of urgency.
 Outstanding Communicators – Inspirational leaders that
build confidence within the firm‟s key stakeholder groups.
 Highly Focused – Able to quickly identify the important
issues and properly prioritize the necessary actions to be taken.
Copyright 2010, Steven L'Heureux

11.  Key Leadership Team Members
 Head of HR – Strong team development skills
 CFO – Strategic, system process savvy
 Sales & Marketing Chief – Highly competitive/winner
 Key Department Head Contributors
 Product Marketing Manager
 Customer Support Manager
 Marketing Communications/Brand Manager
Copyright 2010, Steven L'Heureux

12.  Quickly Assess Key Managers
 Benchmark against industry best
 Use outside sources such as customers, search firms
 Create a management questionnaire
 Leverage testing tools
 Kouzes Posner Leadership Practices Inventory (LPI)
 Meyers Briggs
 DISC
 BarOn Emotional Quotient Inventory (Emotional Intelligence)
 Conduct an Employee Survey
 360 review of management
 Follow-up with the results
 Hire a Team Leadership Coach
Copyright 2010, Steven L'Heureux

13.  Seriously Consider Hiring a Search Firm with Industry Expertise
 Leverage Testing and a Leadership Coach‟s Insight
 Give More Weight to „Potential‟ over „Experience‟
 Conduct Multiple Interviews – Include Dinner with Significant Others
Measure Along These Three Dimensions:
Functional Industry
Expertise Expertise
Company Cultural
Fit
Copyright 2010, Steven L'Heureux

14. Key Hiring Factors – You Must Get This One Right!
 Top Priority is People Development Expertise
 Must Have Solid Business Knowledge Beyond HR
 Excellent Judgment – Must Be Able to Value Input
 Strong Self-Confidence, Enthusiasm and Tact
 Extremely Well Read in Behavioral Sciences
 A Developed Sense of Urgency, Action Oriented
 Capable of Being a “Trusted Confidant”
 Creative Leader of Motivational Programs
Copyright 2010, Steven L'Heureux

15. There Are Five Essential Stages in Leading Successful
Organizational Change:
 Raising a Feeling of Urgency - Reducing organizational
complacency and fear of change.
 Building the Change Leadership Team - Identifying the
right individuals and empowering the team.
 Communicating - Establishing genuine „gut-level‟ buy-
in, overcoming confusion and distrust.
 Celebrating Wins - Diffusing cynicism, pessimism and
skepticism by securing „little wins‟ early.
 Reshaping the Corporate Culture - Overcoming the pull
of „old ways‟ of doing things by embedding new
behaviors in the organization.
Source: John Kotter, The Heart of Change
Copyright 2010, Steven L'Heureux

16. In Today‟s Dynamic Global Business Environment, the Ideal
Organizational Culture is Based on Resilience – Where It
Anticipates and Proactively Adapts Quickly to Market Shifts,
Yet Remains Focused on and Aligned with the Agreed Upon
Corporate Business Strategy. There Are Four Key Steps in
Transforming to an Ideal Culture of Resilience:
 Communicate: Ensure information flows (bi-directionally), communicate
and gain buy-in on metrics used to measure performance; regularly
communicate expectations and results.
 Empower: Ensure decision making authority is clearly understood and
individuals feel empowered to use their authority.
 Motivate: Motivators such as incentives, rewards and opportunities
should be personalized (as much as possible), aligned with the goals of
the company and not such that they place individuals/departments within
the organization in conflict (e.g., sales focused on maximizing revenue at
any price while product managers are focused on preserving margins).
 Structure: Organizational structure supports rapid decision making and
maximizes productivity of the firm. The org chart is understood by
everyone in the company and all reporting relationships are well
documented.
Copyright 2010, Steven L'Heureux

17.  Successful Turnarounds Typically Require a New Organizational
Structure to:
 Reflect a leaner operation
 Support rapid decision making
 Allow for flexible and cost effective resource allocation
 The New Structure Must Allow the Company to be Capable of
Adapting Quickly and Successfully. It is Essential that the Company
is Capable of More than Responding to Industry Trends, It Must
Shape and Lead Them.
 The Organizational Design Imperatives are to Maximize Productivity
and Competitive Market Advantage. Evaluation of the New
Structure Should be Along the Following Dimensions:
 Efficiency of resource utilization
 Facilitation of sound & rapid decision making
 Responsiveness to the market
 Adaptability to change
 Ability to hold people accountable
Copyright 2010, Steven L'Heureux

18.  Improve Customer Base Retention
 Provide high value services and product enhancements
 Measure and continually improve customer satisfaction
 Focus on Market Share Gain
 Improve product/service value proposition
 Target complacent competitor(s)
 Identify High Growth Market Segments
 Rigorous data driven market segment analysis
 Prioritize based on measurable evaluation criteria
 Penetrate High Potential Adjacent Markets
 Measurable data driven selection criteria
 Conduct Buy vs. Build Assessment
 Invade New Lines of Business
Copyright 2010, Steven L'Heureux

19. Within 17 Months, Revenue Jumped 145% and
EBITDA Increased 240%...Company was Sold to
Harris for $340 Million.
 Revenue From Existing Customers Increased 84%
 Increased Market Share From 10% to 25% at Expense of
Largest Competitor (Harris)
 New Customer Revenue Increased 10X by Targeting
Emerging Global High Growth Market Segment
 Increased TAM (Total Addressable Market) by 4X via
Expansion into Two New Adjacent Markets
Copyright 2010, Steven L'Heureux

20.  Strategy and Operational Decisions are Important,
but the People Judgments are the Most Critical
 Invest or Divest
 Build an Empowered, Customer Centric Company
Culture – Always Ask “Why Should the Customer Buy
from Us?”
 Listen to Ideas and Be Open-Minded
 Be Flexible, but Remain Focused on the Strategic and
Financial Goals
 Make Decisions and Act Swiftly
 Communicate Continuously and Honestly
Copyright 2010, Steven L'Heureux

21. “Always bear in mind that your own
resolution to success is more important
than any other one thing.”
Copyright 2010, Steven L'Heureux

22. Thank You….Questions?
Please email thoughts/comments to slheureux@rocketmail.com
Copyright 2010, Steven L'Heureux