Everyone has a different perspective of the same thing – the business. They see different issues and expect different outcomes. Yet they have to remember that they are part of a team and need to work together with the same purpose to gain success.
A business is really a microcosm of society, with all the same attributes and issues.
We all understand the time-critical nature of a restructuring and the need to implement proper strategic and operational plans. However, without the support of key incumbent staff members even the best plans and strategies are doomed to failure.
The task of the turnaround manager is to understand the importance of the human element and quickly build up the trust of the key executives, understand the challenges that they face and help break down any barriers that they have to outside help.
The turnaround manager must demonstrate that he can deal competently with both the business issues and the human issues. Otherwise, the delays that result can be costly for the business or detrimental to the turnaround process.
Consequently the human factor is the most important element in a successful restructuring. But how do we deal with such an important variable? There are no hard and fast rules on considering the human factor.
Ultimately the human factor has to be part of the turnaround strategy. You need to ensure that there will be little conflict and a lot of confidence in the strategy employed. The turnaround manager should be objective with no hidden political agenda, but with a singular purpose -- to rescue the company.
His task has been made even more difficult because he is dealing in an environment where there has often been a lack of information and trust. Yet despite this scenario, he must be able to gain the confidence of the staff and convince them to follow him through the ensuing difficult times.
What’s more, it takes time to gain a good understanding of all these factors in an organisation. And time is a commodity that we don’t have enough of in these circumstances. Therefore we need to understand these factors in an adverse environment with an often hostile audience.
Analysing the situation, developing an appropriate strategy and action plan are the most effective ways of taking control of some of the human factors. If you are seen to be in control, decisive and competent then people will take some comfort in that.
And once the people in the business can observe that progress is being made, that should result in growing support and a positive outcome.
You must always remember that people have to confront significant change in a turnaround including:
- Actual or perceived loss of control
- Change of culture
- Change in process and procedures
- Change and definition of roles
You need to spend time addressing these changes with key people and providing them with the skills to bring their subordinates along with them. Initially it is best to focus on common goals and achieve some small successes before advancing to the more difficult tasks.
At the same time you need to assess the strengths and weaknesses of the business. You must assess its people and identify those that will make the psychological shift that will assist with the implementation of your restructuring plans.
There are six vital steps to determine the human factor issues:
- Identify key personnel;
- Interview key people;
- Provide information;
- Empowerment and responsibility;
- Involvement in the change process;
- Leadership and trust.
Identify the Key Personnel
The most important people are not necessarily those in management.
If you have identified the company’s core business then you will be able to identify the key people in the structure.
You need to ensure you have the key competencies to enable the business to continue to function effectively.
Interview Key People
Talk to the key people and listen to what they have to say. Apart from the initial negativity, they will provide key input to change.
Their “buy-in” to the process is imperative to the success of the turnaround. The fact that you have afforded them time at such a critical phase will assist in getting them on side.
Communication is very important, so try to provide as much information as possible. In an environment where information has been scant and management has had a siege mentality, the provision of information is seen as important by the stakeholders.
Management may resist the idea of allowing much information to be provided to anyone else. However, it is important that management is convinced of the need to provide an information flow. Start by disseminating some information and build on this base slowly.
Empowerment and Responsibility
With information comes empowerment and with empowerment comes responsibility. It is through responsibility that you can get “buy-in”.
It is important to allow the different tiers in an organisation to have some responsibility. In this way they feel part of a team and are contributing to an outcome.
This will also help overcome the siege mentality of management and allow changes to be effected quicker.
Involvement in the Change Process
Involvement is a necessary outcome of responsibility. If people are involved in the change process they are less likely to try and undermine it. They will generally be happy that they are being allowed some involvement, something the previous management probably did not allow.
In this way the various tiers of an organisation may appreciate the perspective of one another.
Involvement is especially important when cost cutting or reallocating resources. Imagine the lowly paid production worker losing some benefits whilst the National Sales Manager takes delivery of his new company BMW. With information and involvement, potential areas of conflict can be managed.
Leadership and Trust
These two attributes are the most important ones to have in a turnaround manager. The employees of an organisation have endured what they perceived to be lack of leadership and a resultant lack of trust. They will look to the turnaround manager to demonstrate these attributes.
Everyone at the company will look to the turnaround manager to provide the vision and the plan to lead the company out of its present problems, thereby securing its immediate future.
When it comes to turnaround, the easy part of the problem is to develop a restructuring plan. The difficulty is in implementing this plan on a timely basis. The human factor tests our patience and professionalism.
Often a simple restructuring initiative may take considerably longer than would otherwise have been considered reasonable. However unless it is absolutely critical to the rescue plan it is best to take the time and take stock of the human factor and obtain involvement and “buy-in” rather than directing change from the top down.
Sometimes some issues may be quarantined whilst progress can be made elsewhere. But no progress can be made without due regard to the human factor.
The skill of the turnaround manager is to focus on returning a troubled company to a profitable path while harnessing its human resources in support of the plan. Remember, good staff is one of the most important assets of a company.
On Death and Dying, Elisabeth Küble-Ross, 1979
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