Turning a failing organization around is one of the most interesting activities

Question

Turning a failing organization around is one of the most interesting activities in management. When organizations see themselves in that downward spiral, their managers may feel that they are unable to stop the pace of negative change. That worry and that downward momentum can be very powerful. At the same time, it sometimes takes only a key impetus to deflect that movement and turn things around.

Consider the following scenario:

You have recently been hired as a new manager for a failing division in a company. The product line is outdated and losing market share, interdepartmental communication is adversarial, and competition for corporate funding is fierce. As a new manager, how are you going to turn things around?

Your first task as the new manager is to write a 2–3 page plan for changing the organizational structure of the failing division, incorporating the following elements:

•Explain how you would address each of the 3 main problems in the organization: outdated product lines, adversarial communication, and competition for internal resources. Thinking about organizational structures reviewed in the text, which one (or ones) do you think would be most suited to this organization, and why
•What steps would you suggest to manage the transition from the old organizational structure to the new
•How would you assess the external environment and integrate this into the turn-around plan

Explanation / Answer

When leaders begin to believe that they are losing the battle, they have to ask themselves a singular question, "Can I stop this?" If the answer is no, then the spiral will continue no matter what happens. The spiral has already won. The leader has lost faith in him/herself and their team. That is the source of stability in a managerial position. It is still possible to bring their organizations back online and bring the products up to date and once again competitive. But it requires the rebuilding of faith, confidence and rapport. Here are several steps that have to be adjudicated quickly to begin the road back: 1) Explain the situation. No matter how bleak and painful it may be, the employees and subordinates have a need to know. The communication lines have to be reopened. You will be suprised how quickly they will start to react and become proactive when the words "if we can't repair the damage to this situation, all of our jobs will be in jeopardy" drops on to the table. Be prepared with all the statistical and factual data about the situation as you can get. Note: This should be an informative session and not a conference. If the floor is opened to comments, then the leader allows for blame to start circulating. The leader needs to put a stop to any actions that cause blaming and conflict immedaiately, not matter how deserved the accusation. A quick way to do so is that he can open the floor to questions about the metrics of the situation to provide extra information and explain the seriousness of the situation. Also, be prepared to quell rumors at the water fountain as well. 2) Call in the managers and supervisors in to a meeting. This is a preparation/prelude meeting. This is to inform them that changes are about to be made to both the product line and its distribution channels, but the changes will be made by the division/department not the higher-ups. Assign a vision to the statement and a timeline of how its going to be fixed in metrics that can be measured and followed. They are to leave and talk with their subordinates about what can be changed and improved and in what way. Focus on product quality, quantity, functions, design/develop/distribution processes. They will report back for a product brainstorming session in 2 days. Any group not reporting will be the first considered to go on the chopping block. Accountability must be paramount at this juncture in time. 3) Brainstorming. Rules first before anyone speaks. No one comments on the ideas presented until all are presented. One person is to be assigned as devil's advocate to see both sides of the story for each item. Don't skip this step. Each group reports back with the best of their ideas, no matter how ludicrious it may seem. Then the floor is opened up for rebuttal and development of each idea presented, one by one. Do not allow for anyone (especially senior personnel) to immediately attack an idea. The ideas are to be weighed and measured by the merits and faults. If faults are found, what are the controls to fix them? Do they fit within the costs vs. benefits ratio? All ideas are to be kept. Most won't be plausible at this time but later on may provide an upgrade to the product to make it more competitive in the marketplace environs. 4) Training and Implementation - Implementing the new product line once chosen from brainstorming session will give the senior leadership a chance to train their subordinates through delegation of authority. By extending the new responsibilities to the subordinates, a leader gives them a chance to flex new muscles and empowers them and their teams to new levels of achievement. One issue not talked about is communication and rapport levels between departments. An operations and development department cannot exist without market research, human resources, supply or any of the others. A leader needs to identify key personnel who "know" other key personnel in different offices. If none exist then leadership personnel need to talk "swap shop" with other department leaders. The key to this is to use existing rapport connections between departments or to use your own personnel for "training" (either learning from the other department or to train the other department) and to give them more experience. This is difficult at best because if situations don't warm up, then the person could be doing grunge work instead of great things that you first intended. If you know that there are bad blood between your department and another, then ask around to find out what happened. If its inconsiquential in nature then look to rebuild the trust levels by talking the other department up at key times in various meetings. If the other department has been weakened by yours, then provide personnel and resources to build the other department up and expect the same in return. The give and take will start to make its presence known. After a while, start working on group social events (one per month is about right for beginings) Celebrate any and all successes you get. Use rituals, celebrations, and promotional awards to reward good behavior and keep it up. All this will be draining on a new manager, but the rewards are great when that product hits #1 in the end. This is just a start, lets see if anyone can add to this.

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