Will Rogers once said, “If you find yourself in a hole, stop digging.”
Government investment in transport and infrastructure has seen a significant increase, with today’s predicted pipeline of infrastructure projects being the largest and most comprehensive ever.
This record planned investment doesn’t however, mean that companies in transport and infrastructure can put their feet up, safe in the knowledge that projects, and profits will come flooding in.
Carillion’s difficulties, following a £845m write down, shows us that even industry giants are at risk to escalating costs, problem contracts and late payments.
Unsurprisingly, Carillion are now under-going a massive executive overhaul. Immediately, Richard Howson, CEO, was replaced by Keith Cochrane on an interim basis while a search is undertaken for a permanent boss to turnaround the struggling business.
Carillion aren’t the first contractor to look for outside help during a profit crisis. Back in 2014, Balfour Beatty poached Leo Quinn from Qinetiq to revitalise the failing business and return profits to the black.
So what do companies need to recruit for in a crisis?
Corporate turnarounds will undoubtedly require some challenging and controversial decisions. Decisions that can be tough for someone stepping up from within the business, who may be biased or emotionally attached towards previous strategies.
Hiring an external turnaround specialist takes away the attachment and allows the new decision maker to act with a clear head in the best interest of the company.
Look for candidates with significant turnaround experience and financial acumen. Carillion have announced the appointment of Lee Watson as its Chief Transformation Officer, on secondment from EY.
Turnaround executives are logical, objective decision makers. In a crisis, companies must do whatever is necessary to survive and the person leading that charge will need to make quick, tough choices to implement strategies that either no one has considered before or been brave enough to execute.
They must be able to quickly determine where resources should be sent, which business units can secure the company’s immediate survival and eliminate those that are draining profits or show poor promise.
Business turnarounds will almost always involve flattening the organisational structure, meaning redundancies of under-performing teams or individuals are inevitable. Not only this, leaders will need to establish who is on their side and who is likely to challenge their strategies, often replacing resistors swiftly.
Buy-in is essential to the success of any turnaround strategy. It is crucial that any new leader brought on board can convey a sense of calm, control and confidence to all stakeholders, even if the final outcome is uncertain.
When recruiting for a crisis look for individuals who are able to articulate clearly the company’s direction and strategies to reach the new objectives.
Employees will be nervous and morale will be low, leaders must be a spokesperson for the company motivating teams to execute the turnaround.
4. Hand on approach
Crisis turnaround isn’t something that can be delegated down the chain. Leaders will need to be hands on in their management style, understanding exactly what is happening in every function of the business.
Turnaround leaders will need to hold daily meeting updates on progress and know when to get involved if issues aren’t resolved quickly.
To dig a company out of a crisis leaders need to take tough decisions that will inevitably be unpopular with staff, investors, clients and/or suppliers. It requires great resilience to stick to your guns in this scenario. Resilience and a furious work ethic are essential characteristics of successful turnaround leaders.
Not all business turnarounds are as drastic as the one facing Carillion bosses, sometimes companies just need a change of direction or an outside influence to get them back on track. If you find yourself needing to recruit for a crisis, click HERE to see how we can help.