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Turnarounds and revitalizing with Bob Papes

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Tuesday, November 01, 2011

 

BY TOM COX

Seasoned executive and turnaround expert Bob Papes discusses the timely lessons of his two books, “Turnaround” and “Management During an Economic Crisis.” (These are both out of print, unfortunately.)

Bob has engineered five consecutive turnarounds of businesses in the $15 to $35 million range.

Yet, most turnarounds fail.

What made Bob’s efforts successful? Bob uses one word: Team. To follow in Bob’s footsteps, you will need to have the ability to build and lead a team.

In each case, Bob quickly identified the existing staff people who could be part of his “Business Leadership Team.” Bob works as an equal with the rest of that team.

Decision Making

On Bob’s Business Leadership Team, decisions are reached by consensus — never by voting. Folks who may not fully agree with the majority still have to be able to “disagree and commit” — that is, this may not be your first choice however you can still support it. And that’s good enough. Voting is bad, because the losers aren’t committing to the chosen plan.

Different viewpoints are excellent — they bring valuable perspective.

This distinction is vital — imagine a sports team where one player disagreed with the passing play called by the coach. If that player ignores the other team members and doesn’t run the play — if this player chooses to run some other play by themselves — then the entire team’s play is doomed. Team members have to be able to say “I will support this even though it’s not my first choice,” and mean it.

Keep working on understanding each team member’s concerns until they can agree that they will support the chosen path. It’s more important to have 100% support on a 90% good plan, than 90% support of a 100% good plan.

Bob figured this out, not by reading it in any management book, but by watching managers being autocratic and ineffective. People left meetings saying “this is never going to work.” And they were right. Bob decided even before he first became a manager, that he would seek consensus from his teams.

Leading vs. Managing

Bob had to turn around an International Paper operation, and they already had a cross-functional team. When he arrived, Bob found that this team had spent the prior 3 months debating what color to paint the restroom. This team was just not focused on the issues that lead to results.

Managing has to do with setting goals, tracking results, and holding people responsible.

Leading has to do with setting a vision, and establishing a strategy to reach that vision.

Most managers are busy 95% of the time managing and don’t lead. You must balance the two.

Once you have a vision and a strategy, then set goals, then create action plans to achieve the strategy.

Accountability Means Goals

The lack of accountability for results is epidemic in American industry. Of 70 firms Bob has helped as a coach or consultant, not one had accountability for results. To have accountability, we first need goals. With these same 70 companies, the owners had goals that were vague and unquantified, and their people had no goals at all. The owner never put the goals on paper and never shared them.

Good goals must be objective and quantifiable. The top goals must roll down into specific individual goals for key people.

To grow the bottom line, you need a high performance organization. For that, you need accountability. The effectiveness of the organization is a function of how well people are managed.

It’s vital to set the goals the right way.

Do NOT set them as so many do: first determine the profit they wanted, then added overhead cost, then figured the profit margin, and then figured out how much they would need to sell to make the desired profit. That’s just a wish. It’s disconnected from reality.

The right way is to set goals jointly with the people who will be trying to reach them.

Then, work with each key person to turn the annual goal into a monthly and weekly work plan. And as the leader you need to impose consequences for non-performance. That includes getting your hands dirty with helping that under-performer to see where they’re stuck or confused, and helping them get un-stuck.

As Henry Evans puts it in “Winning with Accountability” you need four things for true accountability:

  1. A clear visual description of the outcome
  2. The date, time and time zone of accomplishment
  3. The person who is responsible
  4. Sharing of this with others

Bob calls this an “action plan” — it has quantified behaviors. It’s “make 20 cold calls per day” or “have 2 sales conversations per week.”

Review progress against goals monthly or quarterly. Put it on the other people to come report to you — don’t chase them. Expect them to bring you a standard report of results vs. plan.

These quantified goals also help you with annual performance reviews and bonuses.

Last Word

Bob urges everyone to start with setting quantified objective goals, set them jointly with the workers, monitor them, and reward people for their results.

(Listen to the interview here.)

Tom Cox is a Beaverton consultant, author and speaker. He coaches CEOs on how to boost performance by building workplace trust.

 
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