By Welter Benicio
Image: Welter Benicio
You were just promoted, moved laterally or hired to manage a business and what seemed a perfect step for your career turned out to be a huge challenge. Now, you find yourself amid unexpected problems that reduce your chances to succeed. You’re not naïve and expected to face challenges in your new job, but the asymmetry of information and the lack of transparency in the hiring process affected your ability to make a decision free of false expectations. You know you had the experience to understand what was going on with the business, what to expect from the future and more, you did a good research and placed the right questions before accepting the offer. Reality is: the hiring process was flawed and you need to find your way out of this.
Some of you might have lived through this kind of experience before and if you have, you are familiar with the emotional storms typical of the situation, with the confusion that can paralyze you and I’m sure that when the avalanche of bad news caught you, you wished you had someone whom you could counsel with, a trustable advisor, someone who could help you out. The fact is: you have never felt that alone before!
In situations like this, the type of business, the competitive dynamics, the market, the nature of the problems, your moment in the career, your employability among other factors can differ substantially and cannot be neglected when defining what to do, however there are precautions and measures that can prevent the traps, minimize the damages and increase your chances of success. In this text, I narrate 2 distinct cases and the lessons extracted from them that I hope can be useful if you ever find yourself in a similar situation (or again!).
You were promoted to a much bigger and more important business in the company. You are growing in size, complexity and importance and your compensation followed suit. You are proud and happy with the recognition and you are aware of the challenges ahead. As soon as you take over however, you feel the bad smell and order an audit in the contracts, just to learn that there are serious financial issues that were not reported and threaten the future of your business. And it’s not only that: the situation is a lot worse than anticipated. The audit surfaced additional problems: operations are derailed, lateness is killing, on time delivery inexistent, receivables are crap, people are demotivated and the groups spend time blaming each other for the constant non-conformances and disruptions. Outside, the customers are familiar with the situation and don’t believe in the future of the business. As you could not speak with them before the announcement, you were not aware of their grim view of the situation.
After finding the dirt underneath the carpet you don’t waste time and start the fixes. With a lot of room to act you:
- Bluntly make the whole group aware of the situation;
- Make customers aware of the situation, negotiate a grace period and a realistic schedule of deliveries;
- Define priorities and implement the necessary changes;
- Improve transparency through a newly hired CFO, change people, structure and processes following your experience, knowledge and instinct;
- Submit and obtain approval of realistic budgets;
- Use the “hammer and nail” method to promote a cultural change;
- Case 1 describes a From a “sandbagger” you become a hero. After an ugly 1st year, the turnaround measures payoff and the business is back to profit. You are proud of your achievement and it leverages your career.
You are a newly hired and soon as you start you realize that you are in trouble! Not only you are not entirely familiar with the business and the company, what was not told you, or told otherwise, is that next year’s budget is over optimistic, there are gaps in the staff (skills and number), competitiveness is weak and changes require monastic patience due to the number of people involved in the decision processes. Contrary to your information, current financials are dire (but projections are bold!). You assume, at least, that the operational group is seasoned and knows their job managing the contracts. So you leave them alone for a period. You also proceed with the same key members of your staff, avoiding conflicts and clashes that would certainly happen if you “tamper” with them. But you know that you are walking on a thin line. Life goes on with frequent small bad news everyday, but you managed to avoid the spotlight. Time passes and the contracts you deemed good and well managed show their real faces in the form of surprising huge losses and delays. Now you are really in trouble, with no chances to escape unharmed. During the period you:
- Avoid conflicts and become a likeable new member of the company;
- Unite the unchanged staff members and make decisions (or not) based on the information provided by them;
- Avoid the sandbagger label, accept the pressure from the top and validate the sound projections and sky-high budgets;
- Lose fear of conflicts and start implementing changes after financials collapse;
- Case 2 describes a disaster. The strong bleeding stopped after the changes are implemented, but the financials never really recover. You lose traction and credibility in the company and the ugly issues you inherited are now associated with you.
Two cases, two distinct outcomes and good lessons:
Make the issues “public! Your management (and compliance sector, if it exists and there are compliance issues involved), employees and customers must and deserve to know the truth (not your truth!). The sooner the better. Be certain, accurate and honest. Draw a visible line between what is yours (future) and what is inherited;
There will be blood! Once you gave publicity to the issues, be prepared for the reactions, mainly if your predecessor is still around. Be bold If it spills over people you are related to or over the person who promoted/hired you. The consequences may be nasty for them and it can be specially distressing for you;
Be yourself. Don’t compromise! Follow your judgment and intuition and make the necessary moves quickly. Don’t accommodate things if that means waiting or maintaining the status quo. If you are not allowed to act, consider leaving;
If your level of authority is not compatible with the challenges, your moves can be slower than necessary! On the other hand, you will share the burden of decisions with others and it can make the journey lighter and affordable.
Have people you can trust (skills and personal values) in your staff! You will need support, accurate information and your directives will have to be rolled down quickly. So, you’d better have lieutenants who can make things move in the right direction;
Hire a new CFO/business controller!
Dig and you will find it! It does not matter if you had bad news or not, audit the business using outsiders, identify the time bombs, disarm them or be prepared for the explosion, if it’s unavoidable;
Transparency is key! “Garbage in, garbage out”. Information is not enough. You’ll need accurate information. Whereas information systems are crucial in a large and complex business and can make life a lot easier, people input the data. So, promote transparency through the right people;
Be honest and open with customers!
Once the storm has passed, the fixes start and you’ll need credibility. Maintain it by not overpromising to customers or to your management!