Managing a Turnaround: Leadership Requirements

It is not uncommon for new leaders to be hired or promoted with the expectation that they will turn things around for a business or operation. Turnarounds require leaders to make difficult decisions, “right the ship,” and make the business or operation successful again. It is critical for such leaders to recognize that the behaviors needed in these situations are very different from those used in a stable or growth-oriented environment. The personality and competencies of turnaround leaders should be well suited to navigating and taking on dramatic change in short periods of time, whether it is for a team, a strategic business unit, or an entire organization.

A turnaround usually involves reducing costs, such as by cutting staff or exiting non-core businesses and non-essential activities. In addition, most turnarounds require a sharpened focus on an organization’s core skills and products. Returning to what made the organization successful previously is usually the first step in restructuring for future success. New leaders in successful turnarounds often come from outside the company. As outsiders, they can bring a fresh perspective so legacy processes and allegiances do not undermine the rigorous decision-making that must be undertaken.

First and foremost, leaders of turnarounds must possess the courage to withstand criticism, the stomach to make personnel changes, the fortitude to stay the course, the head to stay above the chaos, and the vision to know when success has been achieved. These are extraordinary capabilities, and the job is not for the faint of heart. Second, new leaders must know that they will be standing alone at times, supported only by their manager. It is not unusual for people to be resistant to change. As a result, there is an inherent element of criticism or mistrust any time new leaders attempt to change existing conditions.

When undertaking a turnaround, leaders should consider the following actions.

Apply the right leadership traits.

  • Be bold and transparent in declaring that changes will take place.
  • Ask for support, but expect resistance.
  • Be forceful yet empathic.
  • Take charge and give direction.
  • Emphasize working with a sense of urgency.

Create a change coalition.

  • Identify quickly those you can rely on to execute the turnaround plan.
  • Maintain a tight inner circle.
  • Quickly deal with detractors or resistors.
  • Be clear about expectations, roles, responsibilities, and decision-making authority.
  • Be clear about maintaining veto authority.

Know what success will look like.

  • Identify what must change for success.
  • Create a vision using laser focus.
  • Create concrete plans with short timeframes.
  • Identify initiative owners of the plans and timelines.
  • Make obvious changes quickly.
  • Celebrate small victories to maintain morale.

Engage in war room execution.

  • Hold daily meeting updates on progress made toward identified goals.
  • Hold plan owners accountable for meeting milestones.
  • Know when to get involved to accelerate issues and when to stand back (use this as an opportunity to identify and develop people).
  • Revise the plan as necessary to meet the ultimate goal of saving the business.

Claim victory.

  • Recognize when success has been attained.
  • Celebrate the righting of the business or function.
  • Begin returning to a more stable operating environment.
  • Identify leaders to guide the next phase of the organization.

These leadership behaviors may come across as harsh or severe; however, when a business or function is on “life support,” there is little time for collaboration, reflection, or being overly empathic. It is a time for action, operating with a sense of urgency, and preventing distractions and low-value issues from interfering with a team’s singular focus on saving the business.

Turnarounds are among the most difficult leadership challenges. Leaders must have the willingness, courage, and fortitude for such a difficult task. If they do not, they are better off looking at other leadership possibilities. Not everyone can lead a turnaround, and many turnaround leaders cannot grow a business. Leaders in these situations must make sure the fit is the right one—both for them and for the organization.

Likability: The Most Common Hiring Mistake

When looking for the ideal candidate to fill a key position, it is common for hiring managers to identify a list of attributes they consider essential to being successful in the role. In addition to the technical skills required, this list of additional management and interpersonal characteristics is often so lengthy that no one, including the hiring manager, could possibly meet the minimum qualifications for the job. I often joke with hiring managers that if God herself walked through the door, she would not be able to meet the qualifications!

Having faced such stringent qualifications, why then do new hires often fail to meet the expectations of the hiring manager? It happens because, in the hiring process, the hiring manager becomes distracted by the candidate’s interpersonal skills or overall attractiveness. The candidate’s charm, wit, or quickness to respond in an engaging manner sidetracks the hiring manager or team from focusing on the candidate’s ability to do the job. In fact, candidates are often hired primarily on the basis of their likability and not on their ability to do the job.

In a previous article, “Making Decisions: Take This Principle to the Bank,” I argued for the importance of trusting one’s initial judgments, or “thin-slicing,” when making decisions. Thin-slicing is the ability to make judgments based on scant data, and it can be a very effective decision-making tool for routine business matters or issues. However, hiring decisions at senior levels are out of the ordinary, infrequent, and often more complex than routine business decisions. It is critical during the hiring process to avoid letting interpersonal engagement and congeniality trump capabilities and competencies. Remember that hiring decisions are less about the likability of candidates and more about their ability to get the job done. In Jim Collins’ book Good to Great, he observes that the most effective CEOs and leaders are often mild-mannered and humble. In fact, he states that some very engaging leaders need a “charisma-ectomy,” because their interpersonal attractiveness, charm, and magnetism can mask their lack of training, experience, or other critical skills necessary to be successful in the job.

In the case of hiring for significant senior roles in an organization, it is critically important for hiring managers to go beyond the interpersonal acumen of candidates to a deeper understanding of their competencies and aptitudes. This is not to say that having effective interpersonal and communication skills is not important. Rather, interpersonal acumen is only one of many data points to consider. In fact, because hiring managers can easily overlook the actual capabilities individuals bring to their candidacy as a result of their appeal, it is important for these managers to take an even more stringent look at those to whom they are immediately attracted. According to Dr. Gordon Patzer, who has conducted three decades of research on physical attractiveness, human beings are hardwired to respond more favorably to attractive people. There is a bias that attractive people are generally more talented, kind, honest, and intelligent than those who are less attractive.

On the many occasions I have evaluated competing candidates for senior positions, the hiring managers frequently want to hire the candidate they find most interpersonally appealing. When we discuss the interviews, assessment results, job requirements, and organizational fit, we often find that the most likable candidate does not always have the capabilities necessary for long-term success. This attractiveness bias can prevent managers from looking beyond their initial impressions of likability to more lasting and important facets of candidates’ capabilities and skills.

In summary, trusting one’s instincts and thin-slicing can be effective tools for making decisions that are routine and uncomplicated. However, when hiring for high-level or critical positions, hiring managers must consider more than their initial impressions, recognize their unconscious biases, and take a deeper dive into understanding those competencies most critical to the success of the position. Doing so will help produce better outcomes for all involved.

Making Decisions: Take This Principle to the Bank

When executives take too long to make important business decisions related to hiring, promoting, or terminating employees, I commonly hear them lament, “I should have done this a long time ago!” This sentiment is especially true when executives deliberate awhile when dealing with employees who have been underperforming or behaving poorly, in spite of the manager’s best efforts to help them change. After mangers decide to let an employee go, it is rarely the case that they look back and think the employee should have been given “one more chance.”

Whether a manager is bringing someone on board or letting them go, there is often regret that the decision was not made sooner. The experience of both relief and regret occurs when executive business decisions are finally made after exhaustive analysis and lengthy deliberation. In both instances, colleagues and employees who have seen executives finally take action say (or think), “It’s about time,” or “What took them so long?”

Why do executives seem to take so long to make decisions that often seem obvious to others? They are overlooking the most basic psychological principle that defines human behavior: The best predictor of future behavior is past behavior. People are creatures of habit. The behaviors we demonstrate on a regular basis often originated in childhood and therefore are deeply ingrained in our identity and psyche. As a result, we are typically very predictable, particularly in the interpersonal world of work. Deeply ingrained patterns of behavior are what leaders fail to recognize when working with those closest to them. Such leaders’ relationship with, or investment in, the person or issue distorts their judgment and prevents them from taking action on a decision that seems obvious to everyone else.

In Blink, Malcolm Gladwell discusses another psychological principle called “thin-slicing.” Thin-slicing is the ability to make decisions and inferences based on only scant, but salient, information. This thin-slicing is really pattern recognition, which allows people to see patterns or regularities in data. Results from experiments have determined that judgments made on the basis of thin-slicing can be as accurate, or even more accurate, than those based on more in-depth information. This phenomenon can be explained by the fact that we have an internal history of similar situations or interactions to draw on when making quick judgments. Although these judgments may seem almost instantaneous, they are related to our past experiences. When executives “drag their feet” to make personnel decisions, it is often because they are allowing subsequent information about a person or situation to interfere with their ability to use their instincts or pattern recognition to come to a decision. In other words, they doubt themselves and their skills of perception.

Of course, other psychological issues can interfere with a manager’s ability to “pull the trigger” on either hiring or terminating employees, or making difficult decisions about the business. At all levels, managers tend to procrastinate when making difficult decisions or holding people accountable. Whether this stems from such managers being perfectionists, averse to risk, or cowardly, or from a desire to please others and be liked, the end result is always the same: Once a difficult decision has been made, they nearly always feel a sense of relief about having made the decision and an accompanying sense of regret that they did not make the decision sooner.

By adding thin-slicing to our management arsenal, we can become much more effective and timely decision-makers. Thin-slicing enables us to trust our instincts and recognize that the best predictor of future behavior is past behavior. The less internal data we use, the more likely we are to rationalize our indecisiveness; and the longer we wait to make difficult decisions, the less likely we are to trust our own judgment. By recognizing that our internal observations, intuitions, and emotions are important considerations, we can make decisions more quickly and with greater confidence than when we ignore them.

In summary, when faced with making a difficult business or personnel decision, remember to:

  1. Recognize the wisdom of your first impressions about the person or situation.
  2. Keep in mind that the best predictor of future behavior is past behavior.
  3. Make decisions, or have difficult conversations, sooner rather than later.

As more companies and employees work at a rapid pace and with an increasing sense of urgency, it is more important than ever to match the pace of your decision-making to the pace of your company. Is there a decision you have been delaying or rationalizing? You probably know exactly what to do. Go for it!

Leveraging Leadership: Effective Delegation

One of the country’s preeminent executive coaches, Marshall Goldsmith, wrote a book with a title that says it all: What Got You Here Won’t Get You There. Goldsmith insightfully describes that being in an executive management role is not simply “doing more of the same,” but is really making a step-wise difference in how you behave. Chief among these behavioral changes is moving away from doing things yourself to working through others to magnify your impact. In my work with executives who have successfully made this transition, they make a distinction between delegation as a means of simply getting more work “off of their plates” and delegation as a means of leveraging their particular leadership capabilities through others. This latter means of delegation affords them the mental space they require to think about broader company issues, while also enabling them to be intentional about developing their people. The most successful executives are intentional about simultaneously having a strategic impact regarding succession planning. They know how to increase the influence of their leadership through delegating for development and results. They make a major differentiation between simply redistributing work and using work assignments for growth opportunities. They are intentional about determining who should work on key assignments, who should represent their department on company initiatives, and who is willing to step up as opposed to being content with the status quo. In order to become intentional about successful leadership delegation, there are a couple of key areas to consider:

  • Ensuring Quality versus Simply Micro-managing: Executives who have risen in the organization have done so on the basis of their hard work, creativity, and, most importantly, their results. They are consistently competitive with themselves and push themselves to produce high-quality work that also pleases their managers and moves the organization forward. When they move into management ranks, they know they can trust their own work products but do not always trust the work products of others. This need to control is a common remnant of having been rewarded for their work and it creates a natural caution when allowing others to do the work for them. Will the work product be of as high a quality? Will the results be delivered on a timely basis? Will it all get done or will it only be partially completed? This inherent desire to be sure that the work product of their group is equal to what they would have done on their own is a natural, but misguided, tendency. If they do not overcome this tendency, either they will not delegate and end up doing the work themselves, or they will hover over those to whom they have delegated, inadvertently frustrating and undermining their employees. Such managers can create employees who are dependent followers who are unable to think for themselves, or they will experience an exodus of good employees who are more ambitious and creative. They will then wonder why they are left with a team that is only average as opposed to high-performing—a truly self-fulfilling prophecy!
  • Empowering versus Benign Neglect: At the other extreme, there are managers who are willing to delegate but unwilling to hold their employees accountable. Recent management theory has encouraged managers to “empower” their employees to work independently on company issues and initiatives. In my work interviewing executives, many are quick to acknowledge that they empower their people, indicating that they trust them. Unfortunately, their interpretation of empowerment often means benign neglect—the manager “throws the work over the fence” and their employees do, or do not do, the work with little or no guidance or oversight. This can also suggest that the manager lacks the discipline to ensure that the work is being completed, preferably in a timely manner and with a high-quality outcome. Employees of managers who are guilty of “empowerment by benign neglect” often complain of lacking direction and experiencing frustration that there is little distinction between good work and mediocre work being done. Employees begin to lose motivation and become subject to poorer productivity and lower morale. The lack of attention to the employees’ work and the lack of differentiation between good and mediocre work are all signs of managers who are too distant from their employees and often reluctant to have difficult conversations to hold employees accountable. Once again, the good and highly motivated employees leave and the mediocre employees stay behind.
  • The Leveraged Leader—Delegation as Development: Effective leaders recognize that to delegate effectively they must have a uniform process for all of their employees. Ensuring that the delegated work product will be of high quality, with a satisfactory amount of attention devoted to it, and completed in a timely manner is the sine qua non of delegation. Dr. Gerald Kraines of the Levinson Institute has coined a formula for effective delegation: QQT/R—Quality, Quantity, Timeliness/Resources. For all delegated work, the manager must specify expectations regarding the quality of the work, the amount of work to be completed (e.g., how much analysis is enough) and the expected timeliness of the work product. It is the manager’s responsibility to ensure that the employee has adequate resources to get the work completed. Equally important is that the manager follows up, holds people accountable for their work products and provides rewards, when appropriate. Once these expectations are put in place, managers must have a strong working knowledge of their teams in order to choose wisely to whom they will delegate and, most importantly, why. Delegation can be a tremendous opportunity for employee growth—to stretch an employee, to introduce an employee to a new area of work, or to test the skills of an employee. When managers take a longer-term view of their organizations and are intentional about the development of those on their team, they will be able to multiply their impact in the organization now and in the future. That is the true leverage a manager can have through becoming intentional in delegating work and responsibilities.

Clearly there is a balance between those times when the manager needs to be more involved in order to guarantee that the work is done according to specifications, and those times when the manager can adopt a more laissez-faire attitude. In both cases, the versatile leader will be intentional about the work he or she is delegating, why it is being delegated, to whom it is being delegated, and explicit about expectations (QQT/R). In addition, the leveraged manager will be consistent in holding employees accountable for their work while managing employee development and getting quality results. The ultimate objective is to multiply your impact on the organization through your people. Ask yourself these questions:

  1. Do you use delegation as a means to lighten your load or are you intentional about developing your employees through targeted assignments?
  2. Are you making the greatest impact in your organization through the development of your people?
  3. Are you matching employee needs with employee assignments?
  4. Are you applying the correct amount of attention relative to the criticalness of the issue and the capabilities of your employees?
  5. Are you seeing unexpected defections of key employees for opportunities elsewhere?
  6. Are you seeing more people request positions in your organization than you have openings (a sign that you are a leader who promotes employee development)?
  7. Are employees in your organization being sought out to participate in key assignments (a sign that they are being developed)?
  8. Are you devoting the time that you have gained through delegating to higher-level issues?

Paul Ryan’s Candidacy: Anatomy of a Negotiation

In the vacuum created by the resignation of John Boehner as Speaker of the House, Congressional Republicans have scrambled to find a replacement in a very contentious and divided Republican Party. At a time when the Republican Party’s decision-making is over-influenced by the so-called Freedom Caucus, a group of 38 (out of 435) Representatives who vote together in a unified but radical block, finding someone to both unite and represent the broader interests of the party (and the country) has been a challenge. The first candidate for the Speaker of the House position, Kevin McCarthy (R, CA), dropped out of consideration because he believed that he did not have the support of this group and did not want to risk just “squeaking by” if elected. In attempts to find a person who could represent the interests of the whole party, including this powerful splinter group, Paul Ryan (R, WI) was asked to consider being a candidate for the position.

Ryan’s initial response was that he preferred to remain where he was, as chairman of the powerful House Committee on Ways and Means, and he was not willing to be a candidate for the Speaker position. However, Ryan was asked to reconsider after McCarthy stepped aside. Regardless of your political persuasion, Ryan’s approach to ultimately accepting candidacy is a unique and dynamic view of executive negotiation.

Any time you are the pursued, and not the pursuer, you have greater negotiating power. How you use that power, the parameters of your demands, and the tolerance of the pursuer are the fodder of negotiation. During the negotiation process, there are typically three steps to getting what you want or walking away, as Paul Ryan demonstrated.


Ryan began the negotiation process by not showing any interest in the position. He did not “raise his hand” to embrace the opportunity. In fact, his response to Boehner’s announcement was rather nonchalant. This apparent indifference to seeking the position created a platform for Ryan to be in a stronger negotiating position than if he had sought out the position, as did Kevin McCarthy and Daniel Webster (R, FL). Ryan knew that, once you appear interested, you immediately reduce your ability to negotiate. Anyone who has ever bought a car can relate. Car salesmen know that the very fact that you have taken the energy to show up at the car dealership means you are interested. They have an advantage from the moment you say “hello.” Sociologist Willard Waller coined “The Principle of Least Interest” with reference to who has the power in such interpersonal relationships.

The second, and equally powerful, negotiating tactic used by Ryan was to respectfully decline to be a candidate when party colleagues initially approached him about doing so. This indifference by a seriously viable contender only heightens the intrigue of and interest in him or her. In Ryan’s case, this dynamic continued to strengthen his negotiating position. Finally, when party members kept urging him to be a candidate, he agreed that he would but only under certain circumstances, which was when the real negotiations began!


Going into any negotiation, there is usually some understanding that neither party will get everything it wants. Regardless of the specific desired outcomes, there are limits to what you will ultimately get or give away in order to consummate the deal. Of course, there is always the possibility that one or both parties will walk away, after which there is no negotiation. The area between these extremes is where the back-and-forth negotiation takes place—and involves your concession strategy.

In negotiating, the research is clear that the first one to make a move defines the parameters of the negotiation. This is called “setting the anchor” and is based on the work of Galinsky & Mussweiler (1). According to their research, when a negotiation takes place, whoever makes the first offer (the Anchor Point) obtains a better outcome than if he/she had waited to hear what the offer was. The Anchor should be aggressive but rational. Once Ryan determined that the Speaker’s position was one he would consider, he was quick to “set the anchor.” He determined his Target Point—his ideal outcome and aspiration. He also determined his Walk Away Point—the point at which those items critical to him would not being met. The details of the negotiation then began in earnest (2).

Ryan’s Target Point was that the Freedom Caucus would endorse him and that they would roll back a procedure allowing lawmakers to overthrow a sitting Speaker. Ryan knew that he needed to broker a truce between disgruntled conservatives and a GOP desperate for the unity needed to get the House back on track. After eight years of very low approval ratings, he knew that he needed to once again enable his colleagues to be relevant and moving forward. His Walk Away Point was that he would not be in Washington, D.C., on the weekends, as had previous Speakers, but would be spending the weekends in his home state of Wisconsin with his wife and three children. The enormity of the Speaker’s position has required that the Speaker work weekends to represent the party, broker deals, and generally be present in Washington. However, Ryan would not accept the position at the expense of his family. The area between the Target Point and the Walk Away Point was where there was room for concessions and compromise.


So how did Ryan fare with his concession strategy? The Freedom Caucus would not endorse him, but they did support his candidacy—a concession that was not given to Boehner. Ryan was then able to soften his position from eliminating the rule on overthrowing the Speaker to simply “changing” the rule. However, no one challenged his Walk Away Point and, for now, Ryan will be going to Wisconsin to see his family on the weekends. Thus, Ryan negotiated successfully the major concessions he was willing to make, while preserving that which was the most important to him—time to be with his family. At this point, it seems as if his candidacy is assured and that he will become the next Speaker of the House.

In summary, we have been able to witness the selection of the next Speaker of the House, a position that is third in line for the presidency! In the process, we have seen how someone at the executive level negotiates, compromises, and finally arrives at an arrangement agreeable to both the “buyer and the seller.” The process for effective negotiation includes:

  • Maintaining the right approach in the initial pursuit and not giving up power by appearing too anxious or needy.
  • Setting the parameters for negotiation by:
    1. Knowing ahead, and clarifying, your Target Point and your Walk Away Point.
    2. Setting the Anchor Point early
  • Leaving room for making concessions and always pushing for your goal without relinquishing what is most important to you.

By having a negotiation strategy in place prior to beginning, your chances for getting what you want are increased dramatically.

(1) Adam Galinsky & Thomas Mussweiler. “The Role of Perspective Taking and Negotiator Focus.” Journal of Personality and Social Psychology, 2001, Vol. 81. No. 4, 657-699

(2) Joe Hernandez. “Negotiation Mastery Cloudbook.”