Insights
SUCCESSION PLANNING in private or family businesses is sensitive and can be traumatic. Unlike engagements in public companies where professional leadership is the norm, the aspirations, legacy, commitment and personalities of the founders or family members must be taken into consideration. Afterall, you are coming in as a stranger to take over all aspects of leading their dream into the future.​ More than anywhere else, it is vital to listen and learn from the family. ITS A RELATIONSHIP THING. At Thai Stair Company in Bangkok, with a host of very exciting companies including designing and manufacturing building materials, adding value to agricultural produce, formulation of specialty consumer beauty and food and health supplements, it also necessitates a broad understanding of portfolio management. Of particular prominence for me has been the roll-out of the modular housing company to address house shortages with rapid to assemble, high quality, innovative designs at low cost.
Don't ignore the experts. One thing I encounter, not often, but from time to time, is a death knell for growing private companies. It is when a founder CEO, struggling to control growth, hires experts, either employed or consulting, then proceeds to ignore them believing he knows better. It is a sign that the CEO was really trying to hire someone who agrees with him, in other words yes men. An example is hiring a marketing guru then expecting them to just make your marketing plan better, not accepting that your marketing plan is what's wrong.​
​A turnaround CEO knows how to solve that problem.
Governance, invented by James Watt to control the speed of his steam engines, is a feedback mechanism. Control is established when a part of a system reports to and is accountable to another part. The CEO reports to and is accountable to the Board of Directors. When the CEO is also the Chairman of the board, they are reporting to themselves, so all control and accountability is lost. ​
​A turnaround CEO recognises this as a problem.
Market research. It is not unusual for an inventor or entrepreneur with a novel business opportunity or a company founder to believe that the whole world will be as enamoured with their creation as they are. Being too close to the trees to see the forest means they don't contract, or worse, ignore, independent market research preferring their gut feel.
A turnaround CEO always determines market size from independent market research.
Closely held companies. At times a founder accepts funds from public investors to pay for the growth of their company, who now are co-owners, and then continue to run the company as if it were still their own. Such tightly held companies generally grow slowly, fail to prosper and offer limited shareholder opportunities.
A turnaround CEO will establish governance and management decision making structures in such companies to remove micromanagement by founders.
Check everything. The pages of The Vandemonian are absolutely full of amazing insights, lessons, innovations, that Allan uses in his company turn-around engagements. Absolute gems some of them.
A turnaround CEO will always question the established methods.
The board of directors is the highest authority in any company. What the board says goes. A good CEO is only as good as their board.
A turnaround CEO will always ensure a strong and healthy board.