Masters of Disaster

Henk Bremer

Founder and director
Cap Gemini Ernst & Young Management Sourcing BV
Utrecht, The Netherlands

Find out what the existing management team thinks of the situation. How severe does it consider the crisis to be? How committed is the team to initiating, or to going along with, radical change? It's normal for existing managers to think that the crisis may not be as bad as it truly is. But if someone is vehemently opposed to your presence, take it as a warning sign.

Here's the most important thing that you need to understand from the first day: You are in a fishbowl. People will watch your every move and will react. Be prepared to explain what each decision that you make is expected to do for the company's health.

As you undertake a turnaround, make sure that you have a "shadow manager" -- a person who can act almost as a coach would, who can help you think clearly, and who will stick with you as you do your job. Doing crisis management often means curing a sickness that has left behind clouded visions and sluggish people. It's a tall order. Don't try to do it alone.

If you decide to fire people, remember that firing someone sends a very strong message: It will affect how people inside and outside the company view you. Don't fire anyone unless you're sure that the person either is damaging the company or clearly is not able to contribute to the effort to save the company.

Henk Bremer (henk.bremer@capgemini.nl) founded and now leads Cap Gemini Ernst & Young Management Sourcing BV, which places "turnaround managers" in troubled companies for temporary engagements. Cap Gemini Ernst & Young, the parent company, is a management and IT consulting firm based in Paris.

Linda Sanford

Senior vice president and group executive
Storage Systems Group, IBM Corp.
Somers, New York

Go out and listen to a customer -- in person. That's the first thing you should do. Because if you're going to build a turnaround strategy for your company, it had better be created around what your customers actually want and need.

Talk to happy customers; talk to unhappy customers. Find out what's going on in their industry right now. Find out what their concerns are. Knowing where they stand and what they would like from you will put boundaries around your problems. It will help you adjust your strategy so that, as you move forward, your plan keeps up with the market.

In those conversations, give back. Tell your customers what's going on with your company. They know when your company is having problems. If you keep them informed about what you're planning to do to fix those problems, they're much more likely to stay with you.

You can't go wrong if you keep the customer in mind.

Linda Sanford is currently the senior vice president and group executive of the IBM Storage Systems Group, an organization that develops and markets IBM's enterprise storage server (ESS) as well as other open-storage, networking-related hardware and software. In the early 1990s, Sanford guided the company's S/390 division through a comprehensive product transformation -- reinventing the S/390 as an open, enterprise-level server for e-business applications.

Gordon Eubanks

President and CEO
Oblix Inc.
Cupertino, California

Companies don't often get into "crises" in the real sense of the word. When you walk into a situation that requires a turnaround, usually what you find is a lot of internal bickering, people debating endlessly without actually making any decisions (or people making only safe decisions), a general lack of confidence, and a very low energy level. You're going to see the molasses of indifference. It's crippling, all right, but it's not a life-or-death-in-an-instant situation.

As the new CEO, you don't have to take some sort of "look at me" drastic action. Too many people step into a turnaround and feel as if they have to fire a lot of people in their first 30 days to make some sort of statement. But when I hear that someone has done that, I say, "So what." That by itself won't help the company.

What you need to do is align people. Focus them on a goal that will take them forward out of the mire. You need to get the senior-management team concentrating on customers and competitors. And you need to get them focused on what the organization does well. You need to say, "Of all the possible battle-fields, let's figure out where we have the best chance of winning and why we feel that way. Then let's move in that direction." You need to say, "We're going to spend much less time debating decisions and much more time executing those decisions." Then you need to do it.

Strategy gets you on the playing field, but execution pays the bills.

Gordon Eubanks is president and CEO of Oblix Inc., a Cupertino, California-based company that builds software infrastructure to help clients use the Internet for business-to-business e-commerce. From 1984 to 1999, Eubanks was president and CEO of Symantec Corp. He's credited with turning that company into a leader in the utility-software market.