Media Spotlight: Turnaround Leadership

21 March 2011 | By Samuel Dale

In the same way that the Christian calendar divides dates before and after Christ’s death everyone in finance speaks about pre-crisis and post-crisis worlds.

The pre-crisis world is remembered as a period in which a kind of blameless uncontrollable madness gripped the mortgage industry that has now dissipated. In the post-crisis world the talk is less about growing at ferocious speeds and more about building steady, sensible businesses.

Hindsight is wonderful but it makes you wonder why this wasn’t the case prior to 2007 and 2008’s financial shocks. Retrospection is useful to learn from previous mistakes but there comes a time when results must be delivered again.

In Turnaround Leadership Shaun O’Callaghan describes how to pick up the pieces and start rebuilding. First he makes the point that when crises hit a leader must react instantly to get their business through the next few days.

He says that often businesses with historic planning methods struggle to make this rapid adjustment but it is crucial to survival.

The author highlights the MP expenses scandal as a way in which organisations can make a crisis worse by not having a quick plan in place.

He says rebuilding trust with the public can take months, if not years, but there needed to be a short-term plan to stop the crisis worsening.

For the mortgage industry the heat of the financial crisis has largely passed and fears of the banking system imploding have mostly gone.

And yet many had to take rapid decisions to keep their businesses going from day to day as the economic situation deteriorated throughout 2008 and 2009.

If a business leader survives the initial danger of a crisis they must move on to dealing with long-term problems. There is a temptation to take immediate and drastic action but O’Callaghan argues that long-term changes require insight and foresight.

Taking the time to consult stakeholders, from investors to staff and suppliers, makes a massive difference.

Their views will be crucial to rebuilding and offer a fresh perspective to problems that need resolving. Naturally the most important people to consult are customers to find out how your business is viewed after a crisis.

Is it still credible and trusted? How damaged has the brand been by the problems? Legacy issues of a crisis must be fully understood to comprehend the impact it has had on a brand.

After diagnosing the problems action can be taken to rectify them. These could be external such as the economic cycle or internal, as in product recall, litigation or management scandal.

O’Callaghan then offers a staged plan to turn the business around in a post-crisis world - something many in the mortgage industry are dealing with right now. This includes building cash flow, restructuring costs and maintaining sales throughout the changes.

There’s nothing revolutionary about this plan but it reminds business leaders of the basics in a recovery.

After almost four years since the start of the financial crisis the mortgage industry knows there is no short cut to recovery. It is a long hard road and each business that survives needs strong leadership and a detailed plan.

Turnaround Leadership offers coherent and pragmatic advice on how to do exactly that.

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