Critical Care for Companies®
Turnaround Step 5 : Project Management & Your Turnaround Team
Why you should read
Project Management has been called the "premier skill" necessary for
success in the 21st century. This section introduces this critical
skill in the turnaround process
Quickly and effectively executing the turnaround strategy you will
soon be developing is essential to having a successful turnaround.
This section outlines the key tools, processes, and team members
necessary to "get things done ASAP"
vision without a task is but a dream; a task without a vision is
drudgery; a vision and a task is the hope of the world"
---From a Church
in Sussex, England, C. 1730 AD---
Management, the Premier Skill
In 1992, the visionary
business guru Tom Peters wrote in Liberation Management that Project
Management was the "coming" premier skill necessary for business success
in the future.
Project Management is
the business discipline that deals with getting things done…within
specification, budget, and timeframe. People often think of Project
Management as necessary only for large construction projects or major
information technology installations. However, this discipline is
critical to save your business.
You could literally
spend the rest of your life studying this knowledge area and never read
all the books and publications in the field, as it is so vast. One of
the books in my library on this topic is close to 1200 pages long!
Therefore, in this section of the Critical Care for Companies®
Turnaround Program I will focus on the absolutely few essentials
necessary for a solidly managed project.
10 years ago, I
decided to devote time to an in-depth study of the best practices in the
field of Project Management. Rather then first studying successful
projects, I focused on projects that were considered failures. Why did
these projects fail? What were the common chrematistics of failure
projects, etc. Out of that study, I determined that projects usually
fail for one or more of 10 consistent reasons. I then developed a
Project Management methodology based on addressing each of those 10
reasons for failure. This model has been field tested in a number of
Fortune 500 organizations with very complex operating environments…and
My purpose here is not
to present the entire model as that would require a separate website and
is not necessary for your success. I will however give you the bare
essentials to successfully organize and manage your turnaround project.
I will make the
assumption that you (the owner, partner, or senior executive of the
business) have made the decision to turn the business around on a
"do-it-yourself" basis. And that is really the focus and purpose of this
site…to assist you in doing that.
There must be a point
person to spearhead the turnaround. That person must have the leadership
skills presented in Step 1 of this program. Perhaps most importantly,
this person must be able to handle crises and work well under pressure
and to demand absolute accountability from other team members in terms
of deliverables. This person must be carefully selected for obvious
Other Internal Team
Members Necessary for a Successful Turnaround
The point person will
need a small team to assist in the execution of the turnaround strategy
that will be developed via the diagnostics stage. This group will
usually come from the senior leadership team of the business
(employees). In addition to the team members' domain expertise
(marketing, operations, engineering, etc.), other necessary qualities
are creative problem solving, an ability to get things done fast and of
course loyalty and committed to the cause. Both the overall chemistry of
the group and group dynamics are also important, as you will be spending
many hours together and want to minimize conflict.
In my turnaround
experiences, I have found that many times an external financial
consultant must be retained for the project. Typically, the financial
types employed by the business are very good at preparing financial
statements and tax documents but simply have not been trained in the
area of financial analysis. Many in this field are past view oriented
rather then future oriented. It is like trying to navigate your vehicle
by looking in the rear view mirror! If your current accountant or chief
financial person is not skilled in financial analysis or management
accounting, then you will need assistance in this area.
I strongly recommend
that you retain the services of a good attorney with experience in
workouts and bankruptcies. Think of this person as an insurance policy
during your turnaround. You will be walking through a "mine field" of
issues and making the wrong decisions can literally land you in jail. I
know a good lawyer is expensive but they will be worth the investment.
Dr. Arnold S.
Goldstein, author of "The Business Doctor" has some pointed comments
about lawyers and accounts during the turnaround
You will invariably
need an attorney, even if it's to forestall and defend creditor suits
and to threaten your creditors with bankruptcy if a more pleasant and
cooperative workout is unsuccessful
Few attorneys are
skilled in rehabilitating troubled companies. Real estate, criminal
and probate lawyers, who wouldn't know a balance sheet from a
cash-flow statement, too frequently get involved in complex business
and insolvency cases
Hire an attorney
well experienced in saving troubled companies. You need a legal
gunslinger who knows every trick and strategy to defend you and your
beleaguered company from your numerous foes.
I fire accountants
who do not help our mutual clients to financially manage their
business. We regain credibility and creditor confidence only when new
accountants take the financial controls. Replacing accountants is
absolutely essential when your accountants helped conceal your poor
corporate condition through manipulative accounting
accountants if they were too slow to alert you to your declining
only prepare neat balance sheets, but won't tell you how untidy those
numbers really are, do not belong on your turnaround team. You must
have somebody who thrives in the world of cash flows, cost analysis,
break-even projections, forecasting and budgeting.
In addition, you may
need to retain, on a short-term basis, other business specialists such
as Asset Liquidators, Sales & Marketing experts, Manufacturing
consultants, etc. Additional needs will become clear as your team goes
through the diagnosis stage of the turnaround and creates the
strategies. As you develop the turnaround plan, gaps in expertise needed
to execute the plan will become clear.
Management Tool Kit
I have found that the
4 most critical tools necessary for a successful project are:
The Project Plan
The Project Plan
First, let's be clear
on terminology as we discuss the project plan.
Strategy, Goals &
There is a great
amount of confusion around these terms. Just to be clear, this is my
definition for each.
Goals & Objectives
are synonymous…they mean the same thing. They are the target. What you
are attempting to accomplish. An example would be: Achieve a positive
weekly cash flow of at least $1,000 by June 30, 200_.
is a general method for achieving specific objectives. It may describe
the essential resources and their amounts, which are to be committed to
achieving those objectives. An example of a strategy is: Get to a
positive cash flow (the Goal) by flattening the organizational structure
and laying off 15 employees.
are the individual steps required to carry out the strategy so that the
goals are attained. One step, as an example, that would be part of the
above strategy is to develop a Reduction in Force (RIF) analysis.
Each task has the
Clearly defined work
that must take place
At least one person
assigned to the task to ensure completion
Date the task will
be completed by
There are literally
dozens of other information pieces you can track related to tasks. Open
up any of the more popular Project Management software program such as
MS Project and you will be overwhelmed with the tools and details
This is over kill for
our purposes of turning around your business!! Use the following format,
put into MS Word or MS Excel (you can track tasks on a legal pad if you
are computer challenged).
That is all you need
for a well constructed project plan.
An issue is simply an
event that has emerged which may prevent you from completing a task,
strategy, or goal. For example, let's say that you have completed the
RIF analysis and discovered that by implementing the plan you will
not accomplish your goal of a $1,000 positive weekly cash flow but
will still be in the red. That is an issue. Therefore, to resolve the
issue, you must go back to the planning stage and develop additional
strategies. These issues must be tracked as they emerge. Again, track in
MS Word or MS Excel.
The format is:
This is like a radar
system which is always scanning the horizon looking for possible risks.
As an example, let's say you have identified one particular employee to
lay-off but you have also discovered that this person has a history of
taking legal action against previous employers. Before you proceed with
the lay-off, you should assess the risk and determine if you will need
to develop a risk mitigation plan to eliminate or minimize that risk.
The format for the Risk Management System is:
(Red-Yellow-Green system works well where Red indicates the
probability of mitigation is low and it is a "show stopper", Yellow is
critical but mitigation appears feasible, Green is a risk that bears
watching but appears to have been turned around)
Risk Mitigation Plan
Status (as of the
Date Needed (to be
Finally, I would
strongly urge that you set up a Project Notebook to keep all of the
necessary project documents, plans, budgets, etc. organized. I use a
large 3 ring binder with 30 dividers or tabs. Under one tab will go the
project plan, another tab the Issue Resolution System, etc. The 30 tabs
will give you adequate organization for all of the project artifacts. I
am continually amazed how this simple system aids in staying organized
and on top of the project.
And there you have it.
All you really need to know about Turnaround Project Management and your