What to Look for in a Turnaround Leader

In today’s rapidly changing and competitive business landscape, companies constantly face challenges that can impact their profitability and long-term sustainability. Whether it’s increased competition, changing market conditions, internal situations, inflationary pressures or supply chain issues, businesses need to adapt quickly and effectively to stay ahead. However, sometimes companies can find themselves in a situation where they are struggling to stay afloat and need to make significant changes to turn things around. In such cases, hiring a turnaround leader can be a smart move. In this article, we will explore some of the key reasons why companies may need to hire a turnaround leader, and what qualities and skills to look for to ensure a successful transformation. Whether your company is facing internal challenges or external threats, understanding the role of a turnaround leader can help you make informed decisions and set your organization on a path to success.

What is a Turnaround Leader?

A “turnaround leader” (TL) is one who initiates and leads a transformation in order to improve your organization’s profitability, product performance, or overall business performance. In other words, it’s the person who uses his or her individual talents, qualities, and expertise to empower your organization’s employees and lead it from stagnation or imminent failure to prosperity. 

Successful turnaround leaders are especially attuned to the unique challenges of organizations needing drastic change, not merely minor adjustments. For this reason, they are expected to be adept at working under a wide range of pressures and their leadership style should be adaptable to the circumstances of each situation.

How Do They Do It?

Since every company’s challenges are unique, a successful TL should be capable of sniffing out where the problems lie and dealing with them in the manner they require. However, you’ll find some strategic commonalities when you research companies that have successfully rebounded  from near-failure with great TLs at the helm:

• They promote dialogue. One of the universal problems that faltering companies encounter is a breakdown of communication between employees and managers and/or different departments. A good leader will reestablish those lines of communication.
• They create a culture of respect. Turnaround leaders don’t play the ‘blame game.’ They are more interested in change than they are in pointing fingers and doling out recriminations.
• They generate collaboration. True leaders don’t recognize the ‘us and them’ mentality that often exists in struggling companies. Rather, they encourage all employees and departments to think in terms of ‘we’ and problem solve together.
• They inspire initiative. TLs enable employees at every level to contribute to the company’s success and encourage them to come forward with their ideas and innovations.

What Competencies Does a Great Turnaround Leader Possess? 

While no ‘one size fits all’ turnaround leader exists, success in this avenue does usually involve some specific competencies. Let’s break those down:

• Specific Skills – A TL should have top-notch business skills as well as technical skills in areas where the company is most lacking. When an organization reaches the stage where it requires a turnaround leader, it will need to find someone with the skill set to press ‘reset’ on its performance.
• Strong Attention to Detail – The reasons why any organization might be failing are likely intricate and connected, so attention to detail is vital. Companies will need more than a broad-strokes approach to solve myriad and complicated problems.
• Humility – While leaders need to be strong, confident, and determined, humility is the attribute that keeps those qualities from morphing into arrogance. As company turnaround specialist Nick Alexander explains, “If the turnaround is all about the leader rather than the organization, then success, if it comes at all, will be short lived.”
• People Skills – ‘People skills’ refers to the leader’s ability to communicate easily, to navigate other people’s feelings, and to provide an open-door policy—without sacrificing accountability for popularity. Without people skills, leaders can’t inspire the confidence in others that is absolutely necessary to instigate lasting change.
• The Ability to Motivate – According to Harvard Business Review, a successful turnaround leader restores employees’ “confidence in themselves and in one another,” which is a “necessary antecedent to restoring investor or public confidence.” When an organization is on the brink of failure, a good TL knows how to motivate the team to keep going and not give in to the frustration that often accompanies its struggles.
• A Drive for Results – A true TL focuses on results, not methodologies or procedures. They are open to new ideas, innovations, and any strategies that drive the desired outcomes. Specifically, they focus on sustainable results, as the whole point of their efforts is to foster lasting transformation and a continuous upward trajectory.  

How Do You Find The Right Turnaround Leader?

As discussed, a turnaround leader should demonstrate certain competencies, but how will you know who has them? Following are some tips for choosing the right TL for your organization:

• Make sure that your candidate exhibits an authentic belief in the company’s potential for success, regardless of the size of the challenge ahead.
• Check their track record. Has your prospective leader demonstrated their impact and influence on other companies that were in similar circumstances?
• Watch them in action. Give your candidate the opportunity to interact with your team during the selection process. Does he or she show an aptitude for inspiring confidence and cooperation in team members and other leaders?
• Find a way to test the potential leader’s analytical and critical thinking skills. (Numerous reputable assessments are available to do so—you can find a good one with some simple research.) Analytical and critical thinking are two crucial skills a leader will need to have in order to facilitate a successful company turnaround.

Michael Fullan, author of Leading in a Culture of Change, states that “You can’t talk your way out of what you’ve behaved yourself into.” When your organization’s ‘talk’ has become unproductive and has started to affect its ‘walk,’ you may need a turnaround leader to catalyze the lasting change that will successfully take you into and beyond the next decade.