Deloitte: Turnarounds and Democracy Don’t Mix
April 26 (Bloomberg Law) — William Snyder, co-head of the corporate restructuring group at Deloitte, talks with Bloomberg Law’s Lee Pacchia about a new survey his group conducted on executive management during corporate turnarounds or bankruptcies. Deloitte asked 1200 professionals from a wide range of industries on the dynamics of addressing change in turnaround management.
The vast majority of respondents stressed the importance of communicating with vendors, lenders and employees when a company experiences difficulties. Snyder agrees with the results, reasoning that communication in a crisis is a fundamental part of working to a solution. “It’s the red thread that goes throughout the entire restructuring,” he says.
Still, Snyder notes that executing a communications strategy is quite complicated. “Many times a management team needs a co-pilot to help them through an area they’ve never navigated,” he says. In particular, Snyder often sees a reluctance among corporate executives to speak before they craft a solution to the problem. “Many times it is best to have a solution to the problem before you announce it”, he says.
The survey also asked what type of leadership approach executives should adopt in a crisis. While many of the survey’s respondents aspired to consensus building and democratic decision-making, Snyder points out that turnaround scenarios actually need the opposite. “Authoritative is the way to go. Somebody needs to step up and make a decision because the company is paralyzed,” he says.