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Career Focus

This course is intended for students pursuing a range of career options as business operators, investors, and/or consultants. First, it would be of interest to those who at some point in their career see themselves as a CEO or senior manager potentially leading a troubled enterprise (small, medium, or large) through a crisis or through significant performance transformation. Secondly, it would be important for investors who may be in distressed, special situations, or restructuring-oriented investing or would be investing in assets needing significant performance improvement. Finally, it will be of value to those who expect to support or interface with troubled enterprises as management consultants or as a restructuring advisors.

Educational Objectives

The focus of this course is the leader as a strategist, architect, decision maker, and change agent in a turnaround or transformation environment. This course will present situations where you can analyze potential opportunity in turnaround situations and decide if there is a reasonable chance for the managers in the case to create value. It will also present many situations where you will be challenged to develop a plan of action for the managers that will lead to the creation and realization of value. Importantly, our newly expanded curriculum will include a number of practical ‘how to’ sessions covering topics such as designing turnaround programs, successfully driving necessary cultural change, transformation performance management techniques and systems, and common commercial and operating transformation improvement levers. Some of these sessions will include and be co-taught with practicing executives and advisors. In others, we will invite case protagonists and guest speakers who have decades of hands-on experience to share with the class. In short, this course is about architecting and successfully driving large-scale transformation. We will examine a broad array of factors involved in a turnaround, including financial, strategic, organizational, and cultural factors.

Course Content and Organization

The course will include some brand-new cases (e.g., Netflix, Etsy, Panera, Blackberry, and the Seattle Seahawks), with the CEO protagonists present in class, in order to give students first-hand exposure to turnaround challenges. We will look at a range of organizations, including small and large companies, family-owned ventures, private and public firms, and US and international companies.

The course will be organized around five key dimensions of turnarounds: financial, strategic, organizational, cultural, and leadership. The course opens and closes with critical lessons and devotes an equal number of cases to each of the dimensions.

Leadership: The opening and closing of the course will be devoted to analyzing leadership skills fundamental to planning and executing successful turnarounds. We will examine, among others, the importance of personal and organizational resilience, the management of critical thinking (logos), emotions (pathos), and relationships (ethos), and the challenges involved in professionalizing a leadership team in a crisis.

Strategy: The strategic dimension of a turnaround involves defining a new direction for the organization. The course will feature strategic challenges turnaround leaders often face, such as managing complexity and strategic dualities, addressing marketing myopia, examining core capabilities that have morphed into rigidities, and reining in disorganized innovation efforts.

Finance: The financial dimension is central to most turnarounds. The course will present situations where leaders must make critical decisions regarding the management of cash flow, the convenience of keeping or divesting assets, and the possibility of restructuring debt, among others.

Organization: The organizational dimension of a turnaround encompasses three mutually-reinforcing elements: structure, processes, and people. The course will focus on fundamental organizational challenges such as streamlining the organization, simplifying structure, and redesigning core processes while sustaining morale, retaining key talent, and energizing people.

Culture: Culture is often overlooked as a factor that leads to crisis in organizations. However, given the “sticky” nature of culture (it persists over time more than any other component of the organization), it is often neglected. The course will feature situations where leaders must reassess organizational culture, values, and purpose.

While these dimensions are analytically distinct, they interact with and shape each other. We will reinforce a holistic view of turnarounds that simultaneously encompasses all these dimensions by looking at their impact across the four key stages in the life-cycle of a turnaround: (1) triage (assessing whether the company is indeed worth saving), (2) crisis management (stopping the negative cash flow and erosion of morale and talent), (3) stabilizing the situation (building a stable management team that can lead to growth and future profitability), and (4) planning the future (developing a strategy and a structure suited to ensuring the company’s long-term viability).

Interwoven throughout the course will be practical ‘how-to’ sessions that will marry the strategic thinking of five dimensions and the four stages with the actual practical tools and approaches that ensure execution success. These toolkits will include topics such such quantitative improvement opportunity scans, turnaround program construction methods, leadership assessment and upgrade techniques, turnaround performance management system design, resetting mission / vision / values and incentives, communications in turnarounds, the basics of re-orgs and re-processing, common commercial improvement levers (e.g., e-commerce / digital transformation, sales force effectiveness programs), and common operational improvement levers (e.g., SG&A reduction programs, supply chain restructuring programs). These sessions will be led by practicing executives and advisors.

This course will be 28 class sessions that will be primarily case-oriented with some additional readings and high-profile in-class speakers and a few project days.

This course complements Creating Value Through Corporate Restructuring and Financial Management of Smaller Firms.

Potential Guest Speakers

Through case discussions and intimate interactions with guests, you will get an authentic view of what it is like to manage a turnaround. Guest speakers from last year and/or those tentatively scheduled for the Fall 2022 class are:

Alaska Airlines (Ben Minicucci, CEO)

Baxter (José “Joe” Almeida, CEO)

Best Buy (Corrie Barry, CEO)

BlackBerry (John Chen, CEO; Mark Wilson, CMO)

Bühler Group (Stefan Scheiber, CEO)

Dole Sunshine Company (Pier Luigi Sigismondi, President)

Etsy (Josh Silverman, CEO; Mike Fisher, CTO)

FBI (Robert “Bob” Mueller, Former FBI Director)

LEGO (Jørgen Vig Knudstorp, CEO)

Levi Strauss (Harmit Singh, EVP, CFO)

Mahindra Group (Anand Mahindra, Chairman)

Micromax (Rahul Sharma, Co-Founder)

Microsoft (Kathleen Hogan, Chief People Officer)

Panera (Niren Chaudhary, CEO)

Seattle Seahawks (Pete Carroll, Head Football Coach)

University of Alabama (Nick Saban, Head Football Coach)

Veeva (Matt Wallach, Co-Founder)

Xerox (Anne Mulcahy, Former CEO)

Final Paper

Students will work individually or in teams of two. You will choose a turnaround and examine it applying the tools and principles from the course. In the write-up, I expect that you will explain what you did (brief description of turnaround, why you chose it, which tools from the course were used, etc.) and what you learned (general principles around turnarounds, applying the tools, etc.). A detailed summary of the outline for this paper will be provided at the start of the term.

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