The defining crucible of leadership in a business transformation is the process of rebuilding stakeholder relationships and crafting a narrative of future success that effectively sets the stage for economic viability moving forward.
BusinessTransformation #1 -
• The defining crucible of leadership in a business transformation is the
process of rebuilding stakeholder relationships and crafting a narrative of
future success that effectively sets the stage for economic viability moving
• The headline grabbing value maximization results of a successful business
transformation are impossible without stakeholder support.
• A strategic approach to stakeholder relations can make the difference
between success and failure.
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Stakeholder Group Primary Concern View of Transformation
Capital Providers Risk Adjusted Returns Skeptical
Employees Job / Career Prospects Open
Suppliers Current Exposure / Future
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Each of these broad constituencies has a unique set of concerns, risk tolerances, and
levers at their disposal to help or harm a nascent business transformation. It is the
role of leadership in a business transformation to manage each constituency for the
maximum benefit of the enterprise.
Efforts to avoid or shift blame are counter-productive. Admit
fault, focus on what is different now, and move forward with
a discussion of solutions.
In the early stages of a business transformation, skepticism is
to be expected, and is warranted, from long-suffering
Leaders should welcome the opportunity to change minds
and make that goal explicit in all communications with
The success of a business transformation rests on the ability of the team to rebuild stakeholder trust
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Stakeholders in business transformations are starved for
information and candor. Downplaying the scope or nature of
the problem will only further erode trust.
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Analysis Credibility Alignment
The challenge in rebuilding trust with this group is in respecting each party’s
risk/return preferences and structuring a formal proposal that will result in a palatable
• Address challenges candidly,
emphasize the end of the status
• Explain the scope of changes to
• Set expectations regarding timing of
changes and status updates
Employees and Suppliers
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• Apologize for lack of clarity, offer c-
level point of contact to expedite
issues during the process
• Emphasize the duration and scope
• Set expectations regarding
payment, terms, and updates
Humility, Candor, and Clear Expectations are the keys to rebuilding trust with employees and suppliers
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Time and Attention
Upgraded financial forecast and reports,
accelerated reporting cadence (quarterly
to monthly, even weekly).
The leadership team should be prepared to invest considerable time and attention in stakeholder
Townhalls, company-wide email updates,
small group gatherings.
C-level point of contact to expedite issue
resolution, update calls and visits for
David Johnson is a career change agent who has served as interim manager or financial
advisor on over $5 Billion of middle market transactions.
In his 20+ year career, David has served as an advisor, board member, interim manager,
and operator at organizations ranging in size from pre-revenue startups to Fortune 500
David has several publications to his credit and is a regular speaker on the topics of
change management, performance improvement, turnaround, restructuring and value
creation. He received his MBA from the University of Chicago and completed his
undergraduate studies at Fairleigh Dickinson University.
• Turnaround resulted in a 300% YoY
increase in Q1 EBITDA
• 6x YoY increase in EBITDA achieved
as a result of turnaround plan
• Improvement initiatives yielded a
34% decrease in DSO
• Interim CFO, Industrial Services
• Interim COO, Behavioral Healthcare
• Interim CFO, Construction Company
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