in to do some of the grunt work.
For example, instead of having
the client’s personnel do all the
heavy lifting by formatting data, a
turnaround professional can offer
to do the leg work of formatting
and analyzing it, saving the
client’s personnel the time.
• Be willing to get in the trenches
and fight alongside them. In one
case, a client, together with the
professionals, burned the midnight
oil to develop a business plan for
the next day. Everybody stayed late
working on the matter together.
• Be willing to be the “bad guy”
and deliver difficult messages.
Turnaround professionals are
employed on an interim basis,
while regular employees may be
concerned about their reputations
at the client company or in the
industry long term. In other
words, turnaround professionals
will not be there to talk to a
disgruntled vendor the following
year, but the employees may be.
4 Be Willing to Teach
Most employees are not familiar with
turnaround situations, particularly
Chapter 11 proceedings, and may need
to learn the ropes. There are generally
two aspects of employee education:
1. Behavioral, which covers issues
such as how to handle calls with
workout lenders or angry suppliers.
2. Technical, which addresses
subjects such as understanding the
rules of the U.S. Bankruptcy Code.
From a technical knowledge
standpoint, most employees are
likely to say later that participating
in a turnaround provided a positive
learning experience. While they
may learn about a situation that
may not happen to them again,
their most valuable takeaway
probably involves knowledge of
how not to repeat the situation.
In the meantime, a turnaround
professional should remember that:
• Communication is critical during
turnaround or bankruptcy
situations. Establishing a
culture focused on frequent
communication supplemented by
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continued on page 28
Q&A sessions helps keep employees
up to speed on what is happening
and what is expected of them.
• Bringing the appropriate personnel
under the umbrella early to share
knowledge and provide input
is important, as is not waiting
until the last minute to notify top
management of a filing. Most
employees know what is going
on, and they talk to each other.
5 Read Employees’ Personalities, Concerns
Making personality assessments of a
client’s personnel can be very difficult.
After all, turnaround professionals
are operational and finance
professionals, not psychologists
or sociologists. Sharing individual
assessments of a client’s personnel
among engagement team members,
however, can help everyone get a
read on the personalities involved.
Employees generally fall into several
broad categories. “Talkers” often speak
the most but know the least. “Doers”
simply seem to find a way to get
the work done to provide requested
data. The person hiding in a cubicle
in the back may know where the
company’s skeletons are buried.
In dealing with employees, a
turnaround professional should
keep the following in mind:
• Gossiping is dangerous, as it
can add fuel to the fire; avoid
getting drawn into office
politics. While it is fine to listen
to such chatter, a turnaround
professional should remain
neutral. A professional who has
specific knowledge should make
sure to share it with everybody.
• Be friendly but not overly familiar.
Getting sucked into the personal
issues of employees can cost
a turnaround professional
his or her objectivity.
• Understand that employees are
concerned that their careers will
be tainted by negative perceptions
of a turnaround or bankruptcy.
One CFO, for example, worried
that the word “bankruptcy” would