(By the way looking across both BMC and Dell, and back at the other turnarounds I’ve been involved in, this “going private” path should be far more common than it is as a public company generally can’t do what is needed anymore to complete any but the simplest turnarounds thanks to quarterly report pressures).
Recruiting an executive staff
Jim pulls from a deep list of people he knows can execute, but who haven’t made it to CEO yet. Then he and his team assess what skills are needed and make sure they are supplied when the rest of the team is recruited and they use a physiological profiling firm to help assure compatibility across the team and identify personality problems before the candidate is selected and hired. BMC was particularly effective because Bob Beauchamp was both very transparent with the candidates and could articulate BMC’s strategy in a fashion that was compelling, allowing them to acquire a far higher level of talent than otherwise would have been the case.
The executive staff then becomes a key part of the turnaround planning effort and, as a result, all members have buy-in from the start which speaks to how uniquely successful BMC’s turnaround had been.
One of the parts of Jim’s process that most seem to overlook is to make sure the new CEO is aggressively mentored but not put in a position to believe his or her mentor was after their job. Once you know what skills are needed by the CEO, and which they don’t have, it is this combination of mentoring and supplementing with other executives that assures their eventual success and speaks to why BMC has been so successful.
The key elements for a successful turnaround
When assessing or doing a turnaround the key elements to remember are that the team driving it be experienced. That they base their plan on a real assessment of the firm’s problems and resources and that they immediately move to stop stupid spending and begin a process to assess the folks below the executive staff (this is the biggest pool of critical talent for the ongoing firm). That they consider taking the company private and that they have a process to build an executive team that can execute engaging this team in both the ongoing creation of the resulting effort and remaining engaged until the result in achieved.
If all of that is done rather than an uncertain outcome the turnaround can be assured -- it continues to amaze me that this process is more the exception than the rule in today’s technology market.
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