Turning a company around requires change! The previous paradigms have been paralyzed by a myriad of conditions that can include environment, competition, technology, personnel, training, and most importantly, the corporate culture. These all need to be audited and addressed as necessary.
The most important factor involved in a company turnaround is priorities. In the highly regulated aviation industry, compliance with Federal Aviation Regulations (FARs) is paramount. Everything else stems from compliance, which includes the recognition of, and training in the applicable regulations. This is the foundation for any aviation-oriented enterprise. Without the clear understanding of the regulatory foundation, there can be no stability.
Federal Aviation Regulations
Every person in the organization must have a working knowledge of FARs. This knowledge establishes the parameters within which the organization operates. There is a hierarchical pyramid of responsibility and authority that must be maintained to ensure stability, consistency, and predictability in the system.
Repair Station Manual (RSM)
The RSM must be written so that each person required to follow procedures can use it. Procedures within the manual must apply to each function performed in the repair station so that personnel performing the functions can be held accountable. (If you don’t train people and provide them with complete procedures, you can’t ethically hold them accountable!) Foremost, the RSM must be user-friendly and not contain anything not required to be in it!
Each person, especially senior management, must be trained to understand the RSM and FARs. Only in this way will management recognize the restraints and limitations imposed upon the personnel required to perform the work. Management can’t ask personnel to perform outside the RSM because it reduces management credibility, reduces morale, and makes the RSM impotent. It is a prescription for failure!
A company requiring turnaround must recognize and admit that there is a culture problem. Employee morale is obviously low, respect between classes of personnel is low, personnel have no ambition to excel, and most are at a point where they are merely collecting a paycheck, dusting off their resume, and just waiting for the ship to sink hoping they can get off before they drown with it! For a company to turn around, the culture must be changed.
There is no other way.
The magic in dealing with personnel is to always try to catch them doing things right, and then reward them for it as positive reinforcement (Psychology 101). Before long, employees want to do the right thing. When you do the right thing people are proud of their work, they are recognized for it, they are more productive, and profits go up!
Here comes the “80-20 Rule”! Management (the 20 percent) generates 80 percent of all problems in any company! It is a historical and statistical fact. Further, management makes rules that really are only directed at less than 5 percent of the employees, those who are screwing up all the time! This is an easy problem to remedy! Management knows who the screw-ups are . . . get rid of them! Further, the personnel also know who they are and will very much appreciate seeing management take the reins and do what’s necessary. It adds credibility to management, always important, but especially so in a turnaround situation. Employees must see “sacred cows” dealt with in a manner that reinforces that there are no “protected classes.”
Management induces problems into the system by “micromanaging” every little function. General George Patton said during WW2, “Don’t tell people how to do their jobs. Tell them what the job is, and then let them surprise you with their ingenuity!” This is based, of course, on the fact that personnel who will be delegated the job functions are trained, qualified, and authorized. If personnel are properly trained, they can be held accountable. But, you must give them some control over their destiny! Chronic “stress” is defined as “repeated and uncontrolled stress.” People under stress do not work productively, have more medical issues, and take more time off. People working without stress are more loyal, more productive, etc. This is not to say that there is no stress in business; it just can’t be stress induced by poor planning, preferrential treatment, lack of training, ethical issues, and lastly, egos. Employees watch very closely whom the “Boss” draws around him or her for guidance and support. They can assess the corporate “culture” and corporate ethics by those issuing direction. Again, history can help.
Unfortunately, history is always written by the winners! Napoleon is commonly thought of as an egomaniacal dictator, ruthless and uncaring. In fact, he was just the opposite. Napoleon was a great “manager”. When choosing commanders he relied entirely on a merit system. Every single marshal created by Napoleon in 1804 had come up through the ranks. They were people who had human connections to the common soldier and had distinguished themselves in battle. Further, Napoleon never stayed in the rear! He was always the first into battle with the troops. The mere sight of Napoleon on the battlefield was enough in many cases to frighten the enemy and cause the battle to turn in Napoleon’s favor. The troops knew that, if Napoleon was there with them, they would win. He rolled up his sleeves and suffered with them. He never asked them to do what he himself wouldn’t.
The English, on the other hand, had a unique system of choosing commanders; most of the regimental commanders came from the aristocracy and purchased their commands. These commanders were not battle-hardened, having little if no combat experience whatsoever. They were disciplinarians and cheerleaders, sending their troops into battle while they stood safely in the rear. They always had the excuse ready if they lost, “The troops were cowards! What could I do?” Their troops had to develop their own individual reason for fighting. There was no identifiable cause to fight for. Again, they were just collecting a paycheck that they couldn’t collect as well in London! (Napoleon never flogged his troops either. That was strictly a British tradition.)
Management needs to develop authoritative controls commensurate with corporate mission objectives. Purchasing needs to have established latitudes of authority to purchase materials necessary to keep production functioning. A pyramid needs to be established that controls the amounts each level is allowed to spend, and when the next level of approval is needed. For example: if parts costing under $2,500 in the aggregate are needed for a specific work order, then purchasing may buy them because they are allocated to a specific work order. If it exceeds $2,500, then purchasing needs the next level of approval. However, if purchasing wants to buy for stock, it may require an additional approval regardless of the amount because the company may not want to increase inventory using working capital. If people are properly trained and specific written procedures are in place, there is no reason why they can’t be trusted to follow those procedures! All you do then is audit performance.
This depends entirely on procedures, training, and a working knowledge of the regulations. This is the foundation of the “functional” personnel, i.e. the people with the tools touching the product. The first thing that must be done implementing any turnaround situation is to train the functional personnel as to where the lines are. They must know how far they can go during maintenance performance. In short, they must follow the product manufacturer’s maintenance instructions to the letter. In the event they find they can’t, they must raise their hand and ask for help! Not asking for help or not knowing where the lines are is a prescription for failure and severe penalties from the Feds when they catch you! Make no mistake, it might take time, but the Feds will catch you! Heaven forbid you kill someone in the meantime. It has happened. The only way to instill predictability into the system is for personnel to follow directions . . . period!
The critical factor in any company, regardless of condition, is leadership! As President Harry Truman put it, “Men are born great, some achieve greatness, and then some have it thrust upon them!”
There are several types of leadership:
- Benevolent Dictator
The benevolent dictator is not a bad person because he is “benevolent”. He is, however, the final arbiter in all things and demands 100 percent oversight. He listens to varying opinions, provides positive reinforcement to personnel, and also accepts full responsibility for the actions of the company. He does not micromanage, but has his fingers in all the pies.
Companies with benevolent dictators function very well as long as the dictator remains in control. Unfortunately, these dictatorships fail when the dictator loses control.
This is the classic dictator! He micromanages everything because he is paranoid. (This doesn’t mean that people are not really out to get him!) He prohibits all personnel from making any decision without his approval. This completely paralyzes everybody from providing information to him that he should have, and completely stifles any initiative. There will be no loyalty to the company or to the profession, only to the dictator. He is the father-figure and all personnel will try to curry favor with the dictator, stabbing others in the back to make themselves look better to the dictator.
It is the “blame game”! Any time something bad happens, employees point at each other to assign blame because they know the dictator is going to execute somebody. This is the environment that breeds whistleblowers because personnel have no loyalty and no process for redress.
Companies run by teams are better than a dictatorship, but usually not as good as having a benevolent dictator. The best company is one with a benevolent dictator who uses the “team concept” to involve the employees in the process of doing business. Employees who are able to see the “big picture” are more able to use initiative and effect improvement. They are able to suggest improvement ideas and to see their results. The benevolent dictator then becomes responsible for oversight and approval of suggested changes within his overall economic and regulatory responsibilities. As stated before, General Patton said, “Don’t tell people how to do their job. Just tell them what the job is and let them surprise you with their ingenuity!”
Leaders must lead! Leaders must also be trained, qualified, and authorized to lead. They can’t lead the sheep off the cliff! Choosing leaders is an art. There are three characteristics that should be present in any leader: judgment, courage, and experience.
In fact, these are in the proper order of priority! Always sacrifice experience for good judgment. Always sacrifice courage for good judgment. There is an old saying, “God grant me the serenity to accept the things I can’t change, the courage to change the things I can change, and the wisdom to know the difference!”
Leaders without wisdom will lead the sheep over the cliff! Judgment also includes such esoteric things as character, ethics, honesty, humility, etc. Leaders who cut corners are poor role models. Fairly quickly, personnel will start cutting corners as well because they see the leaders doing it. This is the scourge of the “MRB” (Material Review Board) system in any industry! MRB means that the manufactured or maintained product doesn’t meet the print. So here come a bunch of engineer types who look at the defect and then decide that the product can be used “as is”. The next time the inspector looks at this product and finds the same defect he will automatically accept it without tagging it again. You denigrate the position of the inspector by doing this. Pretty soon the inspector will be accepting defects on his own, and then it could be disastrous!
Leaders must lead by catching employees doing things right. Leaders must consistently provide positive reinforcement to employees to encourage them to do things right, and then reward employees for doing things right. All personnel must respect each other, the leaders especially.
Never promise an employee a promotion or pay raise without following through as promised. Many employees are promised, “Stay with us six months and we will do . . .” If you decide to hire someone and their worth is established, pay them what they’re worth. There is nothing that destroys an employee’s loyalty and respect more than screwing with their paycheck. If you can’t afford to pay someone what they’re worth, just tell them. They will then make the decision to stay or look elsewhere. Don’t mess with promised benefits either. If you promised something you must deliver. Otherwise you are encouraging the development of a disgruntled employee who will burn you in the end if the opportunity arises.
You can’t do it yourself! You have to secure the services of an experienced facilitator. Existing personnel are very perceptive to a company’s problems. They will never believe that current leadership has had an epiphany!
A facilitator can be a consultant or a new employee placed in an authoritative leadership position. This person must be introduced to all personnel by the highest positioned person in the company to lend credibility and recognized support. All personnel must be familiarized with this person’s credentials so that challenges are minimized and control is maximized. Every time a meeting is convened, the company’s leader must sit next to this person so that all personnel see the two as partners, as though direction was coming from the leader himself, but through this person.
Employees must see visible improvement. Do not make changes for change sake. This is easily seen through by everyone. You eat an elephant one bite at a time. Have all employees make a list of the top 10 items that they think need changing. Collate these suggestions into a second list of the top 10 items and redistribute them asking all employees to prioritize them. Then, start taking them in order and improve. When employees begin to see that management is serious about listening, they will accept the whole program. You will be surprised at what employees feel is really important to them, and it’s not just money.
The top items statistically are:
- Working conditions
- Listening (by management!)
As Michelangelo said when he was 80, “I am still learning!”