Latest / The Start, Scale & Succeed Podcast / The Founder/CEO’s First Step in a Turnaround with Richard Broo (stage 5) - Ep. 397

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The Founder/CEO’s First Step in a Turnaround with Richard Broo (stage 5) - Ep. 397 · The Start, Scale & Succeed Podcast

• 0:00
  Scott Ritzheimer: Hello, hello, and welcome. Welcome once again
• 0:03
  to the Start Scale and Succeed podcast, the only podcast that
• 0:07
  grows with you through all seven stages of your journey as a
• 0:10
  founder. I'm your host, Scott Retzheimer, and I still remember
• 0:13
  there was this distinct change that I couldn't describe at the
• 0:17
  time I was founder, CEO of a business. We moved from being
• 0:20
  this small entrepreneurial startup to one day kind of woke
• 0:23
  up and found like we're this full blown enterprise, and as
• 0:27
  nice as that sounds, and as much as I probably bragged about it
• 0:31
  quite a bit, if I'm honest, it seemed like on the inside it was
• 0:35
  a heck of a lot harder than I expected, because just about
• 0:38
  every day demanded a new skill or new way of thinking that I
• 0:42
  did not have at the time. Now, as a coach, I recognize this
• 0:47
  same challenge that catches almost every founder by surprise
• 0:50
  when they reach this CEO stage. There's so much to consider,
• 0:54
  there's so much to understand, and there's so much that has to
• 0:57
  get done, and you're so dependent on so many people for
• 1:03
  every step of that process that it can be very, very
• 1:06
  overwhelming. The simplest problems, like realizing you're
• 1:10
  paying $10 for a part that should only cost $1 somehow
• 1:14
  comes with so much complexity that you wonder if you ever, if
• 1:17
  you'll ever get anything done. Well, if that's you, I am
• 1:20
  thrilled to have you here. Because today's guest is Richard
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  Broo, who spent more than 40 years helping organizations
• 1:27
  identify and correct project issues before they become costly
• 1:31
  failures. He has worked with Fortune 500 companies,
• 1:34
  mid-market firms, and private equity-backed businesses across
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  industries, including packaging, automotive, consumer goods,
• 1:40
  industrial manufacturing, and medical equipment. His expertise
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  includes product management, project management, new product
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  development, commercialization, and operations. He's also led
• 1:51
  businesses through major turnarounds, including
• 1:53
  stabilizing a failing medical packaging company and guiding it
• 1:56
  through bankruptcy to a successful $22.2 million sale.
• 2:01
  He's here with us today. Richard, welcome to the show.
• 2:04
  I'm so glad to have you on today. I'm excited about this
• 2:07
  conversation. I want to jump in with a question here. You've
• 2:11
  spent a long time, over 40 years, of walking into rooms
• 2:13
  where projects or companies are bleeding out money, they're out
• 2:18
  of time, and that all happens under the watch of some really
• 2:23
  clever people, some really smart CEOs who've had a ton of success
• 2:26
  in the past. How does that happen? How do we let things get
• 2:29
  so out of control?
• 2:31
  Richard Broo: But first of all, thanks for having me, Scott. And
• 2:33
  that's a very good question. And from my experience, it gets out
• 2:38
  of control because the different levels within the organization,
• 2:41
  either have different expectations about what you're,
• 2:44
  what they're trying to do, what they're trying to achieve, and
• 2:48
  they're not communicating with one another on all cylinders, if
• 2:52
  you will. So I have found that that's one of the critical
• 2:56
  reasons why some of the brightest and best minds get
• 3:00
  derailed, because those that they depend on always don't
• 3:03
  provide all the information or the right information at the
• 3:06
  right time.
• 3:07
  Scott Ritzheimer: Yeah, yeah, it's this like game of telephone
• 3:10
  times hundreds and 1000s, and and I think the challenge of it
• 3:15
  is for founders who you've kind of been growing up through all
• 3:19
  of these different levels and stages, they've got a pretty
• 3:23
  keen sense on the feel for the organization. They know it needs
• 3:26
  to get done, and I think we actually misinterpret the fact
• 3:30
  that our executives have that same level of intuition. We kind
• 3:33
  of think that they know exactly what's happening at any given
• 3:36
  point in time, when sometimes they're just as in the dark as
• 3:39
  us, where in this game of phone, when we realize that it's
• 3:46
  breaking down? What are some of the first steps to start to
• 3:49
  clarify things?
• 3:50
  Richard Broo: Well, having done several turnarounds and helped
• 3:54
  some of the General Electric divisions become more profitable
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  and operationally efficient, you know, the first thing that that
• 4:00
  I look for is current state. What is what is the current
• 4:04
  state? What if you're the CEO? I want to know what do you know?
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  What do you think? What do you feel? You know what's your
• 4:10
  impression about what's going on here. But I don't want to stop
• 4:13
  there. I want to go down below you. I want to talk to your
• 4:15
  staff. I want to talk to the people within the organization
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  to see, are they are they seen and thinking the same things
• 4:21
  that you are, because what I find is there is some degree of
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  disconnect, you know. The boots on the ground are trying to make
• 4:28
  something happen, right? I mean, that's why I'm a boot on the
• 4:31
  ground. I'm here to help advance the company, but I may not.. I'm
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  live, I'm actually living on the ground, doing the work where the
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  CEO is up several levels, or some of the management might be,
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  and they may not really understand what's going on down
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  at the boots level, or they may have what they think is an
• 4:49
  understanding by gathering points of information, but that
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  information, it's not been put together properly, it's not been
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  connected properly, so that you know by the time it gets. Way up
• 5:00
  to the top, you know that person says, "Well, wait a minute,
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  what's going on here? And you say, "Well, this is what's
• 5:07
  really going on, and this has not been elevated enough to our
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  levels. So, you first, I first look for is what you told me, as
• 5:15
  this founder and a CEO, the same as what I'm hearing on the
• 5:17
  floor, where the people are doing the work. If not, there's
• 5:20
  a disconnect, and we have to figure out why that disconnect
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  exists.
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  Scott Ritzheimer: Yeah, yeah, with that disconnect, oftentimes
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  it can be really painful, and and there's this feeling that
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  we've kind of got to jump in and find someone to blame. We don't
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  necessarily say it that way, but we feel it that way, it's like
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  we have there's this almost visceral reaction to point
• 5:43
  fingers. Is that helpful? Is it not helpful? What is an
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  appropriate response when we find out that there's been a
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  disconnect?
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  Richard Broo: It's not helpful to blame. I mean, when we, when
• 5:55
  you boil it all down, we're all people, we're all trying to do
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  what we think is the right thing, and the only way you're
• 6:00
  going to come through, like what I put Headwind Corporation
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  through before I sold it, or helping turn around GE
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  silicones, is you have to have some degree of empathy and
• 6:12
  open-mindedness to talk to the people about the situation,
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  gather exactly what they feel that is, look for the
• 6:20
  connections and the disconnects, and then employ them, employ
• 6:24
  them to help close these disconnects. But for me to say
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  to you, well, you know, Scott, this is all your division's
• 6:32
  fault. That's not going to solve anything. I'm going to alienate
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  you, and I'm disrespecting you and the people that work for
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  you. So it's all about getting the people moving in the same
• 6:42
  direction, understanding the same objectives and goals, and
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  making sure that there's that accountability and ownership
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  that they want to go that way. And the only way you're going to
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  get there is with your people, so don't blame them, engage
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  them.
• 6:56
  Scott Ritzheimer: Yeah, when there's been a big mistake, or
• 6:58
  there's been a pattern of mistakes, and maybe you want to
• 7:01
  handle those two separately. You're more than welcome to, but
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  how do we separate when it, when it is the person versus when
• 7:08
  it's more of a process or systemic challenge?
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  Richard Broo: Well, I've been through that at Headwind. There
• 7:14
  were there were some groups within that company that were
• 7:17
  not performing as expected, and some of it was the person, but
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  when he's, when you talk about the person and the situation,
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  you first have to ask yourself, as a leader, is that person the
• 7:29
  right person for that job? Do they, do they really have the
• 7:32
  skill sets to do that? And, and ahead, when I, I had a
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  manufacturing manager that was thrust in, in the job that
• 7:38
  didn't have that experience, he did not have the experience of
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  running, you know, three different buildings, all this
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  different equipment, and he was just miscast, so I put someone
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  in there that knew the operation, that knew how to run
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  it, but that didn't mean the person that was miscast was a
• 7:57
  bad person, he had a great rapport with the customers, so I
• 8:03
  put him into sales, and he flourished. So, you first look
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  at the people, I ask myself, is this person miscast in the role?
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  Is this person really trying hard? I mean, do they have the
• 8:14
  heart for what, for the company, what they're trying to do? If I
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  see that, I'm going to try to help that person get to where
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  they need to be, and find someone else to take over where
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  they were that can do the job. Yeah, yeah, and it's all about
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  people understanding the skill sets required. And do you have
• 8:29
  the right people?
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  Scott Ritzheimer: One of the things that makes that
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  challenging for founders, especially when they've had team
• 8:36
  members and leaders and executives who've kind of grown
• 8:38
  up in the business with them, is that at one point in time that
• 8:41
  may have been true, they were the right person in the right
• 8:44
  seat, doing the right thing, but those roles aren't static,
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  they're growing with the organization. And how do you
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  help someone figure out whether or not that's changed? Like, how
• 8:54
  do you stop when they've had so much success in the past and you
• 8:57
  see them as a successful leader? How do we, how do we stop in the
• 9:00
  current moment and reassess.
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  Richard Broo: Well, my style, what I did at headwind, and when
• 9:06
  I did a GE is I actually met with the person, I said, you
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  know, you've, you've had success up to this point, you're
• 9:13
  obviously struggling. Some admitted to the struggle, some
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  had to be, I guess, coached to understand the struggle, but
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  eventually understand they're struggling. Okay, why are you
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  struggling? What is it about what you do on a day-to-day
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  basis for this job that's preventing you to have a
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  continued success that will come out in those conversations? And
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  then the next question I would say, well, if that's the case,
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  Scott, do you really want to continue in this role that
• 9:41
  you're in and risk more failure, or can we work together to find
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  a spot for you where you can flourish again? Because if you
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  do, I can help you with that. But even though you've grown up
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  in this business, so you and I grew up together, it's not
• 9:54
  working anymore, and it's all perhaps not your fault. There's
• 9:58
  circumstances involved. But again, you have value. Where can
• 10:03
  I use that value now to get you back on track and get the
• 10:07
  company back on track?
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  Scott Ritzheimer: Yeah, yeah, it's such a hard conversation,
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  but approaching it through that lens, I think, is so powerful,
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  and I'm regularly surprised at how well that works. I've seen
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  folks even offered to have themself demoted to another
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  role, demoted, but into a role that's a better fit, and really
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  thrive in it. So, from a people standpoint, I love that input
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  and advice. It's a great conversation to have. The other
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  thing that you talked about, and kind of opened the episode with,
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  is that the people are saying and seeing different things,
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  and, and so one of the challenges, or one of the ways
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  I've seen companies try to overcome this, is they just
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  share everything with everyone, not literally, but almost, and
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  it's just it's emails and emails and meetings and meetings, and
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  there's a, there's a too much that's just as bad as too
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  little. How do you figure out what the right information is,
• 11:02
  and the right channels to share it?
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  Richard Broo: Well, when it comes down to a personal
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  conversation, to me it's person to person. I'm not going to air
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  laundry that doesn't have to be air, if you will. So, if I have
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  a people issue, I'm going to go to the people involved and have
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  a direct one on one, understand where their head's at,
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  understand, you know where their choking points are, and to talk
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  to them about we can come through this if we want to work
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  together through it, if it's a process-related thing, and we
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  had, we, you know, at GE at Silicones, it was, it was, it
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  was struggling fairly much, and basically we had a product
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  issue, and we were trying to compete against companies like
• 11:42
  Dow and Varga Chemical, and everybody thinks she's this
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  great company with all these products, but we had products
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  that couldn't compete with them, so I had to go back to the
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  product development people and say this is where we're really
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  strong in this kind of chemistry, not that kind of
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  chemistry, you've been trying to fight that kind of chemistry,
• 12:01
  where we're losing for the last 10 years on the automotive side,
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  we're already beat, but let's go over here, where we can have a
• 12:09
  new market or market segment and win again. So, I think you have
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  to, I think you have to find a way to divide it. If it's
• 12:14
  people, it's one on one, it's figuring out where the choke
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  points are, how to get them back on track, not and use their
• 12:22
  value if it's, if it's process or product wise, you've got to
• 12:25
  go back within, within the organization with the facts,
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  obviously, and say we're not winning here, and we're not
• 12:31
  winning here because of our people, we're not winning here
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  because we don't have products that can compete in the
• 12:36
  marketplace, but we have strengths over here where the
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  competitors don't, that's what we need to exploit.
• 12:41
  Scott Ritzheimer: Got it, got it. So, good, Richard. There's
• 12:44
  this question that I have. I ask all my guests. I'm interested to
• 12:47
  ask it of you as well. And the question is this: What is the
• 12:50
  biggest secret that you wish wasn't a secret at all? What's
• 12:54
  that one thing you wish everybody watching or listening
• 12:56
  today knew?
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  Richard Broo: I wouldn't call it a secret, I would call it point
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  of concern. There's no issue, there's no problem that you
• 13:03
  cannot overcome if you just have the gumption, the desire to have
• 13:08
  the hard conversations with the people that you're trying to
• 13:12
  nurture to grow your company or to turn your company around. You
• 13:17
  know, I grew up in GE before it became Welsh's real GE of
• 13:23
  empowerment, where people were afraid to talk. I'm afraid to
• 13:26
  talk to Scott, because I'm afraid if Scott takes what I say
• 13:30
  wrong, politically I could be killing myself. Or I don't
• 13:33
  really want to admit this to Scott, because if I do, I'm
• 13:37
  showing a sign of weakness. The big secret is don't be that way.
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  Admit to what you don't know, admit to what you can't do, and
• 13:45
  ask for the help. That's strength, that's not weakness.
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  But I think a lot of people feel within themselves, I don't want
• 13:53
  to expose myself to that. It's no big secret, you know. And I
• 13:57
  think you get more respect and more help and more runway if you
• 14:02
  do that with with the people you work for and the people you work
• 14:05
  with.
• 14:06
  Scott Ritzheimer: Absolutely, absolutely, Richard. There are
• 14:09
  some folks who are listening and hanging on everywhere. You said
• 14:12
  just completely describe the situation they're in, and they'd
• 14:15
  love to have help navigating through some of these turbulent
• 14:18
  waters. Where can folks find more out about you and the work
• 14:21
  that you do. Where can they reach out to connect with you?
• 14:23
  Richard Broo: They can find me on LinkedIn. I'm Richard Broo, B
• 14:27
  R O O. My company has a website, ww dot true north pmp
• 14:33
  consulting.com And I'll be more than happy if one of your
• 14:37
  listeners would like to talk with me. It would be my
• 14:40
  privilege.
• 14:41
  Scott Ritzheimer: Fantastic, fantastic. Well, Richard, thank
• 14:44
  you so much for coming on and sharing the wealth of experience
• 14:47
  that you had. I know we've only scratched the surface of the
• 14:49
  surface, and for those of you listening, you know that your
• 14:54
  time and attention mean the world to us. I hope you got as
• 14:56
  much out of this conversation as I know I did, and I. Cannot wait
• 15:00
  to see you next time. Take care.