Humility with Conviction – An Approach to Restructure Engagements

Entering into any restructure or turnaround situation is likely to bring a rush of emotions for the consultants going into the business, and the executive team managing the company. There can be anticipation and trepidation as they enter into an organization where many of the variables will be unknown. What is certain though is that the people involved are under significant pressure and most likely have been for some time. As a result, the culture is strained or non-existent, and morale is low.

In these circumstances, a restructure consultant may be tempted to take control of the situation. They may assume they know best and start making changes without engaging with the current team. There can be a tendency to project confidence as a means of masking uncertainty. However, this can cause more harm than good.

At Turning Point, we acknowledge that obtaining control of a company’s turnaround is important. But on every engagement, we come from a place of humility and understanding. So it’s critical that we get input and feedback from the team in place, and learn from them to begin the change management process.

Change management requires the right mix of innovation and humility

There’s never just one route to innovation. It’s also seldom that the best path is discovered by outside consultants just arriving on the scene. The consultant needs to rely on the employees for advice on how to improve the company. This approach comes from a place of humility.

In our view, humility means an acknowledgment that every business we work with represents the heart and soul of its people. From its founders, executives, shareholders and employees, there are many people who contributed to the company’s success long before we got there. Aside from the issues that caused us to be there, the plans for the business — and the energy put into it — were driven by an expectation for its success.

Humility means that we listen more than we speak. When we arrive on-site, we are respectful of those people working in the business everyday. As we learn more about what caused the issues facing the company, we ask thoughtful questions before offering any feedback. Most importantly though, humility means that we don’t point fingers at mistakes that led to the need for a restructure.

By beginning each engagement with humility, we are able to put aside any predispositions. Instead, we focus on learning as we assess the situation and formulate a plan. After our introduction and diligence process, we are often tasked with acting quickly to put together a restructure plan, then execute it with conviction.

Conviction with humility

To act with conviction does not mean that humility is lost. When we proceed with conviction, we determine the best course of action to rehabilitate the business, create a detailed plan, and use the resources and working capital available to accomplish the goal.

In any restructure, there can be hesitation to close out certain options — even if those options are unlikely to lead to successful outcomes. The mere chance that a refinance or sale ‘may’ be possible, keeps that option on the table much longer than is feasible. Oftentimes, it stays there long after it becomes evident that getting through underwriting — or to a close — is a longshot.

If there is hesitation in the decision-making process, the company will continue to dwindle. Companies need the conviction to think objectively in assessing the potential pathways back to success — and profitability. Conviction means choosing an option that maximizes the chances of a successful outcome and then taking ownership of it. To quote famous rock climber Alex Honnold in the remarkable film, Free Solo:

“This is your path and you will pursue it with excellence. You face your fear because your goal demands it.”

At Turning Point, we would never compare ourselves to Honnold. But his words confirm our belief that for restructures to be successful, conviction in execution is critical.

When it comes to turnaround and restructure situations, we don’t have all the answers. We bring a learning and growth mindset to every engagement, always open to new concepts and ideas. But at our core, we believe that humility in approaching every engagement — and conviction in execution — are two pillars that can lead to a successful outcome in almost any circumstance.