In Part I, we provided you with a fairly detailed itemized description of an imaginary “top five” U.S. corporation – Illinois Lincoln Logs, Inc. (ILL). Within that narrative description of ILL, it became very clear that ILL faces a number of major crises – crises that are getting worse because of neglect.
So I ask you, if you were the newly installed chair of the ILL board of directors, what actions would you propose to the other directors? Would there be any doubt in your mind regarding what to do? I cannot imagine there could be much room for disagreement on a list of remedial actions. After all, you know that ILL has become anathema among rating agencies and a “laughingstock” within management circles of other S&P 500 companies. Decisive and comprehensive action is urgently needed because the time for excuses, obfuscations, or “positive spin” has long passed!
To help you in your (imaginary) job as the new board chairperson, here is a preliminary list of possible action steps for your consideration and review:
1) The search for (and hiring of) an interim CEO and lead managers would be adopted as the highest priority;
2) Immediately following the hiring an interim CEO, the CEO and highest ranking members of the management team will be fired;
3) An immediate review of the current budget would be initiated once the interim CEO is in place, with a mandate to reformulate that budget from the bottom up. Priority will be placed on essential operations... until the existing A/P backlog is paid off;
4) A “freeze” will be placed upon the current pension (and other benefit programs) plan… with all existing “promises” to beneficiaries who are over the age of 50 “grandfathered” to ensure those promises are kept;
a. Hire a recognized benefits consulting firm (such as Hewitt) to design a sustainable benefit plan matrix that will be certain to provide the maximum benefits appropriate and possible to ILL employees moving forward.
5) Institute a corporate-wide policy that forbids the hiring of any employee who has family or business ties to the CEO or any senior member of management. That policy would make professional experience, education, and demonstrated aptitude the sole criteria upon which hiring decisions are to be made.
I cannot guarantee that every S&P 500 caliber CEO would agree with all of the above action steps. However, having graduated with a MBA and interfaced with many management leaders across different industries, I can assure you that the essential points offered above are both on target and appropriate.
The most undeniable “truth” related to this story is that ILL absolutely cannot continue on the path it chose years ago. That path has caused immense damage to ILL and all those related to ILL – damage that will be extremely difficult (and very painful) to unwind. The natural first step to such foundational change is the removal of ILL’s leaders!
Stay on the lookout for Part III of this story, when I will identify the “backstory” behind ILL. I can guarantee that you will find Part III interesting.