Sam Zell’s rules on Turnarounds

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From time to time I am going to update my blog with some of the inspirational speakers that I have had the privilege to learn from over the years on a variety of topics.

Sam Zell is a U.S. real estate entrepreneur. He is Chairman of Equity Group Investments, L.L.C. (EGI), the private, entrepreneurial investment firm he founded more than 40 years ago. EGI’s investments span industries and continents, and include interests in real estate, energy, logistics, transportation, media, and health care. Click here to learn more about Sam Zell.

Sam had a few hard and fast rules about what to do if you find yourself in a turnaround situation:
1. Must exert control in a turnaround situation
2. Start with a sharp focus where you put people in a position where they must get out of their comfort zone and respond
3. Identify the type of culture and people you need to have there to execute
4. Flatten the organization (hierarchy is a great way to diffuse responsibility)
5. Encourage communication (clear, concise, honest connectivity)
6. You must understand how you got there, and not lie to yourself
7. You have to change the culture, but focus on a goal that is achievable
8. Have to delineate a clear strategy:
-figure out what you have, and what you need, then get rid of everything else
-you need to use what you have, and get rid of mythical ideas
-simplify everything
-have to have clear near and long term goals
-must have an exit strategy
9. Create a sense of urgency (typically troubled companies move slowly)
10. Take ACTION! (even if you are right 7 out of 10 times, atleast you are moving forward)
-be willing to take risks, and change what is going on
-tomorrow is too late
11. Get some early wins to get validation (i.e. low hanging fruit)
12. Manage expectations (be clear on what is possible and what is not)

Written by Sid Shah

October 24, 2010 at 9:30 pm

Posted in Business, People

Tagged with , , ,

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