2011 This washing says it all. Whilst challenges remain, this OECD report outlines that there are no UK roadblocks to becoming global and competitive. In fact it’s back to common sense – making and selling things. Although making up only 10% of the UK economy; manufacturing now accounts for 24% of the recovery. What are missing is YOUR courage, YOUR desire to win and being aware the revolution is OUR responsibility. The difference between certainty and uncertainty is simple – taking action.

This is the action taken by the icebreaker team in 2011

CPO Consumer Goods Private Equity Owned – In 3 months reduced 400 initiatives to less than 15 must win programmes to deliver €12m for 2012 with an immediate cash improvement of €8m. case study

Operations Transition Director Medical devices (t/o £130m) – Enabled  33% increase in revenues in 3 months with a £1m reduction in costs. case study

Transition Programme Director FMCG (t/o £130m) – Transitional lead from corporate to private equity ownership. case study

SME Textiles Business Turnaround (t/o £7m) – Overall Business strategy resulting in increased profit of £0.5M. case study

Interim MD Restructuring Medical Devices (t/o £12m) – Saved £420k vs. restructuring budget with £755k savings pa. case study

Interim Head of Engineering (Aerospace Group Subsidiary) (t/o £140m) – In 3 months improved external customer satisfaction 55-76%, with programme on time delivery to budget raised to 85%. case study

Due Diligence

Due Diligence (t/o £150M) – VC Retail Turnaround – launched program to realise a €8m cash improvement. case study

Due Diligence (t/o £25m) – VC Automotive Manufacturing – in 4 days identified a plan to £2.0m profit with £2.6m less sales, with target c.£1m cash improvement in first few months. case study

Capability development

Interim HRD Software Inc. (NASDAQ) – Implemented and delivered an internal recruitment capability. Established an HR back office capability in Pune, India.

Turnaround Director (t/o £400m) 3500 employees NHS Sydney stock exchange listed supplier of IT services –Transferred the Group finance operations to the UK. Sold the business and repaid £150m bank debt.  (Shortlisted for listed company turnaround of the year in 2011 IFT Awards).

Looking back on 2011 – these projects alone have recognized and or delivered a £15m cash improvement, with £15m extra EBITDA, or £70m value add not bad for an “uncertain” year.

Let’s have a great 2012.

2010 was predicted to be the end of the recession but was 5% better than 2011, 2012 is predicted to be steady. 2013 is predicted to be the year of insolvencies. Large corporate seem to be sitting on cash, leaving the rest having to survive on what they have got. In this sector a small shift in working capital or dip in sales can lead to a real issue with solvency turning a short term cash requirement when there is no source of funding into a crisis. These companies need much better controls as they often don’t see it coming or have the sophistication to respond. Generalisations are meaningless as many sectors Aerospace and Auto are growing very nicely. Whilst the economy is only c10% manufacturing they are leading 25% of the economic recovery. Complacency and the effects of the Asian tigers leaves the UK looking very complacent and inward looking. I noticed a Chinese owned retailer with a shop of entirely sourced branded electronics products. Excellence will be driven by the toughest markets and the EU has much to wake up. On the Euro the good news is the Italian Mafia with 65bn are now the most solvent Italian bank – so maybe there is hope for the Euro zone after all! In terms of interim positioning I agree there is a case for specialism, but with the caveat it is supported by a broad inventory of interests and skills
Happy New Year Tom

1. Deal flow
   1. Kelso Place did o deals in 2011 – prices were too high.
   2. RBS did 800 restructuring deals in 2011 – who did them?
   3. Corporate finance seems to be the leading source of deals not IPs in 2011/2012, with the outlook for insolvency practitioners looking bleak, laying off workers. RBS view – 2013 may be an upturn in insolvencies, as businesses.
   4. Zombie companies are adversely affecting the competitive landscape often buying some business below cost, artificially screwing pricing.
   5. RBS Santander deal is expected to be completed Jan 31 2012, to meet the end of 2012 window. If the deal falls through there will be a limited window to find another. Only 5% of commercial is in fact 23pc value of the portfolio, and 318 retail branches – the divestment is complex as its part of the business.
   6. Buy good business is at the core of turnaround acquisitions – regardless of whether it is in out of an insolvency process, whatever is the best process to retain value and viability. The complexities of buying a business post admin should not be underestimated either.
2. Insolvency law / developments;
   1. 2011 insolvency Begbies led – 243  with 167 KPMG ;
   2. Case law indications are that pensions may be ongoing liabilities post administration!
   3. Fairline boats / Better capital JV with RBS is an interesting development
   4. In 2011 – Prepack made up 27pc of all administrations yet the outcome is 70% of all businesses entering administration were still sold back to their owners! The new 3 days prepack creditor review seems to be on the cards in April!
   5. Football creditor rule ending will likely make no difference as FA will use own rules to find another way around
   6. Retail; high St closing 1000 shops week, retail property owners 80pc are in breach of their loan to value covenants
   7. 30pc premier football clubs have player fees greater their turnover, but foreign owners will likely once again save the entities and they will carry on regardless
3. No one offered a view of 2012
   1. Subsequent news – On the Euro; The Italian Mafia are now the largest Italian bank with €65Bn liquidity.

nigel_morrinson_grant_thornton.php

A: Virgin’s history shows that a lack of experience does not have to be a liability — it can be an asset. It is something you should play up when you discuss your ideas with prospective investors, partners and employees, rather than directing the conversation toward your other strengths.

From the first days of my career as an entrepreneur, I have always used my own and my team’s lack of experience to our advantage. In fact, at our first venture, Student magazine, we used our newcomer status to secure great interviews and generate publicity — people were excited about our new project and wanted to get involved. Our inexperience fed our restless enthusiasm for trying new things, which became part of our core mission.

No matter which industry you are planning to enter, you will almost certainly find that the same holds true for you.

Since our Student days, we have started hundreds of new businesses, in most cases knowing next to nothing about the industries we were moving into. And our inexperience has always allowed us to focus on how we can do things differently, rather than on the reasons we cannot. This gives us freedoms that other businesses don’t have, constrained as they are by past lessons and industry history.

The key to turning inexperience into an asset is to pitch what is new about your product or service. How does your approach differ from that of other businesses? How will you reach out to target markets? Why should people choose your products and services over your competitors’? Present prospective partners with a fresh take on a tired industry, and you will grab their attention.

Our group’s history has taught us to target new industries and markets where we feel we can add something new, improve the customer’s experience and carve out a successful position. Our move from publishing into music retailing is a case in point. When we sensed that Student magazine’s circulation was reaching its peak, we looked for more ways to make money, and decided to start selling records by mail order. A postal strike stopped the business in its tracks, but we had caught the music bug. Instead we set up our first record store. So our inexperience did cause us a near-miss, and it’s likely that if people are asking you about your lack of experience, your ability to spot problems is on their minds. But many startups fail each year; a founder’s background has little correlation with success. A couple of failures on a beginning entrepreneur’s record should not be considered an issue. Indeed, investors need to become better at accepting that as our dynamic, innovative economy constantly reinvents itself, businesses will inevitably become obsolete. A young entrepreneur who has dusted himself off and started again, learning from his mistakes, has proved that he has what it takes.

Constrained by a lack of capital after the strike, we found a former shoe shop on Oxford Street in London, and we talked the owner into letting us use the empty space. We were not trained retailers, but we liked music and wanted to create a cool hangout for young people. Instead of building displays designed to move merchandise quickly, with huge racks of records and no place to sit down, we brought in big, comfy cushions and built listening booths — it was a place where you could chat about music with your friends and share your favorites with them.

Our Oxford Street store quickly became popular with Londoners, which meant we soon had the cash to open our second and third stores. We stuck to our original winning formula, making sure to open stores on busy streets, especially looking at spaces that needed smartening up, since we could get a few months rent-free. This usually gave us some time to establish a local following. Soon we had stores in almost every large town in Britain.

From music retailing we moved into the recording industry, but it was our move into the airline business that underlined for me the advantage of inexperience. When we leased our first 747 jumbo jet in 1984, I knew very little about the airline business, beyond the fact that I had flown a lot as a record executive and disliked it. The food was poor, the entertainment was bad, the seats were uncomfortable and the service was lackluster. Surely all this could be changed — it was just common sense.

Virgin Atlantic’s early years were all about breaking conventions. I hated being stuck in one place for eight hours at a time, so we created a bar where Upper Class passengers could meet and talk during the flight. We brought massage therapists on board to relieve the tedium and ensured that all passengers had better seat-back entertainment. Continuing this tradition, Virgin America, our newest airline, has similarly revolutionized the industry in the United States.

So when you are dealing with prospective partners, suppliers or employees, turn their questions about your inexperience to your advantage. Explain that it frees you and your team to follow your vision for the industry. And if you make adjustments along the way — not just to correct for problems you’ve noticed, but for contributions from your employees as well — you will forge a new path to success.

” quote ends entrepreneur.com

http://www.fastcompany.com/1799088/5-disaster-moves-to-botch-your-pitch

Six things that have been critical to Amazon’s success and they ring true with many of the values of Steve Jobs at Apple and many other successful companies:
1. When you have a window of opportunity, go for the jugular – even if you have to exhaust a huge number of resources
Critics saw a bottomless pit but Bezos knew he had a time-limited chance to make Amazon an e-commerce leader.
……The competitive landscape has continued to evolve at a fastpace. Many large players have moved online with credible offerings and have devoted substantial energy and resources to building awareness, traffic, and sales. Our goal is to move quickly to solidify and extend our current position while we begin to pursue the online commerce opportunities in other areas. We see substantial opportunity in the large markets we are targeting. This strategy is not without risk: it requires serious investment and crisp execution against established franchise leaders.
2. Think long-term meaning 5 – 7 years, not 5 – 7 months. Jack Ma recently said the same thing at a talk in Hong Kong. It’s smart
We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.
3. Long-term market share is more important than short-term profits because without long-term market share there will be no long-term profits
We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
4. It’s ok to make mistakes but it’s not ok to be timid
We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.
5. Obsess over Customers
As Bezos said in his Wired interview, the best customer service experience is when they never have to contact you.
6. Be first in a big market
It’s easy to think now that Amazon was first in a big market, but people assumed at the time they were in a niche market facing established players. But Bezos always had grand ambitions for his company and saw the opportunity. It’s partly why he pushed for a land-grab of market share. As we’ve long said, online bookselling, and online commerce in general, should prove to be a very large market, and it’s likely that a number of companies will see significant benefit. We feel good about what we’ve done, and even more excited about what we want to do.
It’s been an amazing run.

Nov 10 2011 TMA Conference some key factors in turnaround;
• Understand the diversity of the stakeholders – for example HMRC have no interest in negotiating down late payments, they may like to try to ascertaining viability of businesses butif they get any view a business is holding back information causes them to call their debt in.
• The HMRC as a £50bn creditor to UK plc – are training staff in debt management.
• A CVA must demonstrate better value return eg. c25% to creditors vs. insolvency. HMRC pulled down the Oddbins CVA as they were rejected the proposal with 30p/£ and failed within the 16 days to give notice of objection, wasting all of the other creditors time.
• Banks often see the sense to commercially take the hit in a CVA but HMRC will often insist and get all their money.
• Barclays model of assessment viability; strength of business vs. strength of management
• Using a proven team existing management is rarely the right solution. Assessing teams, interviewing often does not work. Only was to test is to work with them. People who say go in with size 9’s ridiculous; issue is how to create long term value get the hearts and minds of employees.
• Selflessness what’s in it for me – Turnarounds require pretty selfless individuals.
• Pragmatism and proper capitalisation – you can’t do it on a shoestring – things never go to plan. Daily calls on cash flow are a waste of resources.
• Keep the deal simple – agenda must be completely aligned
• Allow sensible time to repay debts
• Have more than 1 plan; optional exit routes early, e.g. TG Hughes failed after 4m offloaded to GA the retail workout specialist
• Unusual events push businesses into crisis; Royal Wedding, Jap Earthquake, Bank Crisis. 100m break even IBP was bought just before the copper price went from £3-8k per tonne
• Communication – confidence in boss external – communicate that internally, to rest of management unions, creditors can become extremely nervous and behave erratically
• Banks are major competitors for VCs, until then decide they want out.
• Need to be on the front foot on PR
• Think about box and be able to implement new products, launch new channels to market
• Plan exit before you buy, who will it be sold to, there are many good businesses that can be saved but without an end buyer will be rejected by a VC
• Resourcing keys; credibility and relationships in industry, banks want to know they are selling to a turnaround team not asset stripper, the ability to act much quicker, excellent judgement, manage stakeholders, good intuition and judgement – gut feel, being brave thick skinned
• Why is the market stalled – management teams are better, banks sorting issues in house, cash skills better, turnaround community better structured
• HSBC and Lloyds are now the largest VCs in the world, taking £350 and £110bn in equity in their portfolio in return for debt, and will be looking to exit
• Waitrose Sainsbury, Costa growing, but in the main with £1.9tr of consumer debt retail is as bad again as 2009, 5x retail CEOs confirm as bad as it has ever been. If they could offload 35% of their stores they would do.
• Retailers are working with landlords to fix issues and costs of onerous leases. Out of town supermarket developments are under scrutiny by the government. CVAs are a wakeup call and prepack a complete loss for the landlord, aligning rents to suit the market. This is putting landlord under extreme liquidity pressures; leases have reduces from 25 years standard in 1990 – 7 years currently
• Legislation is becoming more onerous making restructuring more difficult; prepacks being challenged, retention of titles in favour of holder, CVAs, prepack 3 day delay,
• Transparency in the insolvency – e.g. prepack process SIP 16, even considering a sum of money put aside to leave the door open for an IP to investigate the appropriateness by creditors at a later stage

Do you have a business in 2 years?

One of our recent discussions with an EMEA conglomerate president painted a worrying picture. Their ‘value add’ is down to only 8%. With top down pressure on prices and bottom up pressures on cost – ‘we don’t have a business in 2 years’.
An automotive component supplier becomes insolvent, blaming a fall in revenue and lack of bank funding. Unfortunately the pricing & value add mismatch made this inevitable.
A surveying business’ revenue is falling from £11m to £4m and to compound this, underselling and giving away the value they bring.
You can get away with giving away value in the good times, but in a tougher market you don’t have a business if you don’t know, or forgotten you’ve got it and how to sell it.
Do you regularly take a long hard look at your major business models? Do you go beyond assessing how you can become leaner? Do you look for profound technical and operational transformation?
Transformation that will drive your value creation over the coming years, not relying on doing the same thing over again and expecting a different result each time.
That’s why we are launching, as TMA sponsors, our 2 day portfolio executive turnaround program with the TMA. You find full details here {insert link}
On Tuesday, Icebreaker starts work on a client project with a client who is comfortable to ask for help, and secondly, has asked for help early. Meaning both he and we are confident he will have a business in 2 years time.

Between a rock and a hard place – who would be a chairman banker or VC?

Criticised by the press and politicians for not lending to business and stifling the recovery on the one hand yet criticised by everyone for reckless lending only a few short years ago. Now perhaps Sir Alan was correct when he said “The moaners are bust. They are bust and they don’t need the bank – they need an insolvency practitioner”. Many think not.

Bank lending is no longer against cash flows, purely raising funding against the debtor book – the highest profit for the minimum risk. Debt financing is no longer for funding growth it’s the first and last port of call for survival’. This strategy at best stunts manufacturing, at worst kills unwitting businesses without adequate funding for working capital.

As if to emphasise the point further for me, of 400 businesses in a bank’s portfolio recently passed to VC for consideration, only 12 were bought. The rest of these zombie companies remain in the banks portfolio. Interestingly, another high street bank’s head of restructuring recently stated at a recent TMA event ‘all is fine’ in their portfolio’adding he is trying, ‘not to be too concerned about the global financial issues, but what about the long term business fix?’ with his head in the sand, I would be concerned that all that sand is irritating his scalp!

So the question becomes, what is holding back firms? What is stopping your company? What is stopping you?

One of our recent discussions with an EMEA conglomerate president painted a worrying picture. Their value add is down to only 8%. With top down pressure on prices and bottom up pressures on cost – ‘we don’t have a business in 2 years’. A major business review is required and NOW, not in 2 years time!

An automotive component supplier becomes insolvent, blaming a fall in revenue and lack of bank funding. Unfortunately the pricing & value add mismatch made this inevitable.

A surveying business revenue is falling -from £11m to £4m. To compound this, they are underselling and giving away the value they bring.  You can get away with giving away value in the good times, but in a tougher market you don’t have a business if you don’t know, or have forgotten what you’ve got it or how to sell it.

With the growth coming from the BRIC, the baseline expectation of cost is much lower – this should be challenging firms to take a long hard look at their major business models, their product led recovery, and their ability to deliver world class service without overhead. So like Lenovo when they took out IBM from the PC market with a 30% drop in price, they made a step change in competitiveness. We are finding the VC work we are looking at in Eastern Europe day rates are 30% of UK rates, so you have to be smart to make money.

Surprisingly (perhaps), many VCs still do little to manage the companies in their portfolios. This can have a significant impact on the exit price. In one business review, the VC had a value of £3m in 2 years; we had a value of £18m. Its not rocket science, just good management, an exceptional value centric team, and a lean robust delivery model.

Business survival and growth must depend on generating significantly more cash from a leaner cost base; yet everywhere you look it’s more of the same? Not wishing to under value the power of prayer as a business planning tool, it is profound technical and operational transformation that will drive value creation over the coming years, not a reliance on the doing the same thing over again, expecting a different result. In this climate thats a route to unwittingly destroying value built to date.

If it’s just you, it should be easy to fix but it’s probably not, and who do you turn to, thats may have a common objective?. You will need a different skill set. That’s why we are launching, as TMA sponsors, our 2 day portfolio executive turnaround program with the TMA.

Are things going to get better?  The gap in lost GDP per person between the UK and China Q42007 – Q2 2011 is now 40%, Ireland 47% and Greece 41%, Italy 42% and USA 39%. The BRIC countries are tearing away creating huge  shifts in world trade, and with Argentina and Turkey up with the pack racing ahead too, its a good time to think? And if you think it is tricky now, deleveraging and creating a fighting fit business model, wait until we get some real default on sovereign debt, then we can see what the indicators look like. There may come a time – forcing survival without any bank funding.

As for Icebreaker, we have another project starting on Tuesday. The client shares the hallmarks of many firms in trouble with a couple of vital exceptions. Firstly a high integrity boss who is comfortable to ask for help, and secondly, one that asks for help early, rather than when its too late. That leaves us with a much easier problem to solve – delivery for him.

Why is it that lap dancers earn 30% more when they are ovulating, passengers are much safer when a co pilot is flying the plane, and CEOs of distressed businesses go into “mind fixated” inaction?
Yet – our society makes us more accustomed to instant gratification, the timeline for turnarounds are shorter; and everyone has access to more information…
The amount of time a CEO should realistically have to turn a company around is often limited to the cash a company has on hand. Later the engagement – less the time. Companies headed for bankruptcy simply don’t have time to bounce around a heady re-branding. Companies with a relatively reliable stream of cash but a stale business model, such as AOL, have a little bit more leeway, but in fact that is realignment.
“Every retailer in the world will blame the weather for sales,” says Lisa Poulin, chairperson at the Turnaround Management Association and partner at management firm CRG partners. “That’s pretty classic, but at some point?, you’ve got to get beyond that and see what the real issues are.”
Then, little by little, CEOs need to fix those issues. The faster they can, especially these days, the better
Once information is received in our brains it’s often distorted by our minds. Like a retailer that blames the weather on poor sales (that’s a generalization or smokescreen) – a distortion of information received without regard to the real issues. A fixated pilot will often reject screams of terror from a subordinate, but the copilot will listen.
The common link is communication, and having the tools “on the first date” to unravel these interesting scenarios.
The best executive accept there is an issue (they dont know what to do in this new scenario with no previous experience), has the humility to know when to ask for help, the courage to let go of micromanaging the solution. Ironically guys in the board room often get fired. We did some work with a executive with these outstanding traits, and as a consequence of various interventions between 2006-2009 the business generated an additional £45m cash on £91m turnover.
Our issue is that we would like more opportunities to engage with these exceptional executives who have the humility to admit they face a new situation and the courage ask for help..
What next? Call us to meet. We will take your briefing is strict confidence; act as your motivator, to create, support and implement an Action Plan of the steps we would take to motivate you to act, deliver profound technical or operational transformation to get you ahead and get any monkeys off your back.
All our charges will be success related and bespoke to our common objectives PROFIT AND CASHFLOW improvement.

For those that get involved in M&A and turnaround – I think these trends are relevent in challenging the traditional sources of value and margin..

Food for thought;

Consumer demand is > 70% of the U.S. economy, yet consumers are not spending.. so who will buy products and services? http://abcn.ws/okU9sD 

Yet when you look at the rest of the world – there is not much systemically stopping us in the UK, just what apears to be a complacent culture!…The macro economic drivers to address limiting success in the UK (World Economic Forum).. http://bit.ly/qJwnfe

Since 2007 the share of the East has of global trade has widened e.g. 40% China vs. the UK http://econ.st/r6AHLJ

Strange Western responses…
Creating more market trade barriers – Perfect Storm? US Senate to vote to increase duties on Chinese imports, as China’s manufacturing shrinks for 3rd qtr.. http://bit.ly/oEUjTK

Put the plug back in ! – Is the European Financial Stability Facility simply delaying the inevitable? http://bit.ly/rsXNNA

http://www.forbes.com/sites/steveschaefer/2011/09/13/china-alone-cant-save-europe/

For those interested in the macro econonomic drivers of sucess in the UK, this World Economic Forum report provides some objectivity.

Suggests limiting factors to address holding back UK productivity (the driver of prosperity)seem to follow this priority order

1. government budget balance %GDP

1. General Gov Debt

1. Gross national savings

1. Soundness of banks

1. Imports as a % of GDP

1. Business costs of terrorism

http://www.icebreakerexecutive.com/docs/UnitedKingdom%5B1%5D.pdf

http://video.ft.com/v/1145054484001/Chinese-businessman-looks-to-Iceland

Oops a flawed plan

Regardless of the economic climate (whilst it stalls demand) – economic recovery is our responsibility, and it is futile in waiting for banks governments etc;

rather -

“More so than ever leaders of profound and resourceful technical and operational transformation will drive value creation.”

When there is less cash you just have to be far more resourceful, innovative and collaborative to launch and survive in the coming years.

Regarding banks they have pretty much stopped lending against cash forecasts and fixed assets – they will pretty much only lend against the debtor book, and with the PIGS group of countries in Europe, and other macro economic uncertainty who would blame them. VCs have vast pots of money, but they struggle to find good deals, as much depends on the stability of the top line in turnarounds and growth in more traditional investments.

The tough issue to accept like your statement “banks are at fault” is that the UK is the culture of dependency (eg the public sector), leaving a gap in resourcefulness to come back in these uncertain times. Uncertainty for those who wait for it to emerge however is a real problem as human’s don’t make decisions without a few degrees of certainty.

Sitting and waiting is not a good option either without adressing the structural issues as the deficit is increasing 10% without interest, putting us at real risk of the stagnation Japan has faced with their staggering 200% deficit over the last 10 years.

lets get on with it… regards Tom

interesting times with the colourful backdrop of the USA and some parts of Europe going bust, it’s not surprising the banks aren’t lending? In the real world many businesses are doing well; automotive and aerospace engineering; in the UK, but tragically there are unnecessary casualties. We still find Alan Sugars’ hypotheses that most businesses (as is) asking for money actually need an IP, still holds water. But there remains so much misunderstanding around financial turnaround. The backdrop might sound dire but it’s our choice as to whether we batten down the hatches, or get excited and get on with it.

why do most businesses go bust? In a turnaround external professional service firm’s (PSFs) dance around the business owners and try to sell services to the failing management. Icebreaker finds “all knowing” turnaround professional solution to be flawed; being a true professional is more about recognising when to take advice. No matter how technically capable the turnaround team – the business often fails, leaving the turnaround VCs circling to pick up a bargain after the PSFs fail to engage. The inability of the PSFs to engage leaves the failing business owner bridgeless sailing often close to the wind, always into unchartered territory with a cargo of rats… the classic hindsight of the failed business owner is – if only I had acted!

setting the bar too low why does it matter what good looks like? The tragedy of the standard due diligence process does not identify what the business could achieve, nor is the proposal “owned”. Furthermore if you don’t set the bar high enough – it is like a thermostat – you will never realise the business potential. In the last 7 or so turnarounds icebreaker have led ,we have leveraged our award recognised experience to realise about 30% more value than the standard process had identified. That said our primary focus is taking ownership and delivering the outcome we set out. A financial turnaround is not about growth and nice to have improvements;–the prerogative is to run the business pared back to its profitable core, yet resourcefully and sustainably achieve new highs in performance; requiring outstanding resourcefulness and management skill.

just fire the management? Do you recognise the human roadblocks to the outcome you target? How do you get buy in turnaround situations? How do you leave a successful legacy in a distressed environment? How do you avoid an insolvent liquidation or the abject failure to engage? Or is Jon Moulton right that VCs should only invest in businesses with dire management? There is no doubt that the issue is always traced back to incumbent management decision making. Interestingly the team behind Open Ocean are an example of a new breed of funds in Europe: entrepreneurs rather than ex consultants, bankers, etc i.e.: previously successful, so bringing a level of confidence – not oblivious to execution challenges.

the paradox of turnaround Even the very best turnaround executives and business owners are human beings. Humans during a turnaround or during another time of extreme difficulty; tend to malfunction – yes malfunction. The insightful turnaround manager builds a legacy, yet the words often used during a turnaround are stressful, confrontational and high risk. Turnaround Execs are too often real destroyers of value. The professional accreditation bodies of turnaround professionals too are at odds – the IFT like to play to the worst fears of the banks pushing narrow financial restructuring solutions, yet the TMA recognise turnaround requires extreme focus, a real spark; innovation and breadth of skills are what is required to resolve the complexities of a turnaround.
standard pitfall. The inability of experts to engage is the main cause that leads to the business having to enter administration. In turnaround scenarios clients are distressed and nearly always in denial. The ability to engage with customers and to be able to get to productive dialogue at the first meeting is the difference between success and failure.

skills because even the best fail to engage – customer businesses are unnecessarily put at risk, icebreaker spent 2 years 2006-2008 developing professional development for their team with John Webster CEOGB an investor and BIMBO pioneer. The event enables C-level executives to recognise the human roadblocks, how to engage and get buy in turnaround situations. It is grounded in some tools core to icebreakers award nominated work, and best practice ways of engaging and implementation. We run this intense 2 day event at Ashridge Business School; providing an excellent opportunity to network with C level executives and leading like minded professionals, and probably rerun the event later this year in September.

The driver of the success is defined by the ability to engage. The icebreaker team are experts at engagement.
If you are up for “raising the bar” call us on +44 (0)207 193 5518 or E: office@icebreakerexecutive.com

Sincerely, Tom

Forward “This event enables board level executives recognise the human roadblocks to the change they introduce and how to get buy in turnaround situations” John Webster CEOGB

The paradox of Turnaround Management. The best turnaround executives are all human beings. Humans during a turnaround or during another time of extreme difficulty; often malfunction. The insightful turnaround manager builds a legacy, yet the words often used during a turnaround are stressful, confrontational and high risk. Turnaround Execs are at real danger of destroying value. 39% of businesses consider they implement change poorly, yet during these extreme crises the client typically only uses their own staff.

The pitfalls. The inabilities of a turnaround manager to engage is often the cause most businesses enter administration. In turnaround scenarios clients are distressed and in nearly always in denial. The ability to engage is simply essential in order to make sense and unravel irrational information the turnaround executive receives. The outcome of applying the content of this intense working event is a vast improvement in resourcefulness – more from less and standalone capability. This is essential in the case of a turnaround = when the business is pared back to its productive core.

The skills to succeed. Whilst knowledge of how humans behave in difficult circumstances is a relatively new science – an adequate executive skill set to cope with the trauma associated with a turnaround does not seem to emerge from education or vocational experience. In a turnaround customer behaviours are always entrenched and reasoning distorted, leaving those engaging without the right skills at grave risk of destroying value. This often pushes a troubled business past the point of no return, and or leading to firing the wrong people. This intense 2 day event develops the skills for experienced C level or Turnaround Executives to leave a successful legacy. The legacy or retained values differentiates a good turnaround vs. an insolvent liquidation or the abject failure to engage at all.

Resourceful. This program enables the turnaround executive to leverage the latent client resource rather than flooding the business with expensive support. By addressing the “People side” of turnaround management the incumbent team if led in the right way – can have a chance to develop the skills to succeed in their new environment.

 “Without doubt the most powerful formal learning experience of my life. Everyone who participates with an open mind will come away from the event a changed person. A must for senior management operating in a rapidly changing environment”. Sean

“In an incredibly short period this course imparted, not just mechanistic knowledge, but deep understanding of the principles behind the proven tools for coaching at senior levels. I can see that, with a little more diligent practice, these tools will make me a significantly more effective leader that is extracting the highest possible performances from my team.” Alistair

“Excellent content and format, I believe the Course will help me to win business and manage engagements far more effectively.” Darrell

About John Webster. The 2 day event is led by John Webster. John has coached over 1000 CEOs and trained over 100 senior executives on the CEO Masters level executive coach training program. John is a leading portfolio chairman who has operated in the private equity market for over 35 years.

Location: Ashridge Business School. Friday Accommodation at Ashridge is included in the course fee, where all attendees will be invited to take part in a dinner. Thursday and Friday evening provides the perfect opportunity to socialise and network with other senior executives in a friendly and relaxed atmosphere.

Reserving a place; For the next date through the contact link or directly to: Phone: +44 (0)207 193 5518 Email: office@icebreakerexecutive.com

Research by Feltham & Hughes (1999) who utilised it with 94 experienced senior interim managers (drawn from a database from PA Consulting), and compared it to 149 senior managers from permanent jobs. Statistically significant differences were discovered for 12 of 20 scales. These were:

Role of the hard worker – Higher
Need to control others- Higher
Leadership role – Higher
Organised type – Higher
Integrative planner – Higher
Need for rules and supervision – Lower
Conceptual thinker – Higher
Need for change – Higher
Need to finish a task – Higher
Ease in decision making – Higher
Work pace – Higher
Need to be forceful – Higher

Source – Sean Crawford

Who makes a good interim manager and who should persue interim management as a career?
There is no doubt interims and more nature than nurture. It certainly does not follow sucessful senior execs will make the most successful interim managers.
A typical Interim Managers profile puts us in a very small subset of the population. This too is a limiting factor in terms of growing interim management as a solution – as buying CEOs have a very different typical profile too. Icebreaker has developed a very clear view of this to support an interim manager’s decision making; as a consequence the icebreaker team to complete a profile tool to check this. This analysis came from my own curiosity as no-one helped me in my decision making as to whether interim management was for me.
This reality presents some interesting challenges – interims are better as interims and get bored as FTEs (Nyenrode University). From the other side of the fence customers should recognise the value of this diversity and in the right circumstances use interims. These characteristics make us very comfortable in adverse circumstances when FTEs e.g. at these times are more concerned with the longevity of their careers. Organizations that recognize and manage diversity deliver outstanding results, more often terms such as blockers or mavericks are used when this diversity is where the money and high performance is. I look forward to the result its making meaning to the endless rants interims vs. consultants vs. FTEs
Interim assignments vary only in terms of circumstance which can dictate a different approach. In terms of personal traits – I’d argue and on the ground have consistently found the aptitude is the same, driving process – the capability to seamlessly engage, deliver change and exit.
Self awareness is vitally important to make us a whole lot more effective. Executive coaching skills enable us to be a whole lot more effective along with cutting edge varied experience to enable us to make sense of most circumstances. This is central to making sense of the capability an interim manager and an area where thinking converge – Nyenrode University seems to lead in this area.
Whilst cloning is absurd notion – there is very definitely a set of characteristics that suggest we should or not be an interim. Those on the cusp I find lack the natural tenacity to see through the toughest times on and off assignment. The market at the best of times is tough enough to weed those out.
There are 2 other types – those that drag out assignments and the unemployable exec who do rather confuse the picture.

will have a different profile vs. the SCD / MD / OPsD / general managers that handle the most challenging large scale change with large numbers of people reporting to them – where the right profile becomes central.

We can and do learn those things that don’t come naturally but will not remain effective for extended periods of time, if we don’t play to our strengths. Its recognising this diversity and additional strength that an interim brings is key to engaging the interim; I expect this difference will come out of the results of the working interim population loud and clear.

Managing diversity in large organisations seems to be replaced by the opposite – defining and measuring individuals vs. the norm organisational behaviours, which is the killer of innovation, high performing teams or “the effective human being”

Developing passionate business relationships: I recently visited an unassuming garage specialising in 911 tucked in the middle of no-where in the Gloucester countryside. On arrival the business owner generously greeted me and engaged in conversation enthusing me about his 32 years looking after the air cooled forerunner  the 2.0 Porsche 911. At nearly 70, despite his wife’s suggestion to slow down, he was making plans to expand and create an engine rebuild room to support his young team. It was clear there was nothing he did not know about the product, yet when his team got stuck he just listened and asked questions? I arrived at 10am and had to be back at Ipswich at 4pm so there was a rush on, so 2 of the guys got started. While stuck there I requested an internet connection. Their response was they did not have broadband as it was unnecessary; explaining that their customers promoted them on the web forums and they did not need the extra business. So I sat on one of the 4 seats from a back seat of a coach that was the waiting room, and without being asked his 20 year old son made a tea, and apologised for the mess! The team got straight on with the job; they were clearly fully engaged to get the job done, taking plenty of care whilst engaging in appropriate banter and strikingly calling on the girl in the office to support them who happily held the exhaust whilst it was being removed. This was a staggering team that was fully engaged in their common purpose – passionate and motivated yet stuck in the middle of nowhere with the potential to do far more business than they could cope with. Why was this?

Are you passionate about what you do at work? Does your boss value your input or are they too preoccupied with their own agenda?

What is it that enables these people to excel at what they do? Do you let them do their own thing and what do you do when they get stuck? Do you support your team’s objectives or just set them?

What were the characteristics of your boss when You performed at your best?

What is your management style? If you are the boss your team will all behave just like you, so if you ever get an adverse response – grab a mirror and have the courage take a look at what you are doing…

Exactly the same methodology albeit on a slightly grander scale, was deployed on an icebreaker project to turn around an aerospace engineering team within a leading global group. In 6m the basis of a centre of excellence was created, and highly challenging / supportive – motivated environment.  click here for case study. The SME boss seen here repairing the MX bike, is a great role model who has created an unassuming environment for his team to excel.

What is the main driver of an outstanding customer experience? Simply – a well motivated team

Tom (Owner Icebreaker Executive Interim Management)           office@icebreakerexecutive.com    T: 0207 193 5518.

People development – central to performance Aerospace case study

Interim Role : Aerospace Engineering Transition Director – Head of Engineering Turnaround

Background:

The business is a £130m subsidiary of a major Global Aerospace Group. The products and programs are complex high technology and engineering  led. The board had failed to capitalise on the high growth potential to design and build aerospace engine components at this traditional facility. With a history of over 80 years aerospace deign – manufacture A series of initiatives led by an recently promoted engineering director had failed , and no one knew why. The legacy was serious motivational, cost and quality variance, delivery , and customer  satisfaction matters. The issues were due to s systemic cultural gap sin professional management at executive level, that required a different approach that went beyond the norm of the aerospace industry. The objective as Transition director and Interim Head of Engineering was to  turnaround the engineering capability / to create the capability on which to grow the business and attract some major product development to raise the value add and profitably grow the business.

 Ability to integrate into the client company:

Immediately implemented a team motivation plan to retain and develop the scarce resource. Working very closely with the MD and other key board members, “Integrated quickly into the client team”. “Within 3 days identified  the issues,” Defined and implemented the team development, engineering structure, and outsourcing strategy and recruitment requirements to create the capability to 100% deliver on time to budget.

 Impact on the business / bottom line:

“Significantly over delivered in unexpected ways beyond the brief” “delivery across many aspects to create a stronger team with adherence to the new structure”, “protected bottom line through risk reduction” devolved ownership of the budget with the team structure of KPIs /governance process. “4 pronged” Vendor collaboration strategy implemented creating new ways of working for the Aerospace industry. Attracted  through uncompromising recruitment process some of the best industry experts. Created the basis of the Engineering Academy and create a centre of excellence. The recently appointed engineering directors role was once in question, but as a consequence of the work done / structure created raised  the bar to outperform some of his peers on the board. Customer satisfaction raised from 55 – 76%.

 Working style

In order to create a centre of excellence  a complete focus on creating a high challenge / supportive fast learning motivating environment “Very challenging,  with a tendency to solve every issue” delivering an outstandingly capable team delivering complex aerospace engineering on budget on time, with the internal framework and supporting capability to create the basis of a centre of engineering and customer excellence, and attract and develop the best team members.

Leadership / people management skills

Very strong challenging but highly supportive leadership, “the engineering team could not have performed at that level with out your support”, “the behaviours now support the structure and need to move forwards”. Whilst stakeholder management was complex until the engineering directors capability was confirmed,  he is now performing better than most of the other board members managing a very complex customer facing high tech engineering environment with a team capable of becoming a centre of excellence

“Delivering Results, Transferring Skills and Leaving Legacies”

The bean counters DON’T make any difference; The weak link in many failed companies is NOT the finance director; simply the operation could generate more cash. Better business management prevents disaster. In most cases the FDs words betray them as much as the numbers. In the face of a disaster the FDs classic excuses. ● “I don’t do cash forecasts. I’ve never found them useful.” ● “Sure we’ve made some losses but look how much we’ve grown turnover.” ● “I don’t know whether this customer account is profitable. What I do know is that we can’t supply them enough. They love us!” ● “You just don’t understand our business. We’ve always done it this way.” ● “I don’t actually prepare the management accounts.” Don’t forget Procurement – “delivering more value at less cost”; the misconceived view of procurement is simple cost savings. In fact the benefits of effective procurement can extend beyond functional boundaries. Procurement creates the ability to create a robust business model, collaborate internally & externally enabling the organisation to be more agile to changes in the business environment. Good procurement shares several common characteristics; ● internal and external cross functional cooperation and collaboration.● Standardised sourcing processes across the business.● Supplier performance reporting ensuring compliance with service level agreements ● Automated requisition/order activity and other non value adding activities. ● Remuneration & reward linked directly to the achievement of functional objectives. Getting procurement right – a 26x return on the project; the scenario; manufacturing comprised of 3 million hours pa covering 20,000 SKUs. We were engaged by a division losing money and facing 2 choices – Closure or radical restructuring. Procurement were part of the multi functional change management team that quickly identified the direction, options, approach, deliverables & timeline requirements and completed ahead of schedule. The benefits delivered were as follows: ● £3M savings delivered. ● created and recruited the team and first multi functional Strategic Sourcing discipline in the client Group. ● assessed and introduced 37 totally new suppliers into the client inside 4 weeks. ● successfully transferred 3 million machining hours to newly selected supply base. ●created the purchasing processes and framework under which the new function operated. ●substantially improved overall service provision – right first time & on time in full. ● A return on investment of 26:1. By any “bean counting” yardstick a staggering ROI? Tom Pickering (Icebreaker Executive CEO) office@icebreakerexecutive.com T: 0207 193 5518.

A public sector perspective on resourcing change:

- Recruitment = contract or at best gap / project management
- ”Outsourcing savings” – they will move the problem a-b and increase end-end cost.

The key messages advocate the delivery of these changes in a different way – using interim management might be;

- resourcefulness – more from less
- retention of key skills – make better use of scarce resource
- upskilling of management / scarce resource / team accountability / development etc
- better service at reduced cost but unlikely outsourcing.

The odd aspect to this is following the dramatic cost increases / marginal service improvement of the last labour government and their advisors, the same advisors are now advising outsourcing, rather self fulfilling one might say?

Need drives and the country by most insolvency tests (even following the government having changed the rules!)is technically bust – so grass is green.

Its not a straightforward sale – more akin to the challenges engagement with a client faced with a turnaround, but fortunately for them its our money not theirs! so self preservation rules ok, and thats the space to irrationally revert back to what you know for the sake of achieving ceratinty – we humans are flawed creatures..

 “Delivering Results, Transferring Skills and Leaving Legacies”

 The dangers of generalisations. One of humankind’s greatest characteristics is our ability to learn and recognise patterns. Our ability to compare, categorise and classify is unparalleled, but this ability to see patterns (even if they don’t really exist) can get us into trouble. Hidden within the great debates and discussions concerning the environment and there are a plethora of generalisations. As we all know though, generalisations can be dangerous as they don’t apply to everyone at all the time. IN good times as well as bad, there will always be those who will do well and those that fail. One generalisation that does hold true though is that there will always be those who unnecessarily fail.

The Paradox of Resourcefulness: The headlines concerning lack of liquidity are wrong; there is plenty of money available to business today. The problem is that the money is on offer to businesses that don’t need it.
Meanwhile Banks are exiting real businesses like LDC that do. Inflation is increasing and liquidity reducing; it’s a time for extreme resourcefulness. Consume less to mitigate inflation, leverage working capital and adjust your business model and you won’t need more cash.

News from the front line…

Skills shortage? We are currently working on an assignment to support a large subsidiary of a growing aerospace engineering business, looking to develop the capability to launch new products. For the last 3 years the very capable incumbent engineering director and managing director were at a loss as to the serious motivational issues facing the engineering capability. After 3 days of taking responsibility we surprised the HR director with our early assessment, found still to hold water 3 months in. Since them we have restructured the team, and most of the way through implementing the strategy. The recently complacent team have now been restructured and leading the charge to create the engineering academy and turnaround the facility, and executive team developed to take the reins. At the monthly review today the former engineering manager said – “the team have turned around and are now driving the strategy”

Integration challenge? Just recently we have started 2 programs to close a UK site and integrate the manufacturing, sales and back office functions into an EMEA hub, as well as drive integration where the team had been cut back whilst making great profits there was no sustainable core or business process. The client selected us because since our first award nominated engagement in 2006 it’s accepted we always commit to completion on time, challenge and improve on their target timelines. Such is the hard earned level of trust – such is the return on investment; their view was that is about return, not pricing. Interesting for a recession?

Educating banks! After about 2 years of working to create deal flow from the banks we have finally engaged with a high street bank along with Mazars to oversee the support of their portfolio in the South East. A special lending manager was surprised at our speed and ability to review a SME manufacturing business which quantified both the minimum improvement in profitability and cash that we could achieve. Following our oe day assessment we developed a plan that challenged the client’s subsequent request for further funds. These clients need support, but further funding often only serves to reaffirm a rotten status quo.

“You can’t fire ‘em all” We are a team of 20 highly experienced interims, with the courage and ability to calmly and seamlessly engage with successful and failing management teams that need help from time-time.

How do interim managers do this? Icebreaker focus on seamless engagement, outstanding results and leaving an enduring legacy…The team are all living proof of succeeding from the most demanding environments; rigorously selected based on considerable research into who makes the best interim managers. We have the courage and knowledge to know when to commit or conversely when to walk away Our strategic partners to do pretty much anything without the caution, hype and cost of dealing with “a big 4″. We simply trade on our proven track record, and enjoy building capability from the most adverse challenging start.

If you recognise any of these situations in your organisation, please get in touch. We are happy to have an informal chat although we generally find doing is ultimately more productive.

Tom Pickering (Icebreaker Executive CEO),  E: office@icebreakerexecutive.com   T: 0207 193 5518.

“Delivering Results – Transferring Skills and Leaving Legacies”
www.icebreakerexecutive.com

Sweeping generalisations about the demise manufacturing are the breeding ground for bad decision making. Sure some products should be made overseas. Sources of competition are in design – manufacturing, technology, supply chain, value engineering and our ability to work together. At present extended supply chains are very fragile at responding to falling demand, causing many business failures, far more its about using regional manufacturing supply chain and design as tools for effective working capital management and serving local markets. An award winning UK electronics manufacturing plant I ran could compete globally where labour costs were <20% of the value add, and I focussed the entire engineering team on value engineering and taking labour out accordingly.

Automotive requires a short supply chain that cannot be served from the far east, and with rising near east costs manufacturing are forcing sourcing products with high labour content to N Africa, and or back to the UK.

Its about how you arrange these elements of the supply chain that creates a position of competitive advantage, and manufacturings position in that chain justified accordingly.

Skills shortages – are a hidden element as many people have been absorbed back into the economy. To get these people back into manufacturing – the opportunity and the management of these organisations need to address the “attractiveness gap” to make the organisations attractive career choices and places to work.

Is more of the same the answer to the current Financial Service crisis..?

A sample recruitment scenario – is current sector focussed recruitments digging us deeper into the same hole?…

quote…

”

Our client is a Large Financial services organisation based in London. This role is required to work across the organisation, coordinating and driving all activity to enable the business to develop and move towards the functional based Target Operating Model.

The Interim Manager

You will have at least 5 years Organisational Design experience gained within the financial services sector, ideally insurance.

”

quote ends

Surely the candidate brief should read… MORE LIKE THIS?

You will have at least 5 years CUTTING EDGE OPERATION AND Organisational Design experience NOT gained within the financial services sector, ideally NOT insurance.

“Delivering Results, Transferring Skills and Leaving Legacies”

Thinkers and Doers. What is really striking about this recession is that the Doers are waiting and Thinking! Yet bankers’ strategy is to wait and see like rabbits caught in the headlights BUT now for the first time are left holding the baby, and need the Doers! A return to basic banking is no bad thing, but there is still a requirement to manage their stake as providers of capital in the meantime. It is absurd too to generalise as each situation requires support case by case.

The “top 3 recovery favourites” are: 1. business development 2. performance excellence & the 3. right direction.

1                     On business development What about the global shift in gravity to Asia? Tony Tan at GOC a £64bN sovereign fund “economies will take a long time to recover from the crisis”… “The vast deficits and lack of reserves leave them more prone to systemic risk”. …exposing the unwieldy… “We have been knifed in back on Trident says anon MOD boss”. The banks simple view of turnaround – is locally to withdraw their funding to recover their positions BUT in the process inadvertently destroy their position and whatever remains. Jon Moulton sums up the situation on a macro scale… Corporate failures are only about 25% of the 90s yet 2010 is a recession 3x the scale! At the same time HMRC debt may be called in – the estimate is up to £25Bn – but can’t be sure as government don’t tell us. Watch the generalisations.. UK has a poor manufacturing future! And finally! The thing to watch is who is doing what in a crisis; the surest route to accelerate failure is when everyone stops doing their own jobs, and or faces circumstances without the skills or experienced support. With the sensitivity of the UK to increasing inflation, increasing interest rates and cuts to the public sector – The only certainty is probably further fall in revenue? Engage the Doers…

2              On performance excellence – We find Icebreaker clients are faced with 1 of 2 of these challenges:

-Turnaround Those that immediately need money to survive, but can’t get it – icebreaker have a fully integrated project managed turnaround solution, to identify and deliver the plan for the competing stakeholders, management, bank, owner, new investor, creditors and debtors etc. We are now supported by 4 professional service firms, 3 VCs and 1 private investor, and our team some of the best turnaround and hands on practitioners in the UK. The current strength of the Banks means that they can simply start to pass these opportunities to us early to support their clients avoid an insolvency and if we can recover the position for all parties. More

-The Well Managed Corporate with money, struggling managing business as usual along with their projects, but can’t justify expenditure, so do it themselves. Often staff has been reduced, facing falling revenue or growing and struggling to meet demand, cash generation, motivation and client satisfaction being the main casualties…

-> Icebreaker partner with Emerge – many organisations are not getting the motivation from staff that they need to achieve targets.. “An analysis of over 900 firms”..” finds that 46% of organisations experienced a decline in engagement levels in the quarter ending June 2010, with a mere 30% noting an improvement”, (Executive Grapevine 2010)So what can you do to create a climate of empowerment? The driver of customer satisfaction is your staff engagement and motivation. Your company’s success and agility depends on the performance of your people. Emerge work in partnership with icebreaker clients and change leaders to engage and develop their people to create the agile culture that produces the best results, more.  In these circumstances, Icebreaker provide the interim leadership to take advantage of the people and cultural change opportunity a major program presents, by delivering outstanding results from existing resource, using your own people with minimal external input.

3.            On the right direction our business model focus is Right First Time our team based approach is a multiplier to support making the right decisions first time – based on hard facts and combined on-hand experience of delivering performance excellence within c.400 plcs.

Interested to know more take a look at our case studies. www.icebreakerexecutive.com

In all this uncertainty it’s oddly quiet and we could do with more business, call us well sort a pragmatic solution for you.

Tom Pickering       (Icebreaker Executive CEO)               office@icebreakerexecutive.com    T: 0207 193 5518.

“An analysis of over 900 firms by global HR consulting and outsourcing firm Hewitt Associates finds that 46% of organisations experienced a decline in engagement levels in the quarter ending June 2010, with a mere 30% noting an improvement”, (Executive Grapevine 2010)

Icebreaker partner with Emerge to address the 2010 employee engagement challenge

Your company’s success depends on the performance of your people. Emerge work in partnership with icebreaker clients and change leaders to engage develop their people and create agile culture to produce the best results. The resourceful outcome is more from your constrained resources through increases in motivation, productivity and client satisfaction.

Here are just a few examples of courses, workshops and cultural change projects we have been involved with:-

• Preparing for change; Change leadership awareness and development
• Leading High Performance Teams; Team Strategic Planning,
• Creating a agile Culture; Coaching Intervention to support management skills

Creating a Coaching Culture

Creating an agile environment that change is what a coaching culture is all about.  Emerge combine coaching to the culture and strategy of the business, and support icebreaker programs by introducing better tools for change. We can work with the client’s internal resource to up skill them, and introduce a new set of skills to support management be more effective on an everyday basis

Tom Pickering • 

One can address some of the QA and external commercial issues but there is far more of a threat to the ISP Interim Service Provider Model “lurking under the waterline”.

With my turnaround hat on many interim providers needed refinancing last year. 2010/11 is Alot more challenging. You could argue it will shake out the weaker providers, but there is an opportunity to fundamentally change the business model now to prepare for the rocky ride rather than wait and fail.

At which point you may as well sort the experience and create a more robust model that works a whole lot better and profitably at the same time. The “successful Interim management providers” like Interim Partners et al, will have even more demanding owner investors, that have expectations that go far beyond survival, and failure to achieve growth and revenue targets will cause management problems and changes too.

Without wishing to state the obvious Profit is essential to survive and we find interim provider model is not sustainable to do business at less than a 20% margin.

If you do what you do over the next few months – the facts and climate suggest you won’t even get what you’ve got. E.g the recession is 3x worse than 1990s now and there have only been 25% of the insolvencies.

Interesting times for us all.

“Delivering Results – Transferring Skills and Leaving Legacies”

 Why is it quiet? “Many businesses are failing to call in turnaround specialists – as they don’t recognise they are struggling” – Telegraph 2008. More complicated capital and stakeholder structures make it more difficult to save ailing companies – PWC 2008. “The UK is the only country that does not have a plan to clear their deficit in 5 years. The Banks behaviours are dominated by “extend and pretend”, or “a rolling loan gathers no loss” Low interest rates are artificial through the Bank of England printing £200Bn of cash” – Jon Moulton

What’s the problem? UK plc has not admitted a problem, rather has just printed c£200Bn of fresh capital and taken control of the banks. A parallel Our deficit is rising faster than Ireland – Ireland was heavily reliant on property BUT they could not devalue their currency, resulting in a weak economy and bust banks. UK Property companies remain the hardest hit –over 75% of UK bank lending being in property, and only 3% to industry.  A perspective? “The UK now has 2x the debt vs. GDP and 1.5x the deficit vs. GBP of the 1970s, and maybe a deficit rising at the same rate of 1944. “Will interest rates right suddenly? – Yes they will. The UK is very unnatural; very low interest rates, state owned banks, politically run insolvency and restructuring processes, massive HMRC funds held, which will all reverse when interest rates rise. An Interest rate rise will drive up the cost of servicing debt, causing the economy to go further backwards. Sustained growth? UK plc can’t keep solving the problem of too much debt with more debt. This is a period of distress, a 13% deficit and time for recapitalisation. A bit more debt will rebuild short term inventories BUT if the cost of debt service does exceed growth we will be in long period of decline. The Public sector; The UK economy is dependent on the state for 60% in some areas; 30% from the public sector 30% dependent on the public sector, and only 30% private sector. The economy can only grow slowly because unwieldiness of the public sector; its complexity is crushing productivity.” – Jon Moulton

When will it happen? The trigger will be the interest rates rise, which is withholding huge pent up demand. Corporate failures are only about 25% of the 90s yet we now have a recession 3x the scale of the previous one! At the same time HMRC debt may be called in – the estimate is up to £25Bn – but can’t be sure as government don’t tell us.

The Solution. Tax – no more than £10Bn of increased taxes is possible. Reduced Living standards, through reduced wages; inflation will reduce our ability to buy consumer goods. The answer is that we need world leading industries, this is what we have to build from and we all need to make them great places to work. Fortunately we have a number of successful clients who are acting early.  Icebreaker programs are a more effective solution to turnaround and deliver lasting improvements. We do this by pragmatically applying our multi sector award winning experience to provide clients the framework for increased engagement, responsibility & innovation to deliver value at every level. This in turn transforms the customer experience.

The opportunity. There will be opportunities for restructuring skills of every type; it’s much cheaper to rescue a viable company than close and start again. Rescuing viable businesses is about changing the operating strategy, recapitalising and stopping cash negative activity rather than growing. As the UK has so little natural resources, and we have a pact with the ROW to provide them we have to focus on being smarter than the rest about the way of working & collaborating AND it’s NOT just about technology.

But who will point out the problem? Pass the mandate? And who has the skills to engage in these circumstances? Banks will offer a chance if there is a visible business plan – said ONE respondent!

 You cannot correct the course of something that is not moving! “Cometh the hour” “cometh icebreaker” “cometh the action”

Tom Pickering CEO,            E: office@icebreakerexecutive.com                                 T: 0207 193 5518               .

Question – Does anyone agree with the old maxim – “if you can’t change the person. change the person” ? Change can come in many forms. There are those who accept it. Those who embrace it and those who block it. In all cases, change must be delivered by people. What to do with the ‘blockers’ ?

….

Our findings are that organisations are largely responsible for creating individuals and strange behaviours.

Best way to test capability – is to provide the opportunity to test the capability – that on most organisations is often a unique experience. Some capabilities are core to roles (non negotiable), some not core.

Those in roles without the non negotiable capabilities should be moved, or exited if there is no role for them, some non core capabilities can be learnt.

Change programs are great learning opportunties for staff regardless if they are staying or leaving.

Interim managers should be very good at testing capability and identifying who is underutilised by asking questions in the first 2 weeks of an assignment. Providing testing opportunities sorts the “talkers” from the “doers”.

Simply firing people without testing capability – is macho and reckless destroys substantial value, and infact prolongs programs.

Organisations very rarely provide worthwhile opportunities to test capabilities, and giving people responsibility is highly motivating.

You’ve typically got 2 weeks to decide and agree who stays and who goes, after that your often stuck with what you have.

You have to know how and when to switch mode mentor, coach, director, one size dont fit all. Turnaround and relignment require different approaches. And program decision making should reflect these differences.

The fastest and most effective way to get something done is to get the right team in place and then let them do it. The notion that complex programs can be simply program managed is flawed – need everyone thinking and managing risk in a decentralised way.

You need different people and complementary strengths in a team – on size do not fit all! Some viewed as blockers, can infact just need a bit more time to think and sweep up behind the “program drivers”.

Lastly – and interestingly telling people does not work, matching capability to roles, creating boundaries escalation structures and delegating and managing performance does.

On the BA dispute – most of the issues there as ever are in my view down to mediocre management, led from the top.

Have a good day! Tom

“Engaging, up skilling, delivering value and 2010!”

Everyone in Britain is aware that the new Government will make tough and very unpopular decisions to address the £160Billion++ budget deficit and the national debt which is expected to reach £1.4Trillion: some of the more likely options are increasing the rate of VAT, reducing public sector pay and pensions, cancelling infrastructure projects, increasing the retirement age and cutting welfare benefits.  All of this will unfold in the context of great uncertainty regarding the economy and financial markets here and abroad. Whilst there are some refreshing “seeds of commonsense” appearing; no one can accurately predict what will happen if the Government’s cures are not favourably received by the market; exchange rates; tax rises and spending cuts; inflation; interest rates; perceived Chinese bubble bursting, impact of US bank regulations or the debt crisis in America. Indeed, with Britain’s unspoken total debt (national and household debt, but not including pensions and off balance sheet liabilities) approaching that of Japan’s at almost 300% of GDP, and the rate on 10-year gilts having risen recently to 3.89% (settling at 3.79%), some intelligent ‘guesses’ can be made about the UKs macro economic climate.

But, even with all these great excuses to do nothing, businesses can respond positively and proactively to this very uncertain and potentially risky environment, and that applies particularly to bank, equity investments, new and old.

PE funds and banks need to shift their focus from

1. PLAN A: Market-Led Value Creation i.e. realising financial value through financial engineering or divestment

To

1.  PLAN B: Business-Led Value Creation; creating the underlying ability of a business to deliver sustainable cash flow.   more

How should banks and private equity investors approach Plan B?

1. 1.        Mindset Change –Private equity investors need to take on board a mindset change from financial engineering to business operations. more
2. 2.        Business Value Creation Creating a emerging view of the future in an uncertain environment needs to be at the heart of the new business plan, with innovation, operational excellence, marketing effectiveness, and customer service are some examples where a PE fund can actively steer a management team to focus their efforts. But, enormous agility will also be required to address new market conditions when (not if) they emerge, and experienced globally aware managers must be in place to move in concert with what could be a paradigm shift in business reality. More
3. Business Plan To get investment most businesses need support to define a successful outcome and investor exit. Build a 3-5 year business GROWTH plan, not one which simply cuts cost from a financial perspective to build profit in the short term. Be prepared for lower profits in some industries for the next 3-5 years, or until the market dictates otherwise, and have more importantly develop the agility and low fixed cost base to respond.
4. Management Team; re-assess the current management team and determine whether or not they can deliver in these unstable times and under the new business plan, and able to work with its employees to maximise efficiencies.
5. Measure, Manage, Improve, “If you can manage it you can improve it!” Cash flow management is key; but with full consideration to innovation; one of the fundamental drivers for private equity investors in pursuing certain investments. Business improvement initiatives need to include establishing a well structured team, cash flow management, up-to-date technology, robust and highly flexible business processes, effective revenue generation plan, a constantly re-aligned business marketing/sales strategy that will be successful in a rapidly changing, competitive market place. Three key KPIs to measure are: Cost to Create, Cost to Produce, and Cost to Service, with minimal fixed costs.

The decision is yours as to when to act. On June 22^nd public sector budget cut plan; 30% of shoes and c40% of PCs are bought by the UK public sector, maybe a good time to review and challenge your existing support requirements? A good process is still not enough; you need the means of engagement as well as the mandate. Good ideas and processes are useless without the ability to engage, deliver change and in the process of doing so build value. May sound easy? – have you ever tried engaging with an owner manager in a turnaround – that’s why icebreaker take the development of our team, engagement process and evolving own agile model so seriously…

Toby Tarczy

Business Executive with Icebreaker Executive Interim Management Limited E: office@icebreakerexecutive.com T: 0207 193 5518.

Our findings are taken from an article written by Toby Tarczy and Gerald Hogg, “Challenges Facing Private Equity Backed Investments”

1. Business Value Creation

Value creation in an uncertain environment needs to be at the heart of the new business plan, so that there is overwhelming evidence that will attract either new investors, or an opportunity to sell. Innovation, operational excellence, marketing effectiveness, and customer service are some examples where a PE fund can actively steer a management team to focus their efforts. But, enormous agility  will also be required to address new market conditions when (not if) they emerge, and experienced managers must be in place to move in concert with what could be a paradigm shift in business reality.

How should private equity investors approach Plan B?

 Mindset Change – Market Value Creation vs. Business Value Creation

Private equity investors need to take on board  a mindset change from financial engineering to business operations. The investors need to surround themselves with the right business professionals that will focus on creating value from the business. Experienced entrepreneurs, skilled business professional, and/or industry captains who have “been-there-done that” and are the real deal is what is needed going forward, not MBA analysts. These investments are businesses and they need to be addressed, accordingly. This is even more of a fact when every decision is challenged by uncertain macro economic factors.

 It is vital for PE firms to explore the full business-led value creating potential of their business portfolio and look to bring in the necessary expertise that will adapt quickly to changing circumstances and to determine what the full potential should be.

PE funds need to shift their focus from their

1. PLAN A: Market-Led Value Creation i.e. realising financial value through financial engineering or divestment
2. to PLAN B: Business-Led Value Creation, i.e. improving the underlying ability of a business to sustainably deliver superior free cash flow.  
3. Creating value from the core of a business needs to be high on the investors’ agenda.  The challenge is whether “business led value creation” is achievable in the current economic and financially uncertain environment, and if it is, then how to focus the executive management team to deliver against the potential.

Our findings are taken from an article written by Toby Tarczy and Gerald Hogg, “Challenges Facing Private Equity Backed Investments”

Why is there a preoccupation on the sector focus for selection of interim managers?

 - An IIM consensus on the sector misnomer is being reached – it makes no rational sense, although in times on unceratinty we are driven back to the familiar solutions for comfort. But there are some aspects I suggest we as interims become aware of..

1. Recognising the scenario and adjusting the approach e.g.
   1. turnaround or
   2. realignment
   3. checking the brief – there is actually some change to do (vs. gap / more of the same management)
      1. What do they wish to different?

                                                               i.      (is there any change aspect to the role that defines the end point – i.e. is it an interim or temporary gap role)

1. What does that look like?

                                                               i.      checks values (not what are the issues – goes nowhere)

1. Will they give us the space brief to do so?

                                                               i.      Micro management we find is a killer of an interim assignments success

1. And reading the culture.
   1. What makes the business successful?
   2. How does it work?
   3. What are the organisation values?
   4. How are decisions made?
   5. What does success look like?
   6. Etc.
   7. CPD – there are aspects of CPD (a focus of the icebreaker team) about that supports interims in reading these situations better – which is more about “us changing” rather ”than them” – so independent of scenario anyway.
   8. Technically the way our brains work means that if a scenario is familiar we will not think – our subconscious processes it automatically – so out of sector input is vital to effect the difference
      1. Infantile public sector risk adverse procurement processes – actually therefore deliver quite the opposite – embed and accept the existing risks in the current scenario.
      2. We have found the same issues and inefficiency in banks in 2006 – and look what happened!

These can apply equally in the public or private sector. And you can find pockets of both traits.

Variety of experience is what enables the interim to develop their capability, and engage and be useful within days because we have seen so many different scenarios. But hey it is never easy and we rarely get it right first time.

Icebreaker change management CPD (is not really fluffy) …Some executive coaching tools are very effective and bring the icebreaker team 3 differentiating strengths:

 Make organisations better places to work (some of our corporate clients like this)

1. Attain more from less
2. Change management
3. Embed a legacy post
4. Support failed management vs. fire them

Engagement in a turnaround (absolutely essential to close business in distressed denial circumstances – persuasion not enough and its not selling)

1. Need a different skill set
2. Provoking the debate “icebreaker a interim team solution for c21″ this is the ppt I did at TEN

                                                              i.      Entrepreneurs & interim Whitehall 09

Business development – motivation tool (Telco and major UK retailer like this)

1. Main driver of customer satisfaction
2. Some people like coaching as a tool in its own right (I dont  - but it has become widely accepted)

Team based delivery

The core Icebreaker proposition is this. When an Icebreaker client engages us we offer, in addition to implementation expertise, as a minimum a team based approach to every project. This involves

1. Peer review, access to other specialists, CPD and QA using Icebreaker templates and processes (way of working, reporting and administration). This peer review can be
   1. as a minimum informal non charged dialogue – for a narrower project or
   2. Budgeted broad team input – where it is clear the client requirements warrant a broader input. This is charged for in a client proposal, and agreed up front.
   3. The ideal business scenario
      1. Our “sweet spot” is clients with multidimensional issues (because resourcing is likely to involve more than one team member)
      2. BUT the Icebreaker core proposition still holds water below or above this level of turnover and complexity because the client benefits from the team-based approach to projects as this applies even where only a single member is charged to the client.

 Retaining value and a consistent message for our clients:

As a team, we have spent considerable time building the most effective team from the best tier 1 interims. In the process of business development we have invested significant effort nurturing national relationships with organisations that will use Icebreaker as the first port of call not just for interim management projects but also for wider solutions to their client business challenges including, but not limited to, turnaround situations.

 On each and every occasion the wider team proposition has been key to our offering and our success with these organisations. It is imperative that, with Icebreaker’s centrally developed relationships where the icebreaker team has collaborated in b the business development effort our message is consistent. This remains true even for project opportunities that will not involve multiple Icebreaker Members delivering to a particular client.

 Branding and delivery

In other words all project referred by these organisations or icebreaker supported or initiated team efforts, no matter how small, need to be carried out under Icebreaker branding with the team proposition being core to the sales message and administered via Icebreaker. This preserves the consistent brand message with these organisations we have all been trying so hard to develop and retain the value for the mutual benefit of all our team Members.

Build value in tough times!

It is always our preference to keep our trusted contacts informed – rather than sell. BUT it has also become clear that we have not updated our allies with our emerging offer to meet challenge of 2010! With BA, Royal Mail disputes, along with the absurd threat of public sector strike action due to proposed cuts their redundancy pay averaging c£250k! It has never been more important to achieve the paradox – build rather than destroy value during change. Whilst tough calls set change boundaries a program should be a vast motivating opportunity to build value – difference vs. conflict – is in how you do it.

The business environment

There are some good companies amongst the 85% of companies requiring an IP (Times quote A. Sugar). These crises arise as a consequence of management skills gaps; requiring external investment, supported by interim management & external sources of funding to create and deliver the plan (we have become ideal vehicle for this!)

Cash crises are arising due to inflexible extended supply chains & fallen revenues. There is a strong future for strong regional manufacturing, better designed supply chains, and growing revenue into parallel sectors

10 years ahead of plan – The Chinese are coming – major corporates still lack and squander diversity. This limits agility and global growth; made worse by monolithic structures, change programs that destroy value.

Public sector – in denial and completely broken – as there is no appetite to address the issues, we see the public sector as a waste of time getting involved, or the ultimate executive coaching challenge – UK plc!

Banks are acting erratically – (in fairness to date! there has been no solution to handle / depart troubled investments)

The icebreaker offer & (reality)

Bank offer – initial documented review of issues and solution, IBR light, DD, bank departure options, implementation (we find from many sources – whilst there are some hero’s – very few banks in fact have the courage or knowledge to act)

VC offer – telephone review, issues and outcome, investor exit plan, detailed joint DD, implementation and NED support (huge choice of investments – proposition has to be good, VCs often have a restricted view of resourcing their investments)

Corporate offer – initial documented review; change management support e.g. covering; supply chain and or commercial model, additional funding options, outcome, business model challenge, management capability review, interim management support. (The focus on a stereotypical square pegs fit with square holes fit squanders the opportunity)

Management and team capability development – initial documented review, executive coaching / change management course developing a team & leaving a legacy (we expect to run this course for another corporate client in May)

Icebreaker accredited business support;

Interim management; accredited interim manager, peer reviewed, team based (we are growing to a team of 30)

Building value during a change program “2 day icebreaker course developed with a leading business school & CEO GB”

Icebreaker accredited CEO & NED support – (we have a pool of accredited 10 proven entrepreneurial CEOs)

Interim FD and FC support – through Mazars and our collaborative partners

Business growth based on facts; parallel growth opportunities, business model benchmarking – market hard facts SMT

Financial restructuring & supplying professional directors to manage solvent liquidations and CVAs – Bridge, PDT

VC Investment turnaround / growth – via selected VCs / Mazars

As we are committed to the same aim - we’ve lowered the bar – the items in italics we are willing to put of our fees at risk. All of our programs are signed off by management and key stakeholders, typically at a fixed cost and fixed targets as we’ve done it before. Our main recent successes have been delivered by getting diverse professionals working together and a couple of weeks ago I am pleased to say we put of first backed offer to turnaround a business with one of our chosen VCs.

Thank you. I welcome your thoughts.

Tom Pickering CEO,            E: office@icebreakerexecutive.com                                 T: 0207 193 5518               .

The challenges of globalisation
All advantage is temporary. The ultimate advantage is achieved by choosing high value competencies well and establishing how long to invest in them, and identifying commodity competencies to divest. The faster the product life cycle the shorter the advantage. In 1888 Kodak created the slogan “you press the button we do the rest” and from this a highly vertically integrated model was created maintaining an almost Neolithic control of the photographic market. This was achieved until digital technology arrived. It is essential that an organisation becomes flexible enough to jump when required.

There is no competence more critical to a business than the development of an end to end competency chain from the consumer to the raw material supply. There is no one make or buy strategy that will stand the test of time. It is by defining the long term distinctive specialisation of the organisation, and the organisations position in a network of complimentary specialist diversified suppliers that an organisation will achieve a competitive position. Diversified suppliers bring a wealth of experience from other customers; they provide an early warning platform and the ability to easily modify their existing loosely coupled customer business processes.

Captive suppliers often have hard wired business processes making innovation more difficult. The speed of learning is then the key source of advantage, and the loose coupling provides the supplier the space to innovate to deliver clearly set performance targets. Further more; the scale enjoyed by many diversified suppliers enables them to provide attractive career paths to retain highly skilled employees. When looking at the business as a whole, the decision is how much of the past should be taken forwards and how much should be reviewed.

some shortcomings – of “Square pegs in square holes resourcing” 

1. Missing out on fresh thinking and other industry innovations.
2. Lost opportunities, evolution rather than revolution
3. Cloning specifics rather than looking for differentiation
4. CV keyword matching without reference to delivery achievements

quote ends.. – Diane McWade

These are the skills and provenance of a professional interim manager that enables them to de risk and deliver considerably more value in a CHANGE ENVIRONMENT? Gap management suits this “exact fit model” and if it’s cheap may be ideal solution.

The difficulty technically here is the people side in the adversity of the current climate. Decisions are made around certainty, and even if its a WRONG decision – people get their certainty and comfort through ticking the boxes, and prefer to go with a solution they therefore can digest more easily even if its flawed. Like a bank doing a IBA – pre insolvency, that sits on a desk, costs £40k and collects dust. Providers too mitigate the risk of delivery by searching for the exact fit, as contractually they take no responsibility, save their reputation for delivery.

It’s easy just to say yes, and just give the client what they ask for. I met one of our clients last week major plc and he said why can you guys make a difference when we have used interims for 6 years and it has not worked? As long as the interim is “trading down their experience “it is often about having the experience and courage to challenge the clients thinking to try and deliver a more successful outcome (or would they not have done it themselves?).

The lack of certainty in the current climate will make this “certainty buying behaviour” even more extreme, and is likely to push out the high value added professional interim solution. I would add someone that has come from the industry with an exact fit – will not challenge the norms of the industry. Its the way we are and our subconscious reacting automatically to the familiar – like driving a car and wondering if you looked at the last roundabout or in my case – if wondering if there was a police car on the roundabout!

The other aspect that can be missed is the reading circumstances i.e. is it a turnaround, realignment, what’s the culture like, what’s the willingness and urgency to change etc. That is where interim assignments come unstsuck PS I do think providers do provide a good resourcing solution in a particular set of circumstances!

We find there are 2 aspects, the capability to hit the ground running, and the capability to deliver value.

Any more thoughts…?

We constantly hear from our clients that the big challenges facing business management teams in 2010 are; decreased sales, cash flow problems, reduced access to capital and credit, budget cuts, strategic initiative freezes, declining confidence, resistance to change, lack of skilled people and attracting the right talent. In actuality these are external factors.  Management is not powerless in the face of these factors; innovation can still influence and change the business landscape. What is certain is that inaction, delay and business as usual thinking carries a heavy price.

Alan Sugar opined that 85% of businesses requesting funding actually need an administrator. We hear too many examples of management continuing to present un-investible plans to banks and capitalists demonstrating no clear return or exit for an investor. A significant proportion of these businesses are potentially investible and attractive to new investors, but only with the right business model and support to achieve it.

In 2010 (or any other year) it’s very tough for management to find the courage to admit they need help. What is even tougher is to identify and engage the right type of support.  Recessions have a way of weeding out stale, ineffective business models and even the most capable management teams can be left marooned as control of the business is gradually eroded in favour of the major creditors.

A Real Example: Our corporate finance partners recently introduced us to a business that was running at 80% of historic revenues; leading inevitably to slightly misguided pressure from its bankers. The management’s re-financing strategy was an offer to investors involved a negative cash flow projection to be offset by optimistic revenues. The investor offer was £1m for a 25% equity stake – this was not going to fly! We applied our best people and in only 2 days collaboration with the client we underwrote a plan with management to achieve £2.7m cash return in 12m on a £700k net purchase with ABL, to enable the bank to withdraw and still achieve a very attractive exit for the new investor. This is what the incumbent MD said:

“I first met with Icebreaker on 28 August 2009, when our ability to trade through the next 6 months looked bleak. Over the last few months we have had a very constructive dialogue with icebreaker and I have been very impressed with the quality and focus of the team. They developed a proposal to re-engineer our business model and commercial proposition to deliver an attractive investor proposition and exit. At that time we were facing significant pressure from our bankers and the board therefore deferred engaging with Icebreaker whilst we sought investment capital.

 In hindsight, given their access to VCs and seasoned turnaround skills I wish now that we had gone ahead and engaged Icebreaker to support our funding requirements at that time. With their support we could have delivered the turnaround plan to enable an investor exit within 12m. I am convinced that, had we engaged with Icebreaker earlier we would have succeeded in securing the necessary investment. With their support the incumbent management could have retained control of the business, aligned and managed stakeholder expectations and delivered shareholder value through this difficult time.”

Good news: We find that whilst it’s difficult to engage with outsiders in a crisis, IF management and business owners DO ACT by getting the right support in a timely way they CAN retain CONTROL. But if they fall into denial they rapidly pick up speed down the slippery slope to insolvency.

The 2010 paradigm…  The longer the delay the more expensive and difficult is the recovery. Many good businesses requiring turnaround also require funding. Icebreaker pulls these elements together to make it happen. We have just successfully launched our service into mainstream banking to evaluate and turnaround their positions. What’s different is that we can identify the deliverable plan, impartially resource, implement the change and build the business back to recover value.

Our engagements are devised so that our targets and goals are fully aligned with the immediate requirements of our clients; we share the risks and we both benefit from the rewards of a successful turnaround.

Tom Pickering,                                    E: office@icebreakerexecutive.com T: 0207 193 5518.

We are Icebreaker

We are a unique network of interim executives. We offer a different, team based proposition to businesses for optimisation, exit planning and turnaround management.

Our turnaround programs are always rooted in hard facts and are firmly based on many years’ implementation experience. Every program clearly identifies those icebreaker team members accountable for both lead and support and are agreed with and signed off by management.We believe in assigning only tier 1 interim management talent and maintaining that talent through cutting edge CPD

We have access to wider expertise through our collaborative partner network including SMT Consulting (specialists in confidential market research), Bridge Business Recovery (IP specialists), PDT Solicitors (ABL specialist lawyers), Equity FD, Now financial partners, Mazars Corporate Finance and selected Venture Capital and selected Private Equity houses.

We actively seek out struggling businesses in Bank portfolios.  We then work with you to identify and define options to turn those selected targets into successful, profitable and growth oriented businesses, whether by actively looking for exit options or by strengthening the bottom line within existing finance arrangements.

Engaging with Icebreaker

Once engaged we will:

• Work with you to review your portfolio and identify qualifying targets (usually, though not exclusively, at least £5M turnover);
• Arrange one day on client site to gather information from senior management (free of charge); and,
• Report back to you on whether the candidate business meets our criteria (can it be turned round or is it inevitaby on the curve to insolvency). Icebreaker will never recommend engaging unless we are sure that we can make a difference; we will typically target a minimum result of 10X ROI on our agreed fee structure.

Icebreaker Reporting

With your introduction , we then engage with the Client on a fixed fee basis (between £15K and £30K is average) after which we undertake a detailed due diligence exercise to validate our original estimates. Our businesss due diligence is supported by FD level resource sourced either from our collaborative equity partners or from our selected pool sourced from our collaborative FD specialist provider, Equity FD.

We will produce a written report setting out our turnaround plan. This plan will set out quantitative KPIs and milestones against which we will measure our success.  Typically, we will offer up to 50% of our fees at risk against meeting the milestones.  We ask the client to pay 50% of our agreed fee during the engagement period, the balance will be due only when we demonstrate to you (or a VC if that is the exit route) that we have exceeded our KPI targets.

What’s Different?

We never engage on a “singleton interim” basis. All our projects include time for peer review and QA.  We look deeper than financial information and business forecasts, we will investigate in depth:

• What is the strategy; is it flawed? What are the weaknesses; are stakeholders expectations being managed?
• Management and key people competencies: can current management deliver their plan or do they need help?
• Revenue forecasts: are they based on hard facts or just wishful thinking?
• Sales proposition: does it deliver only what customers need and no more?
• Supply chain: is it efficient or wasteful (best price sourcing does not lead automatically to lowest cost supply chain)?
• Distribution to end customers: are distribution margins right; what are the alternatives?

Summary Benefits

Reduce portfolio risk

By engaging with Icebreaker you are provided with a proven team of expert interim managers with the capability to bring innovation, quality assured best practice and a fresh perspective. Icebreaker’s change management philosophy is to embed skills in the client’s team and leave an enduring legacy that reduces portfolio risk.

Increase portfolio returns

By engaging  a higly experienced team with robust track records in making change happen, boosting sales and margins, reducing costs, overcoming major challenges and delivering bottom line results across a broad spectrum of business sectors, greater returns are realized in your portfolio. And providing options to maximise cash and subsequent cash returns.

Guaranteed Results

We work on a fixed price basis for the assignment and  where appropriate put a significant element of fees at risk against our performance (up to 50%).  We may be able to identify additional upfront cost savings after our initial due dilligence of the candidate business by proposing an additional incentive based remuneration program commensurate with the company’s turnaround performance. In every instance we want to ensure that our interests are aligned with yours and the Client’s.

“Few great men would have got past personnel.”
Are we as interims in danger of this as companies are “interviewing” rather than engaging with us? Martin Dorchester

Interim management is a strategic decision to which HR departments in the main add little value. HR departments are forced down the “standard box ticking scenario” as that is the only means of processing and evaluating the responses.

Of course HR departments should be the core of managing the organisations human capital; what amazes me are those organisations that outsource their recruitment!

There are of course very good HR directors, although in the main preoccupied like procurement departments with transactional activity which often includes recruitment.

Unless the lateral aspects are managed very intelligently, this creates a false roadblock. This false roadblock is a non value add stage that should be cut out of the recruitment process of interims. That misses the intangible value of lateral sources of value – the core value as you suggested earlier.  By cutting out the HR stage entirely the recruiting exec can use their own judgement, which is network link, can they do the job (case studies), & can I work with them? (Because the interim – CEO relationship tends to need to be very strong)

In my view the buyer and recruitment process manager of interim management should in fact be the CEO who does not use tick boxes and understands intuitively who can make things happen and who is best. The HR step tends therefore to be another unnecessary hurdle that is created by large organisations.

The very process of writing an advert is therefore squandering the lateral value and limiting the solution.

You can see the dramatic failure of the public sector forced into standardising process driven systems, and the consequent failure of some many of their procurement programs. What is worse it is so prevalent when they source interims into the public sector, engraining more of the same.

This is a challenge to overcome is considerable. For example  “the standard interim provider world” is preoccupied with the executive sourcing model. This is in a vain attempt in order to meet the clients requirements by ticking the client’s boxes. In reality they should offer a far more strategic service and challenge, in order to deliver a whole load more value, rather than as Anne and Bradley suggest fall into the same process driven trap. BTW – There are some very good interim providers : ).

So i’d suggest in order to deliver the best value interims need to focus on finding “the organ grinders”.

As a check looking back whenever I hired a senior manager in a corporate role, I have stayed very close to HR identify those candidates that would bring and edge something new, to take the business to the next stage rather than more of the same. There is also a case for rigorously road testing a candidate’s capability too, much of which is pretty obvious from what they have achieved.

Age whilst illegal when considered as part of a recruitment process is a misnomer too; there are sub aspects as a “consequence of age” that are more useful to consider such as;

Experience
Variety of experience
Motivation
Stage of career
Level of distress of role
Etc

Age is a misnomer. Whilst its an indicator of how long you have been alive it does not shed much light on the above aspects.

If an older person makes a career decision it tends to be better informed as they naturally know themselves better and be more aware of what roles and how they meet or not their requirements. Also later in career people tend to wish to give back which for example makes better interim material. When one is younger you are on the make and often agressively proving oneself (we’ve all been young!). There are too some very agressive still looking to prove themselves at 65!

Regardless of seniority is age an indicator of experience? If someone has been employed for 30 years how many times have they replicated the same day twice?

Age does have some positive and negitive aspects although clearly fitness and mental agility naturally decline as you get older. I have rejected some older people as they simply are not strong or mentally agile enough.

So if the process is fair transparent and inclusive and there is a code to follow then the decision SHOULD be good.

BUT!

Objective is a tricky expectation as we are human and we are full of aspects that make it very dificult to make non prejudicial decisions.

Most decision making in recruitment will be primevally based upon are they like me?

So probably the only certainty is if the interviewer is the same age you have a better chance of getting the job.

“Delivering Results – Transferring Skills & Leaving Legacies”

2009… indecision? The roundabout has now stopped in an unfamiliar place. Unfamiliarity makes decision making difficult as it’s hard to make decisions without a reference. Lending to corporates against p&l is rare & expensive. Asset Based Lending is replacing leveraged deals in the lower risk corporate space. ABL is becoming polarised around low and high risk clients.

The good news… 82% of FTSE 100 comes from outside the UK. Dec 08 – 09 saw a 22% increase in the FTSE 100 correlating with the shortfall in value of sterling. While Zombie company balance sheets may be technically insolvent; whilst the client is servicing the debt, banks are not acting or taking provisions & CVAs are becoming the norm.

BUT… Quantative easing has stopped & the c£25Bn HMRC loan to UK plc is being clawed back. The UK Government bought 30% of UK shoes & laptops last year; so cuts in public spending will have a direct impact on the private sector. Company valuations are still not holding up, so exits are an unattractive option. For those businesses requesting funds we continue to find Alan Sugar’s recent pithy synopsis accurate – 85% of businesses requesting bank’s cash in fact require an administrator – i.e. only 15% have a justifiable business case. Under the facade many businesses have the wrong capital structure, business models are flawed, & sources of revenues threatened.

Philip Long of PKF last week said “whilst the meek shall inherit the earth the young shall inherit the national debt”.

2010… Brian Green President of TMA UK & formerly of Gordon Brothers said “There will be great opportunities for those with imaginative solutions”. Jamie Constable says “distressed businesses are the hardest job to solve”, & Bob Crow the futurist RMT leader foresees “2010 as a year of action”! We hope he is right. Change from within & early action is our prescription. Early action is a much cheaper route for a business owner to retain control before the business irreversibly slides down the “curve of death”. MDs require real insight & courage to admit to these problems & integrity to ask for help & act. There too are those heroic MDs that squander returns by bearing too much load & always know better! Even with early action we still find that the solution requires very careful, swift action on all fronts to manage stakeholder’s expectations through a formal / informal turnaround process & out the other side.

Growth… is there. We have just put a proposal to a subcontract automotive technology client to incrementally grow into a military market from the same cost base. We have the knowledge from within our network to detail the MOD strategy & boxes to tick to get this right first time by taking a fresh look & leveraging our team’s combined experience (over 400 Plcs) through the single icebreaker – client contact. We have created a “let’s get started” package which includes a half day diagnostic with our Collaborative Partner, SMT to rapidly identify  sources of incremental revenue.  

Can you make money with 60% of current revenue? Moves to outsource have destroyed value; characterised by increasing costs, poor service & quality issues. Putting Bob Crow’s wisdom aside; the way we work together in Europe is very effective at converting knowledge into real value. Emerging economy labour rates may be a fraction of European rates BUT it often takes many more of their people to do the same tasks. Traditional corporates are being dismantled by disruptive technology. There is a free pot of additional value & cash where businesses interface with vendors. Core capabilities take decades to replicate, they provide long term advantage & are being squandered.

Is your cash working for you? We have recently delivered 2 projects delivering greater than £2m reductions in working capital, with huge knock on improvements in profit by getting the supply chain and vendor agreements right.

Whilst we receive a steady stream of opportunities from our trusted partners, we are not complacent. Where there is an opportunity to achieve a 10x cash ROI, our challenge is simply to find a seamless, self funding way to get started.

Tom Pickering’

CEO Icebreaker Executive Interim Management Limited E: office@icebreakerexecutive.com T: 0207 193 5518.

Interims managers are different, are not obvious, driven by emotional inteligence. I argue that these are the the client differentiators of their experience of an interim assignment, technical, management skills simply have to be excellent and taken as read. That said when you dont know a professional should ask! – so we dont have to know everything? and organisations have plenty of untapped resources for the interim to leverage.

This is the link with differentiators

There is alot of “ego centricity” in interim management, alot of passion BUT not a whole lot of factual research, nor is it a subject at UK business schools yet, so there is a whole lot of passionate subjective ranting (including me)!. To add some objectivity and background – Below is some research and thinking from Holland (who have a more mature market than the UK, and input from a Dutch Universities Jaap Schnevelin 2009 that research IM; see links below )

Lily v b Broekes view:

Towards a new way of managing people and organisations as a perspective shift from self-driven to environment-driven where ego is part of the environment. In the future there will not be 1 Leonardo da Vinci but together we will be Leonardo da Vinci

 A definition of an interim manager (Dr. Martin Dorchester)

 A highly experienced senior executive hired on a short-term basis of typically 3-9 months.  Has completed a minimum of 3 assignments

 Martins update on emotional intelligence and interims.. Martin Dorchester 2009

“Emotional intelligence, or EI is the ability to understand your own emotions and those of people around you. The concept of emotional intelligence, developed by Daniel Goleman, means you have a self-awareness that enables you to recognise feelings and helps you manage your emotions.”

“So, for us, emotional intelligence is not a synonym for personality; it is about how we manage our personality.”

“Forget IQ. Brains may come in useful, as may social class and luck, but as a predictor of who will succeed in any area of life, EQ is the thing to worry about”

“It is with the heart that one sees rightly: what is essential is invisible to the eye”

The elements of EI are (Daniel Goleman)

:

1. Self-Awareness
2. Self-Regulation
3. Motivation
4. Empathy
5. Social Skills

Martin Dorchester Research shows charachteristics of his snapshot sucessful interims from around the world

1. Self-motivation:
   1. Feelings/gut instinct
   2. 20.8%
2. Self-regulation:
   1. Responsibility/religion/spiritualism/positivity
   2. 41.7%
3. Motivation:
   1. Values, goal driven, end results
   2. 8.3%
4. Empathy:
   1. Visual. Voice change, in their shoes
   2. 8.3%
5. Social skills:
   1. Interaction, rapport, mimic
   2. 20.8%
      1. Average IQ score 104
      2. Highest 121Lowest 99

Martins summary concludes:

Successful interims can be identified by:

n  Not concerned with personal status

n  Trustworthiness

n  Courage and resolution

The link with QA here is that the decision making process is very intuitive (or based uopn gut instinct), an ability developed through the drivers of who we are, this is what enables us to be effective. There are dangers with this too as it can be become distorted (we are flawed), Entrepreneurs & interim Whitehall 09

Lily v b Broeke goes on:

Decisiveness

1. Interims become different types of  “leaders”
2. Interims/Providers require training in non-technical areas:

• Importance of CPD

It is about people, relationships and methods of engagement

1. Those with low levels of EI prone to counterproductive behaviour
2. Successful interims are found to possess high levels of emotional intelligence

n  Anticipate, cope with, and manage change

1. 70% of the climate is driven by the interim
2. Vision : have a dream and make peoples dream alive
3. Personal maturity : in balance with yourself and knowing yourself
4. Connecting: support strongly and counterpoise strongly
5. Authentic (gives you freedom)
6. Modest (its the team, not just you)
7. Show your emotions

Icebreaker Summary

Forim Conference 09

Research into Interim Management

Lily v d Broek 2009

How does Lily thik we will get there?

1. Clarity in definition IM
2. Education, coaching and accreditation
3. Create learning communities
4. Selection: survival of the species (lt) and not survival of the fittest
5. Self reflection and mirroring
6. Proactive and courageous (no guts no glory), trial and error

Homogeneous versus hetrogeneous: Dangerous ground?

Over the past few years I have noticed a growing trend towards homogenising interim managers via skills analysis, accreditation, profiling etc and have a concern that the very thing that sets us apart from consultants and permanent employees is the very thing that we may well eradicate from our cv’s. Over 10 years as an interim has allowed me to work in industries and roles that my profile doesn’t fit. If I was tested or accredited I would bever have been selected for those roles, yet I did them and completed them successfully. One of our key attributes is that we deliver, I am not sure how we “profile” that. When Nick Faldo profiled his swing he stopped winning tournaments, when Johnny Wilkinson thinks about his kick he often misses. So are we in danger of trying to remove what makes us different and good to fit a profile? Rather than look at profiling and accrediting interims wouldn’t we be better served profiling our industry? Rather than seeking accreditation and being “profiled” to sector or role would we not be better served by being different and special?

What do you think?

…

Complicated question – We find interims as a % of the population we are very much in the minority. This is substantiated with the tiny market segment we fill, and the difficulties given the lack of critical mass in trying to standardise the solution.

To standardise the solution I agree is to squander the value, because resourcing where there is underlying capability to do the role (emotional intelligence and technical ability, breadth, enough provenance), is better vs. the executive sourcing model which is very much more industry and sector specific.

Where there is substantial sector specific fit allot of what we do is unconscious based on our previous experience because that’s the way our brains work. Where the value is we find – is taking very capable people and getting them out of the comfort zone, cos that is where the real thinking and innovation takes place. What value comes without new thinking?

That is a disingenuous vs. a traditional solution because a client expects you to tell them what to do because you’ll have done it before, although again legacy after an interim has “defined the boundaries” is around creating an environment where clients figure out and detail the solution themselves. This too can be an uncomfortable process

Clients to buy from those like themselves and there are not many CEOs with the same sorts of profiles as us, or they would be very bored.

So I agree the value is in diversity and unfamiliarity, and the challenge remains as there is no clear “standard solution to compare against” how do you validate and accredit an interim? QC is always about comparing against a standard.

What is common is some of the values that interims share, although again there are many different equally valid horses for courses and subsets of the population and part of a broader solution.

If you profiled our industry, (by which I guess you mean clients) I think you would find again that we would not ideally fit. It is only when a specific set of circumstances arise that it is possible for a client to decide what’s right. That client decision is more based on a chain of trust, and has little relevance to external accreditation.

There are cultural issues with this too around the UK trend to standardise behaviour, which id argue shows a complete lack of trust which has completely the opposite effect.

As a hypothesis – client trust and personal security in letting go has allot to do with the success of an interim project, so there may be merit in profiling the client and interim characteristics of the most successful and not so successful projects?

I am always amazed that with the shorter and shorter tenure of CEOs and broader the trend of senior management to more contractual style of working, that business schools do not study the subject of interim management more closely. Where there does seem to be convergence of thinking is around the emotional intelligence aspects, psychology of the interim and their engagement, which again is often very disingenuous with most management theory.

Bring on the debate…

Twitter is a very powerful tool, for keeping yourself informed, and testing new ideas, and taking a global live view of what others are doing too.

Networking is as much about deselecting as much as selecting who one chooses to network with. It’s possible through dialogue to establish a degree of fit, which leads to a call, and who knows what’s next they are on your linked in group! I for one always make sure I know and trust who is on my linked in group although many seem to be collecting buddies cannon fodder like an “interims providers data base ”. I guess that’s down to the personal way people use LinkedIn.

Linked in is used although vastly underused until these forums emerged. That said I am baffled as to what types contribute to forums, and would like to hear more from the “quieter members of the population” so as to take a more balanced view.

I think it’s primarily social as the for example the twitter process is 1. Know me, 2. Like me, 3. Follow me. Then you get the opportunity to inform thinking having established dialogue and some sort of relationship. Those that sell first always seem too visibly “crash and burn”.

In terms of cost it also means that you don’t have to jump in the car so often to kiss frogs, because you should be a few steps ahead already.

Key players in organisations interestingly can be accessed as a result directly rather than through gate keepers and marketing departments are becoming dismantled from departments providing direct access to their people.

This disruptive technology is providing the means of supporting distributed working, and supporting interims networking and business development efforts generally.

In terms of time, the 24 hrs / day nature of “social networking” is very bad for time management although something I find quite useful and live to keep you up to speed whilst travelling on the train. E.g. Twitter is like carving up a newspaper into the bits you wish to read.

For lateral thinkers, and those looking to refine their own thinking, and or develop a position of though leadership – a necessary evil id say.

Icebreaker does engage in turnaround interim scenarios. The reason for the “road block in the demand” we find is 2 fold like this

“The rational side”.

1. Banks hold the control – debentures etc, veto on appointing administrators etc
   1. They are sitting on zombie companies without acting
   2. They are acting inconsistently

                                                               i.      Pulling funds on businesses with no exposure

                                                             ii.      Pulling funds on businesses within their agreed limits

1. They use the traditional IBR – which is no more than a snapshot and provides no indication of a solution
2. No one is lending against P and L, only assets
3. ABL is becoming the new norm for corporates so there is a huge choice
4. Most businesses are going straight into administration
5. Businesses that get into trouble on the curve of death have gone too far too turnaround from existing financial resources “Alan Sugar sugar rightly says they therefore require a IP not more funding”
6. There is no effective standard consulting or interim management solution that can deliver fast enough to stem the flow of cash
7. You need to hook up with VCs / CFs cos you end up buying businesses from owners, we know about 150 VCs / IPs etc
8. The owners are in control for as long as they can pre administration and its difficult for them to admit there is a problem
9. Most owners don’t know the legality of the issues they face / how to act
10. There’s no means of identifying
11. IPs will take their fees without considering too broadly more complex ongoing solutions, leaving businesses unchanged post turnaround – just with more debt – Woolworths
12. The issues are very complex and require a very effective team. And I mean a team not a group of individuals with an extended team of advisors
13. You need inspired eyes and ears looking out with the right sets of eyes and ears to feed you work
14. The best people in banks seem tied with bureaucracy e.g. recognising that a bit more cash to support a solution may work

“The people side (the less rational side)”

1. The levels of market uncertainty are staggering; people don’t make decisions without a level of certainty
2. Rational argument don’t work – you need executive coaching skills to unravel distorted thinking that takes place when people become very entrenched and stressed in survival mode
3. You have to get the manager to realise there is a problem cos telling them don’t work
4. You need to act decisively early and have the mandate to do so
5. Most of the problems that are occurring are not business as usual – we find they are sliding into an abyss
6. There are confusing messages been sent out on the reality, personally I have been of the view since early 80s that manufacturing has a far greater role to play in the long term solution for the UK and the sort or generalisations on what we should make / buy around technology is flawed.

That’s why icebreaker works as a team in the way we do and take these aspects so seriously. Having done this we have also realised that a team based interim approach is a whole lot better for standard interim work.

What’s pleasing is that the banks and others are waking up, and acting, BUT in the process many GOOD underlying businesses in the meantime will go bust.

On the last point – Beer and Partners I was an interim / potential investor on their pool, and found that there was again a reluctance to manage investments. The expectation has been for too long is that you do due diligence and it just happens, and you win some and lose some. I have never been willing to invest on that basis without taking a view of the viability and as required inputting into decision making.

What’s worrying is like any crisis people get drawn into areas that undermines their real responsibility, which sends organisations into freefall. What is missing though is the very specialised hit squads to resolve the complex matters that SMEs face, with those that are very skilled interim managers comfortable at operating at all levels don’t mind getting their hands dirty, and motivated dispassionately by making a real difference.

Note of caution it requires significant courage and carries significant professional risks; and no easy option to manage a program!

This was our summary of 2009 / 10 http://news.icebreakerexecutive.com/?p=278

I hope this helps fuel some other thoughts and prompt some others’ to share their experience.

It is near impossible to standardize the content of a QA process for interim management, because that depends on the job to be done, e.g. the terms of engagement in an insolvent business are quite different to a business that is solvent. More ensuring they exist maybe with a checklist of sub points. For example – it is amazing how many interims operate without proper or suitable terms (maybe having been bullied by a corporate client?) e.g. inadvertently and unwittingly invalidating the terms of their insurance to support the “work in hand”.

If there is one aspect that could be standardized it is more of a completeness checklist to capture the key terms of delivery for example

1. client tcs and cs,
2. insurance,
3. terms of reference,
4. review process,
5. solvency checks – ignorance is no excuse (Alan sugar recently found 85% of businesses requesting cash required an IP, rather than funding – this is what we find too)

Turnaround specific aspects

An important factor is also not setting out what you are not qualified to do, e.g. turnaround checklist

1. steering clear of IP related advice unless you are an IP
2. shadow director issues,
3. illegal trading,
4. companies act 2006 changes
5. insolvency act 1986

As a working example – Icebreaker have our own

1. in house legal counsel to support us,
2. a working audit checkist we use as a team; which we continually refine,
3. along with our terms, that we adjust and refine to suit what we learn
4. review processes,
5. and formal support from our funding and our IP partners.

This is driven by experience of turnaround – cos the most complicated challenges that require the most lateral thinking, and correct action – are turnaround.

The IIM or the IMA-1 would be reluctant to create this content, cos they could be held to account and sued / simply have not got the courage to do so anyway, nor as i suggest before is it possible to create standard content.

Enjoy the snow

Accrediting interims through QA and QC processes implies a comparing a “standard product” with common standards

The issue here is that as an interim community we are all very different horses for courses, and rightly so – one size does not fit all client requirements…

-          Professionalism also implies a drive to improve rather than fit with a standard

-          The industry will never be driven

-          The icebreaker team are tested on their natural fit with interim management, many will never survive because of the way they are, and that’s OK, and the underlying capability, how they achieved what they did, rather than the outcome

-          Case studies imply the past is an indicator of the future – not sure it is

-          We use case studies for clients to set out what we are like to work with and what we achieved

-          We check 3 lead indicators of success with clients; do they want to do something different? What does that look like? Will they give us the space to do it?

-          If there is one aspect that could be standardised in my view – infra structure should be in place client tcs and cs, insurance, terms of reference, review process, solvency checks increasingly important

-          An important factor is also not  setting out what you are not qualified to do, e.g. in a turnaround shadow director issues, illegal trading, companies act 2006 changes and insolvency act 1986

-          When you look at a professional interims experience it is usually is overwhelmingly convincing, what really matters, is what have you and done and more importantly what are you like to work with

-          We focus on the latter, and all of our team go through CPD to improve the effectiveness of the way we work with clients – cos thats a differentiator

By the way a very happy NY

P.S.– however good we are – I think it is going to be a tough one

icebreaker executive; interim management as an investment

We believe very strongly that successful business is all about change. These skills don’t just happen by chance. The oversight needed with any change and implementation management is the building of a legacy. Words used to describe change management are often “stressful”, “confrontational”, “high risk” etc.  We at icebreaker recognise the difference between a profit improvement and an investment, which is the retained value, or legacy left behind after the interim has departed.

2009/10 recession what is different? In the 1980s The JIT analogy was to reduce the water level (inventory) in the pond (business), so that the rocks (inefficiencies) emerged.  2009 is characterised by reducing revenues and increasing costs. Restricted working capital is exposing UK plc to some real threats that have remained submerged during the recent years of complacency. The situation is, however, now critical due to the immediate shortage of liquidity & the erosion of business cases.

We find common ground with Alan Sugar’s recent pithy synopsis that 85% of businesses requesting cash from banks in fact require an administrator –leaving 15% with a justifiable business case worth funding. The road block in UK plc business is not cash but an effective, courageous, specialist, support team with the professionalism to act in the right way.

the icebreaker team approach; Just like in Accident and Emergency, an X-functional team approach is essential to affect the speed of delivery, diagnose the problem, calm the patient, and stem the flow of blood to prevent the patient dying whilst in parallel arranging the anaesthetic and providing blood for a transfusion to ensure future survival. The traditional “only bull in the field” interim just doesn’t have the breadth of skills alone.

building capability; We have developed a pragmatic action based learning program inspired by an icebreaker Executive interim Management Award nomination. In 2009 the program content has been refined and taken to the next level by a leading Business school.

resourceful engagement; We help you to develop a business culture that is capable of delivering and supporting change whilst building a company with the skills and motivation to drive itself forward. icebreaker interim management programs specifically mobilize untapped client resources to develop capability rather than flooding the business with expensive support.

return on investment; ll icebreaker programmes are validated in terms of the opportunity to transform a client’s capability and typically deliver 10-50 fold cash return on investment.

“Successful industry is about change – if it isn’t changing it is dying” (Sir John Harvey Jones)

 There is significant waste in resourcing a management gap with temporary or contract resource as when the individual leaves so does the learning. Gap management therefore tends to be purely an incremental cost. This is not interim management. Good interim managers transfer capability retaining an investment by leaving a revived capable legacy. What matters is the way in which and terms external parties interact with client organisations.

  “Are your management team willing to admit there are issues they can’t fix? Are they really interested in engaging with a professional interim manager to support them in making it happen? Or are they more comfortable to cherry pick at an arms length from a consultant’s selection of intellectual candy?”

 Interim Management

Interim managers are given the objective to manage change, alongside the day-day business, then exit.

In the first few days, the interim will evaluate the people capability, identify the key players and develop a hypothetical view of the issues and the necessary changes to move the business forwards. Having identified the main players the interim will agree objectives with the client owner, set their team stretch objectives, and work through and coach their team to establish the management controls, accountability and organisational and reporting structure to better manage the day-day business as well as progress the core change program.

During this time the interim can develop and hone the way forwards based upon the reality check provided by issues arising from the day-day issues. The combination of the day-day responsibility and leading the change strategy provides the interim with the differentiating unique position to firm up the strategy as the scenario unfolds, and the team capability develops.

Furthermore there is no political threat; the professional executive interim manager will have no professional interest in remaining in the organisation; simply delivering the program and developing the incumbent team to the point the interim can exit. If the interim is replacing a departed executive, let they key client team players know and include their coaching objective in the interim manager’s brief.

Consultants

Consultancy or Advisory terms of engagement are quite different; they often form external subject matter expert teams that engage with client teams intermittently. By the very nature of the fact they have no day-day responsibility they miss the opportunity to establish or develop their credibility through progressive incremental improvement of the current business scenario and very often become more distant and therefore inadequately positioned to manage the client team expectations. As they sit outside the operational team their proposals often inevitably become “management intellectual candy”.

Increasing shareholder value in today’s global customer and supply markets presents significant resourcing challenges. In a recent survey 54% of UK Plcs suggested they don’t have sufficient talent at senior management level, and only 21% have talent development programs. This gap is often filled by the high risk external recruitment of permanent staff.

The skills required to line manage a business and align a business are very different. Recruiting a change manager into a permanent role can be a mistake. Conversely a capable line manager can fail when faced with new and immediate challenges, which require a different aptitude and skill set.

Summary

A Professional Executive interim Manager combines the analytical capability of a consultant, the kudos that comes from their varied depth and breadth of experience, and the pragmatism that comes with knowing what the team and supporting business processes are capable of. They are in a unique position to do this by sifting vast quantities of day-day operational information by being very close to and responsible for the day to day issues, and in parallel leading the delivery of the change objectives through the team.

An assignment using an interim will therefore be more likely to deliver effective, lasting, aligned embedded change, will get done quicker and more closely aligned with what the business team is capable of owning and taking forwards.

Furthermore the interims personal and professional motivation to give the client best value is driven by simply getting the job done to get onto their next challenge as fast as they can. This ensures best client value and supports the joint Interim Management / client KPI sharing reward for early completion of an assignment. The interim assignment that is protracted or lasts for years, whilst it may be a nice to have for an interim service provider, is therefore a misnomer, whereas the “sell on” is often the business objective with an advisory or consulting engagement.

To succeed with an interim management assignment the client should agree “the deliverables” and delegate the responsibility and “the how” to the interim to get the job done. Delegation is as central to the success of interim management as delegation is to management coaching, as coaching is central to developing team capability, as team capability is to completing an interim assignment. The incumbent MD should focus on setting out the objective and provide the space, support guidance and framework for the interim to get the job done.

If the incumbent MD has an issue being able to delegate the approach and drifts to a more “hands on” or micromanagement style sound caution—the interim or any other business change program is unlikely to succeed.

Executive Interim management is a misunderstood, untapped strategic investment in a business that should deliver an enduring 10-20 fold return

What action should I be taking with companies in my portfolio?

This is a question being asked by many business owners. The credit crunch recession is testing enterprises like never before, cash preservation is now a key issue with many stakeholders having to put additional own cash into businesses to avoid collapse. Traditional forecasting methods are failing too, as once reliable sources of revenue and supply have now become under threat.

Furthermore, company management typically have little experience of managing in a downturn, let alone a recession as savage and fast moving as the current one.

This deepening financial commitment, combined with heightened risk of collapse and plummeting returns, has forced financial institutions into hands on engagement and unfamiliar territory.  

“With over-gearing and falling sales, management change is high on the agenda and most funds are feeling the pressure to make changes”  VC Executive
(SMT Consulting Market survey of leading VC and PE companies in the UK – Jan 2009)

However, the key questions are – what action should I take and do I have the time to provide “hands on” support to my companies?

Hard facts and experienced interim action is the Icebreaker prescription

To address exactly this need, Icebreaker Executive Interim Management has combined their executive and implementation expertise up with SMT, the UK’s leading provider of hard factual analysis.

SMT, with their unique confidential analysis capability can answer questions such as:

n        Portfolio analysis – which functions / companies to divest, which will fail, which can I save, which can thrive?

n        Which of my key suppliers is likely to fail, and when?

n        How does my cost base compare with the best in the industry?

n        Which of my suppliers can I lever the greatest savings from?

n        How should I restructure the business?

n        Which of my competitors can I take sales from?

This hard factual analysis is then combined with Icebreaker highly experienced interim managers, who have experience of rapidly turning companies round to make a significant bottom line impact – quickly! Whilst retaining value by transferring skills and leaving an enduring legacy

This innovative combination of hard facts, deep insight and experienced interim action, is exactly what is needed in the current environment, and our experience most businesses have the resources to survive.

 “The consulting-plus-implementation angle is a good one; I’m sick of reading consultant reports and thinking: that’s fine, now I just need to hire 15 people to implement it! What I need is action and now”  Partner, Venture Capital

(SMT Consulting Market survey of leading VC and PE companies in the UK – Jan 2009)

Our interim’s have in depth experience of turning companies round in recessionary environments, this experience combined with our wide range of expertise across many market sectors offers a compelling solution to current market challenges.

In addition, to match the current environment, we have a range of success fee based solutions, so we get paid when the benefit hits the bottom line. What’s exciting too if action is taken in time, we have consistently found most businesses have significant untapped resources and a program therefore need not cost a lot.

We would like the opportunity to discuss the results of our findings, and run through a selection of relevant case studies which clearly demonstrate how our unique combination of hard facts and interim action can make an immediate bottom line impact.Tom Pickering CEO Icebreaker Executive Interim Management Limited

“Delivering Results – Transferring Skills and Leaving Legacies”

Websites: www.icebreakerexecutive.com   www.smtconsulting.co.uk

icebreaker clients are able to benefit from our wide range of key deliverables which include:

We will set and agree targets based on getting to the hard facts that others cannot

We enable you to lead on cost and service provision so that you can choose the timing of market price changes and customer service initiatives

We help you reduce costs and improve value through setting targets and working in collaboration with your suppliers

We define your core business functions and improve their performance

We outsource your mediocre non-core functions to specialists in order to improve on cost efficiency and service levels

We engage with and align all of your employees to ensure the successful deployment of your strategic objectives

How icebreaker retain value for mutual benefit of our clients and the icebreaker team

Team based delivery

The core Icebreaker proposition is this. When an Icebreaker client engages us we offer, in addition to implementation expertise, as a minimum a unique team based approach to every project. This involves

Peer review, access to other specialists, CPD and QA using Icebreaker templates and processes (way of working, reporting and administration). This peer review can be

as a minimum informal non charged dialogue – for a narrower project or

Budgeted broad team input – where it is clear the client requirements warrant a broader input. This is charged for in a client proposal, and agreed up front.

The ideal business scenario

Our “sweet spot” is clients with multidimensional issues (because resourcing is likely to involve more than one team member)

BUT the Icebreaker core proposition still holds true in FTSE 50 – SME where there is complexity because the client benefits from the team-based approach to projects as this applies and is available even where only a single member is charged to the client.

Retaining value and a consistent message for our clients:

As a team, we have spent considerable time building the most effective team from the best tier 1 interims. In the process of business development we have invested significant effort nurturing national relationships with organisations that use Icebreaker as the first port of call not just for interim management projects but also for wider solutions to their client business challenges including, but not limited to, turnaround situations.

On each and every occasion the wider team proposition has been key to our offering and our success with these organisations. With icebreaker’s centrally developed relationships where the icebreaker team has collaborated in the business development effort our message is consistent. Even when an assignment requires only one team member – our clients therefore still benefit from the support framework.

Branding and delivery

In other words all project referred by these organisations or icebreaker supported or initiated team efforts, no matter how small, are carried out under Icebreaker branding with the team proposition being core to the sales message with QA and administration from Icebreaker. This preserves the consistent brand message with these organisations the whole team have input to develop. This retains mutual value, and vast consoliodated learning for the mutual benefit of all our team Members and clients alike.

In addition, we guarantee that we will deliver:

Accelerated and well-managed change supported by robust risk management

A management team with the capabilities to support and deliver substantial enduring results

A leaner more agile business

A revitalised team capable of making better business decisions

A 10-20x return (our target is 25% bottom line savings)

We will take ownership of delivering the solution and will leave your team with the capability to drive your business forward.

Proven Success Our client section highlights the clients and sectors with which we have successfully engaged and provides a broad range of example case studies.

Risk and Reward We are prepared to put our money where our mouth is and partner in a Management Buy-In, if the circumstances are right, and or share risk and reward on meeting our agreed growth or profit targets.

Award winning

In addition, you should use us because we win awards for doing this well.

Two years after setting up Icebreaker, Tom Pickering the company’s MD was runner up in the 6000 applicant-strong Interim Manager of the Year Award 2007.

In 2002 Tom led a successful executive operations team through a major change programme during which time they achieved the prestigious Management Today award for Best Electronics and Electrical Plant sponsored by the DTI and Cranfield School of Management. More importantly the team went on to win Business of the Year Award for Excellence in 2007.

Industry analysis and Leadership in Cpontinuous Professional Development

Our ongoing communications activities – including newsletters, blogs, networking opportunities and an industry publication are all aimed at sharing information about the world of interim management based on our extensive knowledge and experience. This enables us to actively share best practice with our clients and interim network, as well as to engage in an ongoing debate to ensure we are continually learning and moving forward.

We also offer our clients the unique opportunity to attend a 2-day residential professional development course on change management titled ‘The people side of change management: How the way we think profoundly influences the success of our businesses’. The course will fundamentally change your ability to succeed and will deliver life changing results. In addition, this intense 24 hours will be recognised as part of your CPD days and will be fully accredited accordingly.