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Leadership lowdown: Lessons from the firing line as a European listed company CEO

Updated: Jun 7, 2023

Global business turnaround expert Michael Dorn, whose RTgroup is headquartered in Cape Town, previously captained the ship of a listed company in Germany. The company, Primacom, was set to merge with another German cable network giant TeleColumbus to become PŸUR, a telecommunications industry leader which is listed on the German stock exchange.

Dorn was appointed as the permanent Chief Restructuring Officer (CRO), and later as their CEO, COO and CFO of Primacom, which found itself in financial difficulty by the mid-2000s. His role was to ensure that the companies’ cash flows were aligned to allow for a successful merger. It was in the era of the Lehmann Brothers fall and many companies were too highly leveraged, including TeleColumbus, which was €1 billion in debt to a complex web of creditors.

Dorn had to deal with market mistrust over the numbers, and spent much of his time in London dealing with anxious banks, private equity firms and lawyers. It was a time of great stress – also because Dorn was unceremoniously fired after leading the company through a very difficult time and after that restoring the operational stability and profitability of the business which enabled the onboarding of new owners.

The experience taught Dorn many valuable business leadership lessons that he can share with other corporate leaders today: Lesson 1: Don’t count your chickens before they hatch

Even if you manage to turn a once ailing company into a stable, profitable operation, historic debt can still make the business vulnerable to takeover by banks, private equity firms and other parties. You need to learn to plan ahead and then let go. Sometimes the work you put into the turnaround of the business opens up unexpected pathways – but know, as long as you have ensured both the financial and people wellbeing of a business, you have done your job right and this will ensure maximum stability for all parties involved. Lesson 2: Learn to balance shareholder and financial stakeholder interests

When a company’s future is at stake, its shareholders, other financial stakeholders and internal managers do often have different end goals in mind. One side might want to wind up the company while the other side wants to save it. As a CEO, it’s important not to choose sides and to only do what’s best for the company and its people in the long-run. Neutrality, clarity of thinking, and radical transparency, are incredibly valuable and effective tools within stakeholder management. Sometimes this involves making hard choices, such as filing for insolvency, other times it might involve taking risks to keep the company afloat. Assess the full picture to make the wisest, most objective and most informed choices for the business. Lesson 3: Don’t be afraid to make hard choices

Do not be afraid of internally restructuring a business to put people with the right mindset into the right positions. This often entails replacing people who have been there for 40 years, but who are unwilling to learn new things, with younger people who having a learning mindset. Any entity that stops growing and evolving, will eventually wither and die. Lesson 4: Accept that you won’t be needed forever

Even if your leadership was very successful, there will always come a time when you are asked to leave. This is especially likely in the event that private equity players, banks, lenders and other stakeholders step in, especially if a merger is looming. You can accept that the day will come when you will no longer be needed to hold the reins. This is a natural turn of events. Prepare the company for positive change and evolution beyond your tenure. Be prepared for this, set your terms upfront, and plan ahead for your own retrenchment. Get very clear on what you are willing to accept. Lesson 5: When things get tough, get very calm and go into problem-solving mode

As a business leader, you need to learn to read people and their motives, and analyse all available data, so that you can be one step ahead. Do proper scenario planning and anticipate any risks that may lie ahead for your business. Use data visualisation to show up the inefficiencies in the business and always pre-emptively kickstart a multi-stage process to address problems in the business. There is great value in adopting a people- and preservation-centred approach. This entails communicating well, treating all parties fairly, being honest about failures and bad news, and getting very clear on where the leadership issues in a business lie. The RTgroup practices a mantra called People, Proactivity and Preservation. In the end, all that

matters is practicing ethical and sustainable leadership that will reap benefits for the long-term.




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