Turnaround at Chiquita
A recent article in Strategy and Business discusses the turnaround at Chiquita Brands. The article entitled, Commit and Deliver stresses the importance of the executive agenda to return the company to profitability. It is a "case study" in the drastic measures required to return a firm from bankruptcy and the teamwork of the board of directors, executives, managers, and employees require to make things happen.
Leadership and management go hand-in-hand in these situations.
What do you think of the agenda?
What do you think of the challenge?
Gene A. Wright
posted by Gene A. Wright @ 12:38 PM
5 Comments:
Turnarounds are a real test of both leadership and managerial agility and ability.
This case is an excellent example of leadership.
The agenda was essential to keep the shareholders interested in hanging in there with the company. The shareholders wanted some means by which to measure improvement. The company could not make earnings commitments since so many basic factors for success were beyond its control. Publishing the Commit and Deliver agenda gave a series of short-term goals that could be monitored by shareholders and stock analysts. The honesty with which the company intended to report its progress seems risky. Chiquita would report not only on its successes, but following full disclosure, on its failures as well. The end result, however, was investors becoming less vocal and more patient, and slowly gaining faith in the envisioned future health of the company.
This was an interesting article to me. It is not very often when a leader is willing to show how bad one is doing. I thought it was great leadership to highlight in red the areas they were doing poorly in. To me this just tells me he was listening and really wanted to change the business. His concern of too much red really just shows all the opportunity for improvement.
RB
The CEO's single agenda was to rebuild a bankrupt company into a profitable, growing enterprise. That agenda informed the strategy of “Commit and Deliver,” according to which the company would succeed or fail based on the quality of its management and its ability to make good on their promises. The CEO felt pressure from numerous stakeholders, each of whom had an idea of what the company should do and what its priorities should be.
Investors and analysts were demanding earnings guidance in the form of a quarterly estimate. The CEO stood firm against this high-pressure demand, on the grounds that three of the most important variables that determined short-term earnings were beyond the company’s control. The company would commit to what it could control, and would deliver on what it promised. This was how investors learned of the “commit and deliver” approach.
The "Commit and Deliver" agenda was a viable choice for Chiquita and they met and exceeded the challenges.
SM
The agenda was exactly what was needed at Chiquita. I sometimes wonder if it’s better for a company to hit such a low point such as bankruptcy, so that it can become extremely focused on critical survival requirements. I enjoyed how the executive management structure, especially the CEO, did not cave into the demands of the short-term minded shareholders. They truly had a vision, and a 3-year plan (which they executed in 18 months), and they stuck to it. Once their strategy of “Commit and Deliver” was executed, a new management team was implemented and they developed a strategy involving leveraging the Chiquita brand and making an acquisition of Fresh Express, a branded produce line. Sounds like the different management teams understood what their key skills were and the transition will do well for the company.
Post a Comment
<< Home