Description
Corporate Transformation and Leadership Law and Business
1
NEW YORK UNIVERSITY
CORPORATE TRANSFORMATION & LEADERSHIP: LAW & BUSINESS
LAW-LW.12254.001; BSPA-GB.3362.30
TRANSFORMING CRISIS TO OPPORTUNITY
SPRING TERM 2014
Dates: February 12- May 7
Meeting Time: 6:00-9:00pm, Wednesday
Classroom: Vanderbilt Hall 216
Professors: Karen Brenner; Helen Scott
Email: [email protected]; [email protected]
Office: Tisch Hall 40 West 4
th
Street, 429; 40 Washington Square South, 338
Office Hours: Available to meet by appointment
Course Objectives:
This course focuses students on all aspects of corporate turnarounds - from the early stages of
recognizing potentially company-threatening problems, to diagnosing and implementing appropriate
corrective market/financial/organizational/legal solutions to such problems. The course will also
explore the important role of communication and leadership in effecting corporate turnarounds.
Students will be challenged to enhance skills in leadership, communication, and collaboration.
Course Description:
This course examines the opportunity for transformational change emanating from a corporate crisis.
We explore the following question: how does senior level management effectively change an
organization in response to dramatic changes in circumstances? All too often, managers and corporate
boards fail to recognize factors that threaten the firm’s business until its very survival is in doubt. In
such cases, the board of directors and management may need to implement drastic and sudden
changes in several aspects of the firm.
The course draws on several of the core disciplines in the MBA program, and provides an opportunity
to apply them to organizations in the midst of major transitions. Students should come into this
course ready to integrate various business disciplines- applying both quantitative and qualitative tools
drawn from accounting, corporate finance, cash flow modeling, debt restructuring, negotiation,
2
marketing, management, leadership and communication. An important aspect of the course is the
role of leadership in creating a transformational opportunity resulting from a crisis. Financial, market,
and organizational aspects of transformation will be explored through case studies, articles, texts and
class discussion.
The course is relevant for students who anticipate working in any operating company or in a firm
advising and/or interacting with such a company- including consultants, turnaround specialists,
venture capital and private equity professionals, activist fund managers, and bankers. The skills
developed in this course should be applicable to professionals throughout their careers. Specific
attention is paid to cultivating skills appropriate to early stage career assignments.
Prerequisites:
This is an advanced course that assumes students are familiar with accounting, corporate finance, and
management.
Grading:
The weights for the student’s overall grade are:
Class participation 25%
Short Papers 40%
Final project 35%
(No more than 35% of students will receive a grade of A or A-)
Class participation:
Your obligation in this course is to prepare for class discussion by thoroughly reading and analyzing
each of the assigned materials before each class. This is an essential part of the course. Students are
responsible for being prepared to discuss answers to all of the study questions before coming to class.
The instructor may ask students to present the assigned materials as a basis for discussion.
Short papers:
Each student should prepare four written analyses. Each analysis should answer one question from
three different sessions and must be submitted prior to addressing the question in class. The
objective in the short papers is to demonstrate mastery of the course concepts by integrating the
reading material, as is appropriate, in your analyses. These analyses should be 3-4 pages in length
3
(typed and double-spaced). The papers must be submitted on BB and are due on or before Sessions 3,
5, 7 and 9.
Final team project:
On the first day of class each student will be assigned to a team for the final project. The final team
project will be a class presentation of a turnaround situation. The team will be asked to select a
specific turnaround situation and present a discussion of the case to include: reasons for the business
failure/underperformance; a diagnosis of the market/financial/operational/legal/leadership elements
relevant to a turnaround plan; and an action plan to restore the company to a profitable state.
(Companies may be selected from the following sources: debt selling greater than or equal to 10bps
above treasuries; earnings decline of greater than or equal to 30% over the last 12 months, and/or;
rating agencies downgrade to CCC.) The purpose of this project is to apply the principles of corporate
turnarounds to an actual, specific business situation. The presentation may include an analysis of
alternative approaches (should the turnaround be complete) that could have yielded a preferred
result. Integrating the course material (text, cases, and leadership lessons) to the analysis is essential.
The presentation slides or other written product should be submitted to the professors before
beginning the case presentation in class. After the presentation, which is to last no more than ___
minutes, the team is expected to address questions from the class, which is to last no more than ___
minutes. Each member of the team MUST also complete and submit either by email, or in person, a
confidential team evaluation at the conclusion of the presentation. Grades will be adversely impacted
if there is a failure to submit the confidential team evaluation. The evaluation form is available on BB
under Course Documents.
Readings:
1. Required Textbook: Corporate Turnaround: How Managers Turn Losers Into Winners by
Donald B. Bibeault. Beard Books, 1999. Available at the NYU Professional Bookstore.
2. Required Digital Course pack. Available at the NYU Professional Bookstore.
3. Additional readings available on Course Blackboard (BB) site under Course Documents.
Class Schedule:
Session #1: Textbook:
This session has more reading material than the remaining sessions as there are introductory concepts
that we will be referring to throughout the semester. Please do not be concerned that this is
representative of the weekly readings.
Course Overview and Introduction: Introduction, Pages 1-4;
Chapter 9, Pages 81-90
The Corporate Turnaround Perspective
4
Reasons for Corporate Decline: Chapters 1-2, Pages 7-26;
Chapters 6-7, Pages 49-71
Failure and Decline in Perspective; Predictable Organizational Crisis; Most Common Management
Errors; Early Warning Signals of Decline- Quantitative and Qualitative
Readings:
Turnaround Management: The Past as Prologue, Howard Brownstein (BB)
Distress Prediction Models: Catalysts for Constructive Change- Managing a Financial Turnaround (BB)
Leadership and the Psychology of Turnarounds by Rosabeth Moss Kanter
Rhetoric by Aristotle, Book I, Parts 1 and Part of Part 2 (BB)
Tyco International Corporate Governance by Rakesh Khurana and James Weber
Corporate Governance Update: Can You Resign from the Board of a Troubled Company? New York
Law Journal May 23, 2013 (BB)
If the Boss Rides a Harley, He Must Be Human NYTimes Corner Office, May 1, 2013 (BB)
In A Near-Death Event, a Corporate Rite of Passage NYTimes, Corner Office, August 2, 2009 (BB)
I’m Prepared for Adversity. I Waited Tables NYTimes, Corner Office, June 6, 2010 (BB)
Finding Purpose in Tunneling Through Granit NYTimes, Corner Office, April 13, 2013 (BB)
Questions:
1. What is the pathology/cycle of decline in organizations as depicted by Kanter? What can an
executive do to reverse the cycle? Why are Aristotelian notions of rhetoric especially
important in turnaround situations?
2. What is the “Z-Score?” How, and why can it be applied to a turnaround? What elements did
GTI apply to aid it in its restructuring and how effective was it?
3. What are the characteristics of a turnaround? What are the types of business failures and
what are some of the characteristics of a firm on the way to failure? Which are most common
and why?
4. How did Breen turn a crisis into an opportunity? Relate readings from the textbook to Tyco’s
experience. What were the reasons for the corporate decline? What were the early actions
taken and why? What constraints was the Company under that limited Breen’s flexibility early
on? How would you assess his decision to completely replace his board of directors? Were
5
there legal impediments to the board resigning? What were the implications on value
creation?
Session # 2: Textbook:
Stages in the Turnaround Cycle: Chapter 10, Pages 91-109
Management Change Stage; Evaluation Stage; Emergency Stage; Stabilization Stage; Return to Normal
Growth Stage
Key Factors in Turnaround Success Chapter 11, Pages 111-123
Readings:
Dragonfly Corporation by Howard H. Stevenson and Jim Sharpe
A Strategic Perspective on Bankruptcy by Bill George, Jim Sharpe and Andrew N. McLean
The Art of Adding by Taking Away NYTimes, Corner Office, January 19, 2013 (BB)
In Sports or Business, Always Prepare for the Next Play NYTimes, Corner Office, November 10, 2012
(BB)
Want to Lead? Ask Tennyson and Shakespeare NYTimes, Corner Office, September 3, 2011 (BB)
Questions:
1. What are the stages in a turnaround cycle and what characteristics and actions are specific to
each stage, and why? What are the key factors to a successful turnaround?
2. In Dragonfly Corporation identify the: stakeholders, early warning signals of distress, key
factors for success to be profitable in this business, and the liquidation value. Determine the
strategic alternatives available and, given your answers to the preceding questions, a
rationale for identifying a particular path. Consider the legal implications in your analysis.
Session # 3: Textbook:
Role of Management and Leadership: Chapter 8, Pages 73-77
Chapters 13-16, Pages 141-199
Management Change; Turnaround Leader Characteristics; Taking Charge; Motivating the Organization
Readings:
6
Tipping Point Leadership by W. Chan Kim and Renee Mauborgne
He Prizes Questions More than Answers NYTimes, Corner Office, October 25, 2009 (BB)
Of Passion, and Playing in Traffic NYTimes, Corner Office, December 6, 2009 (BB)
How to Adopt Mentors Without Really Asking NYTimes, Corner Office, April 28, 2012 (BB)
Leadership Never Looks Prepackaged NYTimes, Corner Office, August 18, 2012 (BB)
A Good Mentor Never Tramples on Big Dreams NYTimes, Corner Office, December 18, 2012 (BB)
If Supervisors Respect the Values, So Will Everyone Else NYTimes, Corner Office, January 26, 2014 (BB)
Questions:
1. What were the circumstances upon Bratton’s arrival? What were the hurdles he had to
overcome? How did he overcome each one? What actions created the greatest leverage in the
short term? What were the critical reasons for his success? Integrate the readings from the
textbook into your analysis.
2. From the leadership interviews to date, what are the leadership lessons most applicable to
turnarounds and why? What leadership exemplars would you point to in supporting your
position?
Session # 4:
Role of Management and Leadership- Moral Obligations in Downsizing
Readings:
Leading Change- Why Transformation Efforts Fail by John P. Kotter
The Work of Leadership by Ronald A. Heifetz and Donald L. Laurie
Where Leadership Starts by Robert A. Eckert
Turnaround Retrenchment and Recovery by D. Keith Robbins and John A. Pearce II
Voices of Survivors: Words That Downsizing CEOs Should Hear by Hugh M. O’Neill and D. Jeffrey Lenn
Strategies for Responsible Restructuring by Wayne, F. Cascio, Academy of Management Executive,
2005, Vol. 19 No. 4
Primal Leadership The Hidden Driver of Great Performance by Daniel Goleman, Richard Boyatzis, and
Annie McKee
7
The Importance of Painting a Clear Picture NYTimes, Corner Office, November 26, 2011 (BB)
Charisma? To Her It’s Overrated NYTimes, Corner Office, July 5, 2009 (BB)
At Yum Brands, Rewards for Good Works NYTimes, Corner Office, July 12, 2009 (BB)
Leadership without a Secret Code NYTimes, Corner Office, November 1, 2009 (BB)
A Blueprint for Leadership: Show, Don’t Tell NYTimes, Corner Office, December 10, 2011 (BB)
Strive for Results, Not for the Accolades NYTimes, Corner Office, December 31, 2011 (BB)
Do You Share Our Goals? Sign Our Constitution NYTimes, Corner Office, February 18, 2012 (BB)
Questions:
1. From the leadership interviews to date, “The Work of Leadership,” and “Where Leadership
Starts,” what are the leadership lessons that are most applicable to turnarounds and why?
How would you juxtapose these lessons with “Why Transformation Efforts Fail?” Consider
your exemplars from last week’s class to support your position.
2. According to Pearce and Robbins, what are the usual turnaround steps that are most effective
and why? Describe the elements of retrenchment. In a turnaround that may involve
retrenchment and layoffs of personnel what principles would guide your judgment and your
communication to employees? Prepare a presentation for the class.
Session # 5:
Role of Management and Leadership in Crisis
Readings:
A Leader’s Framework for Decision Making by David J. Snowden and Mary E. Boone
Unintended Acceleration: Toyota’s Recall Crisis by David Austen-Smith, Daniel Diermeier, and Eitan
Zemel
Companies Can Apologize: Corporate Apologies and Legal Liability, Ameeta Patel and Lamar Reinsch,
Business Communication Quarterly 2003 66: 9
The GC as ‘Chief Crisis Manager’ in the Wake of Tragic Events by James F. Haggerty, Corporate
Counsel, July 30, 2012 (BB)
You Have to Lead From Everywhere, An Interview with Admiral Thad Allen, USCG (Ret.) by Scott
Berinato
8
Making Yourself Indispensable by John H. Zenger, Joseph R. Folkman, and Scott K. Edinger
A Boss’s Challenge: Have Everyone Join the ‘In’ Group NYTimes, Corner Office, March 23, 2013 (BB)
You’ve Been Doing a Fantastic Job. Just One Thing… Alice Tugend, NYTimes, April 5, 2013 (BB)
David Reimer of Merryck & co., on Sticking to Values NYTimes, Corner Office, July 13, 2013 (BB)
Questions:
1. Integrating “A Leader’s Framework” and “Companies Can Apologize” assess Toyota’s crisis
response strategy. What was the crisis about and what made it challenging for Toyota? If you
were the CEO or GC of a company that had a product recall how would you have responded to
this crisis? Describe the elements before, during and after the events.
2. From “Making Yourself Indispensible” create a feedback form that you would find helpful to
integrate into the final team project. Assess your core competencies, passions and group
needs.
Session # 6:
Innovation and Entrepreneurship in Turnarounds
Leadership in Crisis: Ernest Shackleton and the Epic Voyage of the Endurance by Nancy F. Koehn
Solitude and Leadership, William Deresiewicz, United States Military Academy at West Point, March 1,
2010 (BB)
The Weird Rules of Creativity by Robert I. Sutton
How Successful Leaders Think by Roger Martin
In the School of Innovation, Less is Often More by Nicole LaPorte, NYTimes, November 5, 2011 (BB)
So Your Idea Hit a Brick Wall. Congratulations! NYTimes, Corner Office, May 26, 2012 (BB)
If You Don’t Know Your Co-Workers, Mix Up the Chairs NYTimes, Corner Office, July 28, 2012 (BB)
Your Company Can Deliver, but Can It Discover? NYTimes, Corner Office, July 21, 2012 (BB)
When Humility and Audacity Go Hand in Hand NYTimes, Corner Office, September 29, 2012 (BB)
A Good Manager Must Be More Than a Messenger, NYTimes, Corner Office, May 30, 2013 (BB)
Questions:
9
1. In what context should the Endurance Expedition be analyzed- as a scientific endeavor, an
entrepreneurial venture or an exercise in imperial opportunity? By what criteria should the
expedition be evaluated? Given your answer to the preceding question, was it a success or a
failure?
2. What parallels do you see between Shackleton and other leaders? What were his strengths
and weaknesses? Incorporate concepts from “Solitude and Leadership” in your answer.
3. How do the principles of integrative thinking in “How Successful Leaders Think” and “The
Weird Rules of Creativity” apply to the School of Innovation? What are other examples of
these principles?
Session # 7: Textbook:
Turnaround Strategies and Practices:
The Evaluation Stage: Chapter 17, Pages 203-229
Structure of Evaluation; Viability: Financial, Competitive, Organizational Assessments
Planning Strategies by Stage Chapter 18, Pages 231-261
Contrast the Various Planning Requirements by Stage of Turnaround
Readings:
Right Away and All at Once: How We Saved Continental by Greg Brenneman
Profit Pools: A Fresh Look at Strategy by Orit Gadiesh and James L. Gilbert
Can You Pass A CEO Test? NYTimes, Corner Office, March 15, 2009 (BB)
On a Scale of 1 to 10, How Weird Are You? NYTimes, Corner Office, January 10, 2010 (BB)
Where Are You When the Going Gets Tough? NYTimes, Corner Office, April 10, 2010 BB)
Getting Ahead by Having Answers Instead of Questions NYTimes, Corner Office, May 27, 2013 (BB)
Questions:
1. What was Brenneman’s motivation for taking the job to turnaround Continental? What were
the circumstances upon his arrival at the Company? What was his philosophy about the
people at the Company? What were the key strategic elements on which he focused to drive
the turnaround? Elaborate on one of the elements and explain how it contributed to the
effort.
10
2. How would you compare/contrast the different planning elements for each stage of a
turnaround? What are the objectives, strategies and tactics unique to each stage? What
financial impediments are you likely to find in a turnaround situation?
Session # 8: Textbook:
The Emergency Stage: Chapter 19, Pages 263-298
Asset Redeployment; Financial Management; Operations Management; Marketing Management in an
Emergency Stage
Readings:
Jamie Dimon and Bank One (A) by Paul M. Marshall and Todd Thedinga
In a Word, He Wants Simplicity NYTimes, Corner Office, May 24, 2009 (BB)
The Keeper of That Tapping Pen NYTimes, Corner Office, March 22, 2009 (BB)
Get a Diploma, but Then Get a Passport NYTimes, Corner Office, August 1, 2010 (BB)
Questions:
1. How would you evaluate the actions Dimon has taken since becoming CEO? What is he trying
to accomplish in addition to learning about the situation? What signals is he sending to the
organization? What are the most important problems he is facing upon his arrival? What plan
of action would you recommend?
Session # 9: Textbook:
The Stabilization Stage: Chapter 20, Pages 299-335
The Return-to-Growth Stage: Chapter 21, Pages 337-361
Financial Management; Operations Management; Marketing Management in the Stabilization and
Return-to-Growth Stages
Readings:
Nissan Motor Co., Ltd., 2002 by Michael Yoshino and Masako Egawa
At Ford, Turnaround Is Job One by James B. Shein
11
Strategic Transformation as the Essential Last Step in the Process of Business Turnaround by John A.
Pearce II and D. Keith Robbins
The Driver in Ford’s Amazing Race by Nancy F. Koehn (BB)
Ford’s Mr. Inside, in Sight of the Crown by Bill Vlasic (BB)
Why Companies Fail by Megan Mc Ardle (BB)
Level 5 Leadership- The Triumph of Humility and Fierce Resolve by Jim Collins
The Higher Ambition Leader by Nathaniel Foote, Russell Eisenstat, and Tobias Fredberg
Feedback in Heaping Helpings NYTimes, Corner Office, March 29, 2009 (BB)
Managing Globally, and Locally NYTimes, Corner Office, December 13, 2009 (BB)
Remember to Thank Your Star Players NYTimes, Corner Office, July 11, 2010 (BB)
Want to Lead? Learn to Nurture Your Butterflies NYTimes, Corner Office, November 19, 2011 (BB)
Never Swerve When Driving the Bus NYTimes, Corner Office, May 5, 2012 (BB)
Questions:
1. What were the circumstances upon Ghosn’s arrival? Why have his efforts succeeded when
other restructuring efforts before had failed to be sustained? What were the key drivers of
success in the turnaround? How did cultural and ownership circumstances affect his strategy?
What were the implications on value creation?
2. Compare and contrast the turnaround efforts at Ford with those at Nissan. What were the
internal/external reasons for decline? Could the companies cut their way to a turnaround?
Why did previous efforts in both cases fail and these efforts lead to success?
3. When is a strategic transformation critical to a turnaround and what are its elements?
4. From the last four sessions, what are the leadership lessons that are most applicable to
turnarounds and why? What are the key strategic, financial and operational elements to
assure institutionalization of the elements of a turnaround? What leadership characteristics
are important in providing for the enduring value created in a turnaround?
Session # 10:
Takeover Vulnerability
Readings:
12
PRG-Schultz International by Paul W. Marshall and James Weber
Blockbuster’s Former CEO on Sparring With an Activist Shareholder by John Antioco
Turnaround Management Every Day by John O. Whitney
Netflix Looks Back on Its Near-Death Spiral by James B. Stewart, NYTimes, April 26, 2013 (BB)
What’s Luck Got to Do With It? By Jim Collins and Morten T. Hansen, NYTimes, October 29, 2011 (BB)
Distilling the Wisdom of CEO’s by Adam Bryant, NYTimes, April 16, 2011 (BB)
On A Busy Road, A Company Needs Guardrails, NYTimes, Corner Office, October 13, 2012 (BB)
Fred Hassan of Bausch & Lomb, on Managers as Ambassadors NYTimes, Corner Office, July 27, 2013
(BB)
Questions:
1. In PRG-Schultz, how did the company get into this dire a situation? Assess Mc Curry’s first
eight weeks on the job, both his positive and negative actions. What should he do now? Six
months from now?
2. What circumstances created vulnerability for Blockbuster and how could they have been
countered?
Session # 11 and # 12:
Team Presentation and Course Recap
Additional Readings (not required):
The Opposable Mind by Roger Martin
The Innovator’s Dilemma- When New Technologies Cause Great Firms to Fail by Clayton M.
Christensen
Journey to the Emerald City by Roger Connors and Tom Smith
Corporate Financial Distress and Bankruptcy by Edward I. Altman and Edith Hotchkiss
Team of Rivals by Doris Kearns Goodwin
The Servant as Leader by Robert K. Greenleaf
The Outsiders by William N. Thorndike, Jr.
Great by Choice by James C. Collins and Morten T. Hansen
13
doc_912838149.pdf
Corporate Transformation and Leadership Law and Business
1
NEW YORK UNIVERSITY
CORPORATE TRANSFORMATION & LEADERSHIP: LAW & BUSINESS
LAW-LW.12254.001; BSPA-GB.3362.30
TRANSFORMING CRISIS TO OPPORTUNITY
SPRING TERM 2014
Dates: February 12- May 7
Meeting Time: 6:00-9:00pm, Wednesday
Classroom: Vanderbilt Hall 216
Professors: Karen Brenner; Helen Scott
Email: [email protected]; [email protected]
Office: Tisch Hall 40 West 4
th
Street, 429; 40 Washington Square South, 338
Office Hours: Available to meet by appointment
Course Objectives:
This course focuses students on all aspects of corporate turnarounds - from the early stages of
recognizing potentially company-threatening problems, to diagnosing and implementing appropriate
corrective market/financial/organizational/legal solutions to such problems. The course will also
explore the important role of communication and leadership in effecting corporate turnarounds.
Students will be challenged to enhance skills in leadership, communication, and collaboration.
Course Description:
This course examines the opportunity for transformational change emanating from a corporate crisis.
We explore the following question: how does senior level management effectively change an
organization in response to dramatic changes in circumstances? All too often, managers and corporate
boards fail to recognize factors that threaten the firm’s business until its very survival is in doubt. In
such cases, the board of directors and management may need to implement drastic and sudden
changes in several aspects of the firm.
The course draws on several of the core disciplines in the MBA program, and provides an opportunity
to apply them to organizations in the midst of major transitions. Students should come into this
course ready to integrate various business disciplines- applying both quantitative and qualitative tools
drawn from accounting, corporate finance, cash flow modeling, debt restructuring, negotiation,
2
marketing, management, leadership and communication. An important aspect of the course is the
role of leadership in creating a transformational opportunity resulting from a crisis. Financial, market,
and organizational aspects of transformation will be explored through case studies, articles, texts and
class discussion.
The course is relevant for students who anticipate working in any operating company or in a firm
advising and/or interacting with such a company- including consultants, turnaround specialists,
venture capital and private equity professionals, activist fund managers, and bankers. The skills
developed in this course should be applicable to professionals throughout their careers. Specific
attention is paid to cultivating skills appropriate to early stage career assignments.
Prerequisites:
This is an advanced course that assumes students are familiar with accounting, corporate finance, and
management.
Grading:
The weights for the student’s overall grade are:
Class participation 25%
Short Papers 40%
Final project 35%
(No more than 35% of students will receive a grade of A or A-)
Class participation:
Your obligation in this course is to prepare for class discussion by thoroughly reading and analyzing
each of the assigned materials before each class. This is an essential part of the course. Students are
responsible for being prepared to discuss answers to all of the study questions before coming to class.
The instructor may ask students to present the assigned materials as a basis for discussion.
Short papers:
Each student should prepare four written analyses. Each analysis should answer one question from
three different sessions and must be submitted prior to addressing the question in class. The
objective in the short papers is to demonstrate mastery of the course concepts by integrating the
reading material, as is appropriate, in your analyses. These analyses should be 3-4 pages in length
3
(typed and double-spaced). The papers must be submitted on BB and are due on or before Sessions 3,
5, 7 and 9.
Final team project:
On the first day of class each student will be assigned to a team for the final project. The final team
project will be a class presentation of a turnaround situation. The team will be asked to select a
specific turnaround situation and present a discussion of the case to include: reasons for the business
failure/underperformance; a diagnosis of the market/financial/operational/legal/leadership elements
relevant to a turnaround plan; and an action plan to restore the company to a profitable state.
(Companies may be selected from the following sources: debt selling greater than or equal to 10bps
above treasuries; earnings decline of greater than or equal to 30% over the last 12 months, and/or;
rating agencies downgrade to CCC.) The purpose of this project is to apply the principles of corporate
turnarounds to an actual, specific business situation. The presentation may include an analysis of
alternative approaches (should the turnaround be complete) that could have yielded a preferred
result. Integrating the course material (text, cases, and leadership lessons) to the analysis is essential.
The presentation slides or other written product should be submitted to the professors before
beginning the case presentation in class. After the presentation, which is to last no more than ___
minutes, the team is expected to address questions from the class, which is to last no more than ___
minutes. Each member of the team MUST also complete and submit either by email, or in person, a
confidential team evaluation at the conclusion of the presentation. Grades will be adversely impacted
if there is a failure to submit the confidential team evaluation. The evaluation form is available on BB
under Course Documents.
Readings:
1. Required Textbook: Corporate Turnaround: How Managers Turn Losers Into Winners by
Donald B. Bibeault. Beard Books, 1999. Available at the NYU Professional Bookstore.
2. Required Digital Course pack. Available at the NYU Professional Bookstore.
3. Additional readings available on Course Blackboard (BB) site under Course Documents.
Class Schedule:
Session #1: Textbook:
This session has more reading material than the remaining sessions as there are introductory concepts
that we will be referring to throughout the semester. Please do not be concerned that this is
representative of the weekly readings.
Course Overview and Introduction: Introduction, Pages 1-4;
Chapter 9, Pages 81-90
The Corporate Turnaround Perspective
4
Reasons for Corporate Decline: Chapters 1-2, Pages 7-26;
Chapters 6-7, Pages 49-71
Failure and Decline in Perspective; Predictable Organizational Crisis; Most Common Management
Errors; Early Warning Signals of Decline- Quantitative and Qualitative
Readings:
Turnaround Management: The Past as Prologue, Howard Brownstein (BB)
Distress Prediction Models: Catalysts for Constructive Change- Managing a Financial Turnaround (BB)
Leadership and the Psychology of Turnarounds by Rosabeth Moss Kanter
Rhetoric by Aristotle, Book I, Parts 1 and Part of Part 2 (BB)
Tyco International Corporate Governance by Rakesh Khurana and James Weber
Corporate Governance Update: Can You Resign from the Board of a Troubled Company? New York
Law Journal May 23, 2013 (BB)
If the Boss Rides a Harley, He Must Be Human NYTimes Corner Office, May 1, 2013 (BB)
In A Near-Death Event, a Corporate Rite of Passage NYTimes, Corner Office, August 2, 2009 (BB)
I’m Prepared for Adversity. I Waited Tables NYTimes, Corner Office, June 6, 2010 (BB)
Finding Purpose in Tunneling Through Granit NYTimes, Corner Office, April 13, 2013 (BB)
Questions:
1. What is the pathology/cycle of decline in organizations as depicted by Kanter? What can an
executive do to reverse the cycle? Why are Aristotelian notions of rhetoric especially
important in turnaround situations?
2. What is the “Z-Score?” How, and why can it be applied to a turnaround? What elements did
GTI apply to aid it in its restructuring and how effective was it?
3. What are the characteristics of a turnaround? What are the types of business failures and
what are some of the characteristics of a firm on the way to failure? Which are most common
and why?
4. How did Breen turn a crisis into an opportunity? Relate readings from the textbook to Tyco’s
experience. What were the reasons for the corporate decline? What were the early actions
taken and why? What constraints was the Company under that limited Breen’s flexibility early
on? How would you assess his decision to completely replace his board of directors? Were
5
there legal impediments to the board resigning? What were the implications on value
creation?
Session # 2: Textbook:
Stages in the Turnaround Cycle: Chapter 10, Pages 91-109
Management Change Stage; Evaluation Stage; Emergency Stage; Stabilization Stage; Return to Normal
Growth Stage
Key Factors in Turnaround Success Chapter 11, Pages 111-123
Readings:
Dragonfly Corporation by Howard H. Stevenson and Jim Sharpe
A Strategic Perspective on Bankruptcy by Bill George, Jim Sharpe and Andrew N. McLean
The Art of Adding by Taking Away NYTimes, Corner Office, January 19, 2013 (BB)
In Sports or Business, Always Prepare for the Next Play NYTimes, Corner Office, November 10, 2012
(BB)
Want to Lead? Ask Tennyson and Shakespeare NYTimes, Corner Office, September 3, 2011 (BB)
Questions:
1. What are the stages in a turnaround cycle and what characteristics and actions are specific to
each stage, and why? What are the key factors to a successful turnaround?
2. In Dragonfly Corporation identify the: stakeholders, early warning signals of distress, key
factors for success to be profitable in this business, and the liquidation value. Determine the
strategic alternatives available and, given your answers to the preceding questions, a
rationale for identifying a particular path. Consider the legal implications in your analysis.
Session # 3: Textbook:
Role of Management and Leadership: Chapter 8, Pages 73-77
Chapters 13-16, Pages 141-199
Management Change; Turnaround Leader Characteristics; Taking Charge; Motivating the Organization
Readings:
6
Tipping Point Leadership by W. Chan Kim and Renee Mauborgne
He Prizes Questions More than Answers NYTimes, Corner Office, October 25, 2009 (BB)
Of Passion, and Playing in Traffic NYTimes, Corner Office, December 6, 2009 (BB)
How to Adopt Mentors Without Really Asking NYTimes, Corner Office, April 28, 2012 (BB)
Leadership Never Looks Prepackaged NYTimes, Corner Office, August 18, 2012 (BB)
A Good Mentor Never Tramples on Big Dreams NYTimes, Corner Office, December 18, 2012 (BB)
If Supervisors Respect the Values, So Will Everyone Else NYTimes, Corner Office, January 26, 2014 (BB)
Questions:
1. What were the circumstances upon Bratton’s arrival? What were the hurdles he had to
overcome? How did he overcome each one? What actions created the greatest leverage in the
short term? What were the critical reasons for his success? Integrate the readings from the
textbook into your analysis.
2. From the leadership interviews to date, what are the leadership lessons most applicable to
turnarounds and why? What leadership exemplars would you point to in supporting your
position?
Session # 4:
Role of Management and Leadership- Moral Obligations in Downsizing
Readings:
Leading Change- Why Transformation Efforts Fail by John P. Kotter
The Work of Leadership by Ronald A. Heifetz and Donald L. Laurie
Where Leadership Starts by Robert A. Eckert
Turnaround Retrenchment and Recovery by D. Keith Robbins and John A. Pearce II
Voices of Survivors: Words That Downsizing CEOs Should Hear by Hugh M. O’Neill and D. Jeffrey Lenn
Strategies for Responsible Restructuring by Wayne, F. Cascio, Academy of Management Executive,
2005, Vol. 19 No. 4
Primal Leadership The Hidden Driver of Great Performance by Daniel Goleman, Richard Boyatzis, and
Annie McKee
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The Importance of Painting a Clear Picture NYTimes, Corner Office, November 26, 2011 (BB)
Charisma? To Her It’s Overrated NYTimes, Corner Office, July 5, 2009 (BB)
At Yum Brands, Rewards for Good Works NYTimes, Corner Office, July 12, 2009 (BB)
Leadership without a Secret Code NYTimes, Corner Office, November 1, 2009 (BB)
A Blueprint for Leadership: Show, Don’t Tell NYTimes, Corner Office, December 10, 2011 (BB)
Strive for Results, Not for the Accolades NYTimes, Corner Office, December 31, 2011 (BB)
Do You Share Our Goals? Sign Our Constitution NYTimes, Corner Office, February 18, 2012 (BB)
Questions:
1. From the leadership interviews to date, “The Work of Leadership,” and “Where Leadership
Starts,” what are the leadership lessons that are most applicable to turnarounds and why?
How would you juxtapose these lessons with “Why Transformation Efforts Fail?” Consider
your exemplars from last week’s class to support your position.
2. According to Pearce and Robbins, what are the usual turnaround steps that are most effective
and why? Describe the elements of retrenchment. In a turnaround that may involve
retrenchment and layoffs of personnel what principles would guide your judgment and your
communication to employees? Prepare a presentation for the class.
Session # 5:
Role of Management and Leadership in Crisis
Readings:
A Leader’s Framework for Decision Making by David J. Snowden and Mary E. Boone
Unintended Acceleration: Toyota’s Recall Crisis by David Austen-Smith, Daniel Diermeier, and Eitan
Zemel
Companies Can Apologize: Corporate Apologies and Legal Liability, Ameeta Patel and Lamar Reinsch,
Business Communication Quarterly 2003 66: 9
The GC as ‘Chief Crisis Manager’ in the Wake of Tragic Events by James F. Haggerty, Corporate
Counsel, July 30, 2012 (BB)
You Have to Lead From Everywhere, An Interview with Admiral Thad Allen, USCG (Ret.) by Scott
Berinato
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Making Yourself Indispensable by John H. Zenger, Joseph R. Folkman, and Scott K. Edinger
A Boss’s Challenge: Have Everyone Join the ‘In’ Group NYTimes, Corner Office, March 23, 2013 (BB)
You’ve Been Doing a Fantastic Job. Just One Thing… Alice Tugend, NYTimes, April 5, 2013 (BB)
David Reimer of Merryck & co., on Sticking to Values NYTimes, Corner Office, July 13, 2013 (BB)
Questions:
1. Integrating “A Leader’s Framework” and “Companies Can Apologize” assess Toyota’s crisis
response strategy. What was the crisis about and what made it challenging for Toyota? If you
were the CEO or GC of a company that had a product recall how would you have responded to
this crisis? Describe the elements before, during and after the events.
2. From “Making Yourself Indispensible” create a feedback form that you would find helpful to
integrate into the final team project. Assess your core competencies, passions and group
needs.
Session # 6:
Innovation and Entrepreneurship in Turnarounds
Leadership in Crisis: Ernest Shackleton and the Epic Voyage of the Endurance by Nancy F. Koehn
Solitude and Leadership, William Deresiewicz, United States Military Academy at West Point, March 1,
2010 (BB)
The Weird Rules of Creativity by Robert I. Sutton
How Successful Leaders Think by Roger Martin
In the School of Innovation, Less is Often More by Nicole LaPorte, NYTimes, November 5, 2011 (BB)
So Your Idea Hit a Brick Wall. Congratulations! NYTimes, Corner Office, May 26, 2012 (BB)
If You Don’t Know Your Co-Workers, Mix Up the Chairs NYTimes, Corner Office, July 28, 2012 (BB)
Your Company Can Deliver, but Can It Discover? NYTimes, Corner Office, July 21, 2012 (BB)
When Humility and Audacity Go Hand in Hand NYTimes, Corner Office, September 29, 2012 (BB)
A Good Manager Must Be More Than a Messenger, NYTimes, Corner Office, May 30, 2013 (BB)
Questions:
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1. In what context should the Endurance Expedition be analyzed- as a scientific endeavor, an
entrepreneurial venture or an exercise in imperial opportunity? By what criteria should the
expedition be evaluated? Given your answer to the preceding question, was it a success or a
failure?
2. What parallels do you see between Shackleton and other leaders? What were his strengths
and weaknesses? Incorporate concepts from “Solitude and Leadership” in your answer.
3. How do the principles of integrative thinking in “How Successful Leaders Think” and “The
Weird Rules of Creativity” apply to the School of Innovation? What are other examples of
these principles?
Session # 7: Textbook:
Turnaround Strategies and Practices:
The Evaluation Stage: Chapter 17, Pages 203-229
Structure of Evaluation; Viability: Financial, Competitive, Organizational Assessments
Planning Strategies by Stage Chapter 18, Pages 231-261
Contrast the Various Planning Requirements by Stage of Turnaround
Readings:
Right Away and All at Once: How We Saved Continental by Greg Brenneman
Profit Pools: A Fresh Look at Strategy by Orit Gadiesh and James L. Gilbert
Can You Pass A CEO Test? NYTimes, Corner Office, March 15, 2009 (BB)
On a Scale of 1 to 10, How Weird Are You? NYTimes, Corner Office, January 10, 2010 (BB)
Where Are You When the Going Gets Tough? NYTimes, Corner Office, April 10, 2010 BB)
Getting Ahead by Having Answers Instead of Questions NYTimes, Corner Office, May 27, 2013 (BB)
Questions:
1. What was Brenneman’s motivation for taking the job to turnaround Continental? What were
the circumstances upon his arrival at the Company? What was his philosophy about the
people at the Company? What were the key strategic elements on which he focused to drive
the turnaround? Elaborate on one of the elements and explain how it contributed to the
effort.
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2. How would you compare/contrast the different planning elements for each stage of a
turnaround? What are the objectives, strategies and tactics unique to each stage? What
financial impediments are you likely to find in a turnaround situation?
Session # 8: Textbook:
The Emergency Stage: Chapter 19, Pages 263-298
Asset Redeployment; Financial Management; Operations Management; Marketing Management in an
Emergency Stage
Readings:
Jamie Dimon and Bank One (A) by Paul M. Marshall and Todd Thedinga
In a Word, He Wants Simplicity NYTimes, Corner Office, May 24, 2009 (BB)
The Keeper of That Tapping Pen NYTimes, Corner Office, March 22, 2009 (BB)
Get a Diploma, but Then Get a Passport NYTimes, Corner Office, August 1, 2010 (BB)
Questions:
1. How would you evaluate the actions Dimon has taken since becoming CEO? What is he trying
to accomplish in addition to learning about the situation? What signals is he sending to the
organization? What are the most important problems he is facing upon his arrival? What plan
of action would you recommend?
Session # 9: Textbook:
The Stabilization Stage: Chapter 20, Pages 299-335
The Return-to-Growth Stage: Chapter 21, Pages 337-361
Financial Management; Operations Management; Marketing Management in the Stabilization and
Return-to-Growth Stages
Readings:
Nissan Motor Co., Ltd., 2002 by Michael Yoshino and Masako Egawa
At Ford, Turnaround Is Job One by James B. Shein
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Strategic Transformation as the Essential Last Step in the Process of Business Turnaround by John A.
Pearce II and D. Keith Robbins
The Driver in Ford’s Amazing Race by Nancy F. Koehn (BB)
Ford’s Mr. Inside, in Sight of the Crown by Bill Vlasic (BB)
Why Companies Fail by Megan Mc Ardle (BB)
Level 5 Leadership- The Triumph of Humility and Fierce Resolve by Jim Collins
The Higher Ambition Leader by Nathaniel Foote, Russell Eisenstat, and Tobias Fredberg
Feedback in Heaping Helpings NYTimes, Corner Office, March 29, 2009 (BB)
Managing Globally, and Locally NYTimes, Corner Office, December 13, 2009 (BB)
Remember to Thank Your Star Players NYTimes, Corner Office, July 11, 2010 (BB)
Want to Lead? Learn to Nurture Your Butterflies NYTimes, Corner Office, November 19, 2011 (BB)
Never Swerve When Driving the Bus NYTimes, Corner Office, May 5, 2012 (BB)
Questions:
1. What were the circumstances upon Ghosn’s arrival? Why have his efforts succeeded when
other restructuring efforts before had failed to be sustained? What were the key drivers of
success in the turnaround? How did cultural and ownership circumstances affect his strategy?
What were the implications on value creation?
2. Compare and contrast the turnaround efforts at Ford with those at Nissan. What were the
internal/external reasons for decline? Could the companies cut their way to a turnaround?
Why did previous efforts in both cases fail and these efforts lead to success?
3. When is a strategic transformation critical to a turnaround and what are its elements?
4. From the last four sessions, what are the leadership lessons that are most applicable to
turnarounds and why? What are the key strategic, financial and operational elements to
assure institutionalization of the elements of a turnaround? What leadership characteristics
are important in providing for the enduring value created in a turnaround?
Session # 10:
Takeover Vulnerability
Readings:
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PRG-Schultz International by Paul W. Marshall and James Weber
Blockbuster’s Former CEO on Sparring With an Activist Shareholder by John Antioco
Turnaround Management Every Day by John O. Whitney
Netflix Looks Back on Its Near-Death Spiral by James B. Stewart, NYTimes, April 26, 2013 (BB)
What’s Luck Got to Do With It? By Jim Collins and Morten T. Hansen, NYTimes, October 29, 2011 (BB)
Distilling the Wisdom of CEO’s by Adam Bryant, NYTimes, April 16, 2011 (BB)
On A Busy Road, A Company Needs Guardrails, NYTimes, Corner Office, October 13, 2012 (BB)
Fred Hassan of Bausch & Lomb, on Managers as Ambassadors NYTimes, Corner Office, July 27, 2013
(BB)
Questions:
1. In PRG-Schultz, how did the company get into this dire a situation? Assess Mc Curry’s first
eight weeks on the job, both his positive and negative actions. What should he do now? Six
months from now?
2. What circumstances created vulnerability for Blockbuster and how could they have been
countered?
Session # 11 and # 12:
Team Presentation and Course Recap
Additional Readings (not required):
The Opposable Mind by Roger Martin
The Innovator’s Dilemma- When New Technologies Cause Great Firms to Fail by Clayton M.
Christensen
Journey to the Emerald City by Roger Connors and Tom Smith
Corporate Financial Distress and Bankruptcy by Edward I. Altman and Edith Hotchkiss
Team of Rivals by Doris Kearns Goodwin
The Servant as Leader by Robert K. Greenleaf
The Outsiders by William N. Thorndike, Jr.
Great by Choice by James C. Collins and Morten T. Hansen
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