May 2nd, 2008
This week I went to hear Greg Brenneman, HBS Class of ’86, who came to speak at HBS. Since I took digital notes anyway, I thought I’d just post them (so it’s not that I’m sitting here writing posts a day before my finance final exam…).
Some background – Mr. Brenneman is currently CEO of TurnWorks, a private equity firm specialized in turning around troubled firms, and president and CEO of Quiznos Sub (sister – this one’s for you :)). He’s also on the board of Home Depot. You could say he specializes in turning around distressed companies – he was the CEO of PwC Consulting, CEO of Burger King and President & COO of Continental Airlines and helped “reviving” them.
I first read about him in the book From Worst to First: Behind the Scenes of Continental’s Remarkable Comeback, by Gordon Bethune. Quick sidetrack – I haven’t read the entire book yet, but it’s really good. Gordon Bethune was the CEO of Continental at the time of the ’94 turnaround, and is a very compelling storyteller, if not the most modest one (just look at his photo on the book cover…). Greg Brenneman was the President and COO of Continental during that time and devised its strategic plan together with Bethune. It’s funny, in the book Bethune seems very enthusiastic about Brenneman, and pretty much describes them as equal partners in the success of the turnaround. During in his talk at HBS, on the other hand, Brenneman hardly mentioned Bethune while talking about Continental…
(note – everything here is naturally based on my memory and my understanding of Brenneman’s talk, and should not be regarded as the Absolute Truth… my English isn’t very good anyway, as you know)
In his talk Brenneman shared with us a lot of funny war stories (Morak…) about all the companies he heroically saved, as well as some “life lessons”. Here are some interesting points:
- Turnaround is like a constant HBS Cold Call. You need to find out quickly what are the value drivers (levers) to pull. I think that what you’re learning at HBS is critical – you have to be able to analyze situations quickly.
- After analyzing have a 1-page plan consisting of: product plan, financial plan, people plan and marketing plan. Focus on a few key objectives.
- Communicate, Communicate, Communicate. You get tired of telling the same stories all the time, but you have to do it. I had the “Friday Voice Mail” – 7-10 minutes message to all employees about what’s been done for the past week.
- Treat everybody with dignity and respect. Wipe out angry emails, they don’t do any good.
- Related to that, I often gave equity / profit sharing to all employees in the companies I managed. Creating incentives that align everyone is important.
- People who brought the company into trouble are almost never the people who’ll save it. That’s why I usually fire the majority of the existing management. In turnarounds time is often scarce so you don’t have time to coach people until they get better. I find new people to replace them through my network.
- Related to that, my biggest mistake may be not getting rid of people fast enough – especially people I brought in and thought that if I’d work with them a bit longer they would improve, but it doesn’t work like that.
- My biggest learning is that you work with people. I mellowed down over the years, running over less people.
- Always try to leave a team better than you when you leave. First thing I do is try to find out who’s going to run the place when I leave.
- Give the team the credit. Give the credit to someone else, not to you – people know anyway you’re doing a good job.
- Focus on your family, friends and whatever other interests you have. Continue thinking about how to give back to community.
- I always work in partnership – I’m afraid of people who are CEO, President and Chairman at the same time. I learn from other people.
My thoughts: Brenneman definitely seems like an extremely competent business leader. He also seemed honest and fair with regards to the people he had worked with. However it was a bit scary at times to see him broadly smiling when he was telling us about firing 90% of the management of the company and half the employees to achieve cost reduction and to turn the company around. Don’t think I would have been happy to do this kind of work, even if it involves making tons of money and knowing all the important people.