Can You Lead a Turnaround?
Could you run a company if the serious threat of bankruptcy were looming? C’mon, it’s much easier for a leader to run a company when business is bright and rosy…but you need to be a leader who can face reality, jump into an unexpected firestorm, and rescue your company from market obliteration. A leader like that is the one who should sit in the big office. Young Jon Vrabely is such a leader.
In 2005, Jon Vrabley was one of several vice presidents at Huttig Building Products, headquartered in St. Louis, Missouri. Their revenue was topping $1 billion as they enjoyed serving what seemed to be an endless supply of new housing starts.
But as you know, in 2006, the mortgage crisis caused the bottom to fall out of the U.S. housing market; making Huttig a direct casualty. Huttig’s revenues went from $1.1 billion to about half that. A worried board of directors floated a lot of luke-warm ideas. Vrabely was the only one with the courage to tell his senior leaders, “Huttig’s current strategy will kill this 125 year old company.” He backed up his claim with a step-by-step plan to turn it around. The board was so blown away by his bold approach (and careful research) that they immediately replaced their long-time CEO with the 41-year old Jon Vrabely.
As the housing market continued to plummet, Vrabely had no fear about systematically terminating old strategies. He wrote off two projects that represented a $16.1 million dollar investment because they were draining cash. He closed 18 of their 45 distribution centers. His toughest duty was letting go nearly half of the workforce, many of whom were his friends. Said Vrabely, “I was not going to see this legacy company go under on my watch.”
Yet, while he was cutting costs at Huttig, Vrabely also knew his competitors were hurting. So, Huttig aggressively went after his competitor’s best talent, their product lines, and even bought struggling competitors at deep discounts.
It’s been a long, slow road back. But since 2012, Huttig has added back approximately 200 people, sales have risen 8.1%, and the company is generating positive earnings.
Jon Vrabely is the model of a leader who was brave enough to face reality – defy conventional wisdom – and risked his own career by insisting his board of directors listen to the dire truth. Bravo to you, Jon! It’s time for you to get a bigger office.
Ross Shafer is the co-author of the new book, ABSOLUTELY NECESSARY – Bulletproof Tactics for Putting Yourself in High Demand. He is also the author of Nobody Moved Your Cheese, Are You Relevant, Grab More Market Share, and The Customer Shouts Back. Ross is a busy keynote speaker, author, and Emmy winner for his work as a comedian, talk show host, and writer. www.RossShafer.com
Filed in: Relevant Report
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