Turnarounds in sick companies must begin with a change in their culture. An acceptance of change across the organisation is a pre-requisite for building capabilities required to be successful in a competitive world.

Changing the culture of a company is never easy. it can be excruciatingly slow, especially in sick companies where adversities have not only dulled the ability of the management to come up with new ideas, but also severely limited its ability to take any kind of risk, no matter how small.

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Changing the people at the top is the first step towards changing the culture of an organisation. But the new CEO should remember that he and his team have the responsibility to act as role models for others in the organisation. Role models derive respect not from their positions but from hard work, commitment to the organisation, and their ability to turn the company around by leading from the front.

The problem facing the new CEO is that employees expect him or her to be a role model from the very first day, well before he or she has had the opportunity to analyse the problems ailing the sick company and prepare a plan for change. The new CEO, then has to follow his instincts initially and depend on a few tried and tested tools of cultural change.

First, he should try changing the portfolios of existing managers depending on their areas of expertise. Interactions with senior people in the organisation will provide the CEO with some insight into senior execs' areas of expertise.

That apart, such interaction may provide him with an insightful take on existing problems. For example, the hr head will believe that shop-floor productivity will improve if the workforce is treated more firmly, something the present manufacturing head is unable to do. The manufacturing head may believe that inefficient procurement processes are at the core of productivity-related issues. Asking the hr head to take charge of manufacturing, and the manufacturing head to take responsibility for procurement are two change options that become available to the CEO in such a situation.

Communication is another very important change agent in a sick company. In small companies, communication is possible through team-meetings and group discussions. Larger companies may require newsletters, video presentations, and other mass communication devices. As to the content of the communication, it is best to make everyone aware of the reasons for the company's poor performance.

An analysis of the competitors' balance sheets will help the management understand exactly where the company went wrong and pass the information down the ranks.

Such communication down the line has a number of benefits, beginning with each employee understanding how his own productivity has a direct bearing on the company's future health and generating suggestions as to how these problems can be rectified. That apart, it will also drive home the fact there are competitors who will take away whatever marketshare the company still has unless changes happen quickly.

Another tool for change is making a comparative assessment of the company's products. The sooner employees realise that the consumer has an option to take his custom away, the better. The new CEO needs to make people realise that it is the customer who pays their salaries, and that unless the company gets some of its customers back, its future will remain bleak.

Finally, the most important change agent in a sick company is training, the overall development of its employees. Unless the levels of skill and knowledge in a sick company improve, no positive change is likely to happen.