Suggestion for the NYRA board: Immediately quit interviewing CEO contenders. The kind of CEO you really need now is almost certainly not in your pool of candidates.
In the fall of 2012, the state of New York took over the New York Racing Association and reorganized the board of directors. NYRA has had a litany of well-publicized and often embarrassing problems, which prompted Governor Andrew Cuomo to take the action he did.
For approximately the past six weeks, the reconstituted NYRA board has been screening candidates for chief executive officer. The strongly held view here is that the board should abort this search. Instead, seek out an interim (for several years) turnaround manager to address the NYRA mess and put it on a path to success before retaining a CEO for the longer term. My perspective derives from long experience in both researching/studying corporate turnarounds as a business-school professor and, more importantly, having actually worked as part of a turnaround team brought into a nearly bankrupt publicly traded company by the board of directors, which I eventually joined.
The successful turnaround managers I’ve known have a procedure they initiate when they arrive in a troubled company and many of the decisions and actions they take are highly unpopular (the steps in the procedure are beyond the scope of this article). One such CEO told me he had his house shot at and his children went to school and back with a security guard.
Similarly, the new CEO of NYRA, if he or she is capable and willful in doing what is necessary, will offend plenty of people with vested interests in one position or another. Since NYRA is a political entity, this is certain to provoke complaints to the governor, legislators, and the NYRA board. (In contrast to NYRA’s many constituencies, a private or public company in a turnaround mode mainly has to please just the board of directors, the largest shareholders, and often the biggest creditors.)
One type of CEO personality and skill set is best suited for circumstances in which the executive can build the organization by, for example, innovating and improving market share. Another type of CEO is a wartime general, the individual who thrives in a difficult environment wherein the company is under attack. He or she makes the arduous decisions needed to turn around the organization in spite of the chorus of criticism that ensues.
The turnaround CEO knows that his or her time in the company will be short, several years at most. At that time, the company will either sink or swim.
At the present time, NYRA needs a skilled and thick-skinned turnaround CEO, who would bring in his or her own proven team of specialists, to get NYRA on a solid foundation and position the organization for a successful future, regardless of the vitriol sure to come from folks whose oxen get gored. The NYRA board would have to back this individual to the hilt.
Once the NYRA ship was righted, the turnaround group would go onto another crisis and a captain for calmer seas would be brought aboard.
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