Kellogg News

New courses provide an immersive, analytical look into some of today’s most pressing global business issues.

Senior associate dean to lead business school as search for permanent dean continues

Summit brings together more than 800 alumnae, faculty and students for robust discussion on challenges women face.

Dean Sally Blount ’92 honored Roslyn M. Brock ’99, Ann M. Drake ’84 and Richard H. Lenny ’77

Experiential courses and individualized co-curricular programming provide the launch pad students need to tackle big issues

News & Events

Keynote speaker Diane Swonk, chief economist for Meisrow Financial, said that while the U.S. economy is "gaining momentum," business leaders must understand the complexities driving that momentum.

To the rescue

Top managers and academics at turnaround conference tell how to save a troubled business

By Aubrey Henretty

4/27/2007 - When stepping in to rescue a struggling company, said Steve Miller, executive chairman of Delphi Corp., it is important not to underestimate the local talent: “Companies that have fallen on hard times are not necessarily populated by a bunch of bozos.”

Miller, who has brought such diverse firms as Aetna and Waste Management Inc. out of the red and into the black throughout the past decade, was a keynote speaker at the Kellogg School’s Turnaround Management Conference, titled “Leading Corporate Renewal” and held April 25 at the James L. Allen Center. Organized by students in conjunction with the Larry and Carol Levy Institute for Entrepreneurial Practice, the conference drew a large audience of students, alumni, academics and distinguished leaders to the Allen Center for a full day of speakers, panel discussions and networking.

Miller’s address spanned strategies proven and lessons learned throughout his career. It is crucial, he said, to avoid “leadership gaps” during a company’s restructuring: “A company can quickly fall apart if people sense aimless drift.”

Judith Sprieser ’77, CEO of Transora Inc., said she was excited to see the spirit of collaborative learning alive and well at the conference, where she participated in a morning panel discussion titled, “Skills of Corporate Renewal,” moderated by Kellogg School Senior Austin Fellow and Professor of Management and Strategy Walter Scott. “[The panel] wasn’t all of us giving little speeches,” said Sprieser, who is also a member of Northwestern University’s board of trustees. She added that she enjoyed the lively question-and-answer session following the panel. “The students should be driving the conversations.”

Another morning panel, “Buying a Distressed Business,” focused on strategies for selecting and transforming companies in peril. Moderated by Gordon and Laura Gund Family Professor of Entrepreneurship Steven Rogers, the panel featured participants including Thomas Begel, chairman and principal of TMB industries, Andy Chidester ’95 of investment firm Duff and Phelps, Jeff Bell ’96, president of Concordant Industries, and Suzanne Saxman, a partner at Chicago-based Seyfarth Shaw LLP.

Saxman said that while a turnaround leader should have a strong finance background, “financial expertise alone is never going to be enough. You really need that operational expertise.”

Panelist Bell agreed: “If a company needs sales to turn around, you’d better know exactly the name and phone number and buying plans of every customer.”

According to keynote speaker Diane Swonk, chief economist for Meisrow Financial, sometimes it takes more than operational expertise to drive economic recovery. While the U.S. economy continues to grow, said Swonk, who is a member of advisory committees to the Federal Reserve Board and the Council of Economic Advisers for the White House, it is important to understand the situational forces driving that growth. “There’s not a lot of good news out there helping the economy. It’s just the bad news abating,” she said.

“The U.S. economy has gotten more and more bifurcated,” she added, noting that members of the middle class are perched more precariously than ever and are more likely to slip into a lower class than to ascend to a higher one should their financial situation change. This “enormous restructuring of the middle class” is “creating a lot of turmoil in the retail sector,” she said. Meanwhile, members of the upper class are faring much better, said Swonk, bringing the average numbers up. “You add it all up and the economy is gaining momentum. The question is: How much?”

If the afternoon panel, “Spin Control: Communication and Information Management” — moderated by the Kellogg School’s Earl Dean Howard Distinguished Professor of Political Economy, David Austen-Smith — is any indication, the answer to that question might depend on the person answering it.

Asked to define “spin,” panelist Brenda Adrian, a communications adviser at Los Angeles-based Sitrick & Company, said the word is subjective. “The fact of the matter is that if you don’t tell your story, someone else will … Give them the 1-2-3 of what you’re doing and when you’re going to get back to them,” she said. “You never want to spin the story — you want to state the facts.”

Panelist Jeff Cohen, editor and executive vice president of the Houston Chronicle, was skeptical: “That’s very good spin,” he quipped.

Another panel member, Michael Claes, offered a diplomatic definition: “Sometimes there are PR problems and sometimes there are problems,” said Claes, executive vice president and managing director of PR firm Burson-Marsteller. “The toughest client is the one that has a problem and thinks PR can solve it.”

Even the most elaborate spin couldn’t have fooled United Airlines president and CEO Glenn Tilton — the conference’s final keynote — when he was asked to join the company in 2002. The Sept. 11 terrorist attacks on New York City and Washington, D.C., constituted a PR disaster for an industry already plagued by problems. “I think that in some circles, the conclusion had been reached that the industry would have been far better off without United,” said Tilton, who faced the daunting task of negotiating United’s reconstruction with the two labor unions that together owned 55 percent of the company.

Today, the airline operates thousands of flights each day.

Tilton said that in addition to assessing company and industry problems with clear eyes, turnaround managers should be “enormously self-aware” and “incredibly self-assured.”

He added, “The other thing is: Be well advised.”