HOW NOT TO MANAGE A TURN-ROUND - RENTOKIL.

Rentokil-Initial has been eviscerated by its previous management, aided and abetted by an investment industry greedy for excessive and short-term returns. For a description of the mess created by the chase to exceed profit growth exceeding 20% year-on-year, year-after-year, turn to Rentokil - a tale of our times in this site.
Suffice it to say that a remorseless regime of underinvestment, staff exploitation, neglect of customers' needs and poor management of the Rentokil/BET merger has left the company in a sorry state.

The current management seem to be concerned to start rebuilding the weakened company - a worthwhile task, as Rentokil probably still has sufficient UK and international market positions to build on. However, the task of rebuilding is going to take a long time - the remnants of the previous regime and its oppressive habits will need to be winkled out, staff trust and morale will need to be rebuilt, new skills and values instilled. A massive programme of customer service improvement will be needed, together with building processes and systems for generating appropriate information to serve the front line and corporate management - as it is likely that a regime that was only interested in year-on-year profit didn't know much about the underlying drivers of long-term value.

In a sane world, it is likely that management would be encouraged to dedicate its full attentions to the long-term task - we would estimate that it should take 3-5 years to start to generate sustainable improvement.
Is this happening? So far, not so good......
 First, Sir Gerry Robinson weighed in with a bid to take management control of the company, with a hugely leveraged package, amounting to over £70 million. His bid was backed by some investors, but not by others, so a messy battle ensued. The press doesn't think that Sir Gerry has anything very constructive to offer, for example: By "waiting until the last minute before telling the Takeover Panel that he wouldn't be bidding for Rentokil", Sir Gerry Robinson "merely prolonged the uncertainty for the company he professed to want to help". Others have questioned his record of value creation in his former company, which seems to have destroyed value through the Grenada-Forte merger. Certainly it is questionable whether Sir Gerry, who not so long ago firmly announced the end of his full-time career, envisaged the long haul detailed and intricate job that the recovery plan undoubtedly needs.
 Second, Mr Flynn, the Rentokil CEO has recently reported that he is being forced to spend half of his available time explaining what he is trying to do to the investment industry, which by and large, wouldn't recognise a well-managed turn-round from a turnip.

So - how not to motivate top management engaged in a hugely challenging and complex task - hang the Sword of Damocles of a hostile takeover over their heads, and insist that they spend a large part of their of time talking to fund managers, whose main interest lies not in the company's longer-term success, but in how to gamble on the short-term prospects of the share price.

There seem to be two completely different worlds running in parallel - one a macabre high ego, high stakes gambling game using companies and their employees as the chips; contrasted with the real world where people work to serve the needs of customers and generate genuine value
In a sensible world, managers would feel capable of telling the speculators to bugger off, but that can only happen after they retire, and then it is usually too late!