11 ways to save Detroit ... before it's too late

March 22, 2013: 5:00 AM ET

Motor City's newly appointed emergency financial manager has one tough job saving the city from financial oblivion. Here's what he should do.

By Doron Levin

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FORTUNE -- Kevyn Orr, Detroit's newly appointed emergency financial manager, has a lonely, thankless job in saving the Motor City from financial oblivion. The former Jones Day bankruptcy attorney bravely described his mission as the "Olympics of restructuring," but there will be no medals or endorsement deals if he succeeds.

Steve Miller, the chairman of AIG (AIG) and a veteran of numerous corporate restructurings, knows something about thankless jobs. He accepted a $1 annual salary as chief executive of Delphi, took the company into bankruptcy when compromise failed and then was vilified by the United Auto Workers union. Miller, who in 2008 authored The Turnaround Kid: What I Learned Rescuing America's Most Troubled Companies, offered Orr some sage advice as he begins his work:

1. Beware of generalities based on your prior experience. Every situation has its own dynamics, so no cookbook approach can work. You will need to adapt and be creative.

2. Focus on how to get Detroit out of the ditch, not how the city got into the ditch. A new leader in a distress situation has a huge advantage in not having to defend prior actions and how the problem came about. Avoid trying to assign blame; it doesn't help.

3. Before acting, spend the first month to meet one-on-one with every stakeholder group. Hear them out. You will have to make tough choices, and no one will be completely happy with the outcome. But they will be angrier if decisions are made without their being heard.

4. After a month, make critical decisions. The problems have been building and have been debated for years. No more dithering. You are the new leader to whom everyone is looking for direction. Get the train moving.

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5. Don't assume that the people are bad just because the situation is bad. Most organizations have good people with good intentions and ideas, but they have been trapped by ineffective organization. With good new direction, they can accomplish miracles.

6. Streamline the organization. Most troubled situations have become heavily bureaucratic, with too many layers of decision-making. Give clear authority to people who can handle it.

7. Be accessible. Eat in the cafeteria, not the fancy restaurants. Sit down with random groups of employees and find out what they think. You'll learn a lot that gets filtered out in the normal channels.

8. Give out your email address. Answer the emails yourself. Yes, you will get some hate mail, but people will be amazed you actually read their input.

9. Decide what your top three long-term priorities are. Make sure your detailed day-to-day decisions are aligned with those over-arching priorities.

10. Be patient. Every turnaround takes twice as long and is twice as complicated as anyone can imagine at the beginning.

11. Be thick-skinned. The problem cannot be solved without disappointment to stakeholders. You will be blamed and called names that will hurt. Rise above it, and keep your eye on the necessary solutions.

Miller might have added a twelfth piece of advice: Be careful of that first step out of the starting blocks, it can be tricky. The Detroit News recently reported that Orr and his wife were subject to liens on their home in Maryland for unpaid taxes -- not a great example to set for a city that's had trouble collecting taxes from its citizens. Orr said he was embarrassed and that he was paying the taxes immediately.

It's only fitting, given recent events in Rome, that Orr be reminded he'll have to be holier than the pope, at least in the area of financial probity.

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