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Excerpts of Win One for the $hareholders
 Here are seven key thoughts from Win One for the
$hareholders
If you
don’t
know where you’re going, any road will get you there...Lewis
Carroll
My job—which, like Alice’s journey, is
always an
adventure—is to quickly restore the truth and bring an
absolute
sense of reality to the situation at hand. How do I do it? Through a
powerful mix of crisis-management experience, a proven turnaround
model, a precisely crafted plan for the unique situation and a sense of
urgency that creates a straight line from point A to point B and out of
the rabbit hole. My goal, and the new reality of the company, when it
comes out the other side of my process, is restoration of the equity
value for existing shareholders through new profits and the new cash
generated from their once broken and lost company.
All
TUC-kered Out
Professionally,
I
focus on companies that are not yet distressed and that can be saved
from the world of bankruptcy or worse—going out of business.
These companies are what I like to refer to as TUCs
or troubled and under-performing companies. Basically, these are
companies that have lost their way on the corporate
superhighway—with their bottom lines and shareholder value
impacted by the detour—but can still find their way back onto
the
right road. If a company has temporarily lost sight of, but not
abandoned, good business basics, has a supportive Board and dedicated
management team AND a market (both clients and the industry at large)
that is receptive to its products and services, it can often be saved.
70% of
Turnarounds Fail
According
to an
article in the May 2000 edition of Harvard Business Review, 70% of all
corporate turnarounds fail. When you think about the definition of
turnaround, it's probably not surprising so many turnarounds fail. The
definition of a successful turnaround is: A
situation in which a company, which has had poor performance for an
extended period, experiences a positive reversal of performance for an
extended period.
Transforming
an extended period of poor performance into “a positive
reversal
of performance for an extended period” is no easy matter.
But, as
my twenty-year turnaround career has shown, it's not impossible.
Introducing
the Proven Model for Change
The
battle to
achieve a successful turnaround is largely fought before the turnaround
ever begins. The turnaround executive must have a proven model to
create the discipline required to conceptualize the turnaround plan and
ultimately to actualize the plan.
In my
case, the
model has been constructed around years of experience and outcomes that
have made it clear to me which solutions work and which do not solve
the specific problems of a TUC. The model is also a way for the Board
of Directors and shareholders to get a sense of what they are buying
when they entrust their company to a turnaround executive and literally
put the future of the company in his hands.
Transitioning
to Growth and Profitability
If the
reader takes nothing else away from the book, I want the following
statement to be tattooed on his brain: A
TUC needs more than a turnaround to survive long term—even
one
that's been perfectly executed. The TUC must be strengthened across all
of its core competencies—and on its balance
sheet—by a
respectable amount of new capital at some point during the turnaround,
or after the turnaround is complete, to successfully make the
transition to the next stage of growth.
Rising
Out of the Ashes
The
spirit of a
turnaround is a beautiful thing to watch evolve. It is like a phoenix
rising out of the ashes, lifting the spirit of the company and its
employees. It is what gives me my greatest joy when the turnaround is
complete and success is at hand. It is also the fuel for the energy
that takes over within the company after I provide the initial spark
for the turnaround. Developing this new spirit within the management
and employee infrastructure is a critical variable of the overall
turnaround effort. So I watch closely, and if it does not take hold, I
know I am doing something wrong as the CEO of the company and leader of
the turnaround effort.
The
American Way
In
summary, I am
frequently criticized for my strict—almost
religious—adherence to the belief that the Board, management
team
and employees all work for the shareholders and that the shareholders
MUST make money on their risk capital before we share in the fruits of
our labor or equity appreciation in the company. After
all, the fundamental truth of capitalism is that risk capital must be
rewarded, or capitalism will cease to be capitalism because the
investor will stop investing.
Order your copy of Win
One for the $hareholders on Amazon.com.
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Biography
Excerpts of Win One for the $hareholders
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Win
One for the $hareholders
TURNAROUND FACTS
Ed
Whitacre, the newly appointed chairman of bankrupt General Motors,
proved in his turnaround of AT&T—which began in 1993
with the purchase of the company by Southwestern Bell—that
creating growth and new revenues from product development is the key
task in turning around a troubled company. Let's hope GM and the
federal government listen to him.
President Ronald Reagan, my old boss, taught
me
the golden rule of turnarounds when he told me after a cabinet meeting
in 1983, “ Al, you can get a lot more accomplished in life if
you
are willing to let other people take credit for your ideas.”
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