2009 Annual Convention
“When Flat is the New Up: Turnarounds in a Troubled World”
October 7-9
J.W. Marriott Desert Ridge, Phoenix, AZ

For more information, visit:  www.turnaround.org

Among other things, he told me that this year he has had three times as many clients but collected only half as much money as he has in other years…..

My thought for this week:  Every time I read in the business news that “Revenues are up,” I ask myself, what about profits?  Are they up or down?

Recently, when I explained to one that I have been receiving too many calls to be able to meet with everyone, he told me that one of my competitors is charging $300 per hour to people who want to meet with him for such purposes.

It’s a question I’ll be thinking about and writing about–but probably not for a while because I just started a new Interim CEO engagement and will be extremely busy for a while…..

To be successful, all companies need the essentials:

• A capable leader
• A carefully conceived plan
• A system for ensuring accountability

When these pieces are missing, a joining of two financially and operationally troubled companies is destined to fail.

An example from one of my clients:

• Company A was in an FDA-regulated industry
• The industry was experiencing both intense pricing pressure and consolidation.
• Company A, with multiple manufacturing and distribution facilities, was not only losing money but was also experiencing both product contamination and delivery problems.
• Company A, which was bleeding cash, bought Company B, which was also bleeding cash.
• Neither company had any of the three essentials listed above.
• After the acquisition, the expected “economies of scale” did not materialize; costs for the combined entity actually increased as a percent of revenues.
• The already stressed delivery system was now even more stressed.
• Expected  revenues did not materialize because frustrated customers switched to other suppliers.
• Chaos ensued.

We were able to save the company, but it was a close call…..a very close call…..

Two wrongs don’t make a right, and two sick companies do not make a healthy one.

The quality of the  emails most candidates sent was appalling.  Based upon what arrived in my inbox, here is my advice to those looking for work:

1. Read the job announcement. If you send a lengthy email in response to an ad that includes the word “turnaround”, you should  assume you will not be considered.  Turnaround experts are looking for people who can cut to the chase and won’t waste their time.
2. Use bullets not paragraphs. Time is money. Cash is king.  Make my life E-A-S-Y.  I am getting hundreds of emails a day.  Which emails do you think I am likely to read? Those with 5 lengthy paragraphs or those with 5 concise bullets?
3. Make sure that the file name of your resume includes your name. If your resume does not have your name in the file name, you are out-of-the-running with me because I have to take time–my time–to change the file name before I save it.  Please, make my life E-A-S-Y.
4. Don’t be a pest. If the job announcement says “send email to,” please don’t call.  If you do, it appears that you have no respect for my time.

Renee’s Rule™: Think before you respond. If you were in my shoes, what would you want to know?

• What has the applicant DONE?
• What is he/she LIKE?
  • Will he/she be able to work in a highly charged, fast-paced environment?
  • Will he/she be the kind of employee who anticipates what his/her supervisor needs?  who will make my life E-A-S-Y?

Renee’s Rule™: Make my life E-A-S-Y!

I have also, however, seen some CPA’s do some really appalling things; e.g.,

• Providing inappropriate advice  ( When I arrived at my very first client, the company was on credit hold or COD with all vendors, bleeding cash, and faced with a threatened shut-down by the IRS.  The CPA, blissfully unaware of the severity of the problems, was billing the customer for business planning assistance.)

• Being unwilling to recommend a change of CFO when that CFO was clearly unqualified  (I’ve seen this multiple times and don’t know whether this happened because the CPAs did not realize the failings of the CFOs or because the CPAs did not want to risk losing their clients.)

• Recommending consultants based on industry or turnaround “experience” rather than on RESULTS   (For the dangers related to this, please visit my post, THE EXPERIENCE FALLACY.)

• Giving false assurances  (Several years ago, I had as a  client a third-generation family-owned business.  The company had experienced increasing losses for three years straight.  The CPA had told the elderly majority shareholders, “Everything will be all right.”  When I arrived, however, the company was at Death’s Door.   The company survived, but it was  an extremely difficult situation.  We had to implement an out-of-court Chapter 11.)

• Preparing unrealistic financial projections because the CPA did not understand the business

It is really important that CPA’s–and other professional advisors–know what they don’t know.

There seems to be widespread recognition that being nice is an important part of customer service, but the other piece–making things easy for customers–has somehow been lost in translation.  Personally,  what this customer wants/needs is for the companies I deal with to make life really EASY for me.  What do you want/need?

As you may have guessed, this post is the result of a my experiencing a  spate of bad (abysmal) customer service over the last few weeks.  Everyone is NICE; nothing gets DONE--or gets done only with much wasting of time…..I know that you, too,  have “been there; done that;” e.g.,

1. You are required to enter your phone number to get to tech support, but the first thing the person asks is, “May I have your phone number?”
2. You call for repair help.  You provide a description of your problem in infinite detail, but the details somehow do not survive the distance between customer service and the people who actually do the repair work, and it takes forever to get the problem solved.

I understand that many of the  companies we call could not care less about whether they are wasting our time…but do they have so many customers, and are they making so much money that they don’t want to improve their bottom lines by streamlining their customer service?   Think of all the personnel time and $ that would be saved if no one had to ask, “May I have your telephone number?” or if the technical person “on-the-ground” received enough detail from customer service to solve the problem on the first try.

Enough complaining for one day–you can tell I’ve had too much TERRIBLE customer service from too many NICE people….It may be time for a new Renee’s Rule™: Enough is enough!”

In future posts, I’ll share some examples from my personal experience about how companies can reduce costs AND provide better customer service.

1. Renee’s Rule™: Don’t sell to customers who won’t pay.
2. Prepare worst-cast cash projections for each of the coming 6 months; if necessary, take action now to prevent a meltdown.
3. Solicit ideas from employees and advisors; implement those that will have the greatest impact in the shortest time.
4. Implement changes to company processes that will lower costs and improve customer service.
5. Renee’s Rule™:  If you think you may need help, you probably do.
6. Renee’s Rule™: The sooner, the better.