Of Course … The Tragic Mistake – Part One: Diagnosis

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Within the company I was analyzing I found a complete lack of performance metrics, an absence of a review process for business plans, budgets and new initiatives and a culture of assumption that whatever management decided was wise and ‘progressive’. But, when I connected performance to expectations, a totally different pattern emerged. Plans were not executed, objectives were not being met, budgets were treated as irrelevant to daily operations and management’s decisions were proving wrong far more often than right. All of this as not only allowed but facilitated by the principal owner – my investor friend.

I delivered my initial findings during a private session. She took is as well as might be expected given that we were discussing a serious character flaw. My message was ‘you have allowed a permissive culture to develop within the company – nobody is testing the assumptions and you are shielding them from being tested – you need to be has hard on them as your investors were on you.’ It took three stiff drinks (hers) and a good cigar (mine), but she finally accepted the reality of the situation – she had not only allowed it to happen but had facilitated the development of a counterproductive culture within the company. At the end of the session, she asked “OK, how do we fix it?”

Next Part – Designing the Fix

© Dr. Earl R. Smith II

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Related Articles:

• Turnaround Engagement – Part I

• Turnaround Engagement – Part II

• Turnaround Management – Cash Flow

• Turnaround Management – the Income Statement

• Turnaround Management – the Balance Sheet

• Turnaround Management – Initial Steps

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