A CEO's Worst Day

Imagine for a moment that you are a successful CEO of a manufacturing company.? You’ve built it from the ground up, for over 25 years.? You’ve seen everything, long expansion periods, the great recession, product successes, product failures, changing regulation, rising healthcare costs, great years, down years, and everything in between.? You have never seen a problem you can’t handle in those 25 years, but today will bring an end to all that.

To you, everything seems normal this morning.? You get up and make your morning coffee, setting the tone for the day as it has every morning.? You go through your same routine before heading into work, as you have thousands of times before.? You think proudly about this business that you’ve poured your sweat into, to build, to grow, to employ, to lead it to the next phase, always up to the next challenge.? You recall how you’ve been able to outperform all the headwinds, all the trials and tribulations, all the challenges of all the years in building your business, your life dream.

You had no idea that your latest product offering would fail.? You had no idea that all this inventory sitting in the warehouse could cause such problems.? “Just another typical challenge, we’ll get past this,” you think to yourself.? You had no idea that borrowing on your business lines of credit to pay for all this stuff, as you always have, would yield such a profoundly different outcome this time.? “We’ve had challenges before.? We’ve struggled to make payroll before, just like in the early days when we had to scratch & claw and pinch every penny to make these great ideas come to fruition.” ?But something is eerily different this time.

A few weeks ago, you received an unusual letter from your bank, something called a “Reservation of Rights” letter.? You’ve never seen a letter like this, you were not quite sure what to make of it.? Your banker still seems nice, personable and approachable, yet the wording in this letter seems to fly in stark contrast to that.? Now, three weeks later, you’re operating your business under something called a “Forbearance”, and today you’re headed into the office and about to find out what happens next.

At the office, you’re greeted by a man you’ve never met before.? Tall, well-dressed, bespectacled, old-school briefcase in hand, he smiles as you walk in, shakes your hand, and introduces himself.? To him, he’s your new “advisor”.? To you, he’s a nightmare come true.? Not because he’s a particularly unfriendly or unappealing person – certainly not that.? But what he represents – he’s a symbol because he represents the first time you’ve ever been told you need help from someone other than yourself or those you’ve hired.? He was brought in at the “request” of your bank.? Meet your new turnaround advisor, soon to be your Chief Restructuring Officer.

“Why now?”, you ask yourself.? Why me?? And more importantly, why him?? Business is supposed to be an emotionless, rational, decision-making system.? But you feel this one, deep inside, to your very core.? Fear, anxiety, nervousness, everything unpleasant to say the least, is what you experience today.? “Didn’t this used to be my company?”, you ask yourself.

The turnaround industry is a very real thing.? Many businesspeople are completely unaware of its existence, or understandably choose to keep it behind the curtain of their professional minds as they run their businesses day to day, never thinking that any set of circumstances could lead to a scenario such as this.? The turnaround professional comes in all shapes, sizes, genders, specialties and personal experiences.? They are a highly skilled type of specialist, like a neurosurgeon as compared to a family doctor.?? They are fast, unmistakably intelligent, intuitive, and with a keen business acumen and a unique stomach for intensity.? These are people with rare gifts, they’re the calm ones in the middle of the hurricane, the natural leaders who bear a mix of resourcefulness, fearlessness, and urgency that many of us would envy in crisis.

The life of a turnaround professional is a hard one.? Some accrue millions of airline miles, spend 40 weeks a year on the road away from their families, and grind out 14 hour days at someone else’s office far away from home.? ?The nightcap turns into late-night hotel video conferences with their kids in a different time zone.? All of this, in a desperate race to rescue companies they just learned about, to save the jobs of hundreds or even thousands of people they’ve never met, and to preserve corporate value when the ground is crumbling beneath.?

Turnaround pros are all around us, invisible during the good times, but energetically springing into action whenever called upon – almost always on the worst day in the life of their new client.? Every day of their professional lives they use words we all know but with a far different meaning.? Words like “receiver” without reference to football, “ABC” without reference to kindergarten, and “chapter” without reference to any book.?

They deal with the toughest problems of business, the life & death conundrum of a struggling enterprise, the Titanic an hour after the iceberg.? “Can I save this company, and if so, how?”, is their daily life.? Without these highly skilled turnaround professionals, GM might not have been able to save 1.2 million jobs in 2013, and Marvel might not have been able to recover from being a bankrupt comic book company in the 90’s, to a $4B Disney acquisition in 2009.

In this column, we will pay homage to the much maligned yet most important & ignored aspect of business, the turnaround.? I would guess that the turnaround has been around as long as there has been trade.? But the science of the turnaround, and the tools in the turnaround utility belt, have evolved with the progression of modern business law and technology.? We will bring to center-stage the true stories of battle – not against a mortal enemy, but rather against the enemies of a failing business – time, traditional thinking, and ego.? We will lament the failures of those ships that cannot bear the weight of the water after the iceberg, but we will also rejoice the triumphs of those that though extraordinary effort, determination, and collaboration, find their way atop the buoyant calmness of the waves once again.