Anyone have a good learning resource on transition culture at a distressed company post-acquisition?
Feeling pretty good about a distressed co. we just picked up but the culture is seriously fucked because the last owner was not running off a real management structure.
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Step #1 - Make sure you have a REALLY GOOD PLAN and muster your courage. Understand that you need to break some eggs to make this omelet. Step #2 - Conspicuously clean break and bathrooms, show respect for the workers Step #3 - Fire an executive and let everyone know there is a new sheriff in town. Don't chicken out, this is critical. Let it be known publicly that Joe wasn't carrying his weight and there's a new standard that we all need to hold ourselves tol. Fire anyone else dragging ass, the more entrenched, the more valuable their head. Step #4 - Give the speech; Change is here, take advantage of it or it will take advantage of you. Step #5 - Double the speed and intensity, start meetings 2 minutes early and lock the door exactly at start time. Come early, stay late, dig deep into every corner of the building. Get everyone off kilter, imbalanced, seeking direction and routine. Step #6 - Drive process and accountability, Let that be the new direction and routine Step #7 - LEAD by example. Raise prices on customers in front of your team, slash costs with your vendors in front of your team, squeeze everything, kick ass, take no shit, demand results.
Step #8 - Identify your stars and love them. They want to succeed, they want the challenge, they want to run up a hill for you. You need to give them a piece of your soul and you'll have their devotion for years.
Be a leader - not a manager.
Good luck. Everything I said above is harsh but it works. That simple formula can make a dead company worth tens or hundreds of millions in 2 years.
I think I love you. Thanks, always on point with the distressed deals. Already doing most of that btw, anywhere specific or a particular book you like on turnarounds/distressed?
Shittiest thing I've found so far with two of the distressed deals I've done is just how much more stressful it is than a normal company. Sounds obvious but good Lord there's always some random bullshit issue dragging down that precious ebitdaddy
Anyone else want to go lift weights after reading that?
let your senior management (that you are probably hiring fresh) dictate the specific culture. The culture described above won’t work in every company. You need discipline but that comes in many forms. Clean bathrooms are a cute idea but ultimately meaningless. We don’t fire “an” executive to make a show, we’ll fire as many as me ne
It’s easier to change people than to change a person
better to cut too deeply at first and have to bulk up than to keep too much dead weight / culture sucks around
it will take about twice as long as you expect which is why moving quickly is so important
Lots of books tangentially hit this but none directly. Here are some; - Corporate Turnaround by Bibeault - Execution by Bossidy The next 3 from memory, have not read in a long time; - Take No Prisoners by Davis - Turnaround by Davis - Taking Charge by Whitney
Other than attitude my #2 tool is a daily and a weekly dashboard. Weekly I try to see the whole process; RFQs > Quotes in backlog> Quotes released > New orders > Orders in Engineering > Released from engineering > Raw > WIP > FG > shipments > AR > Ending backlog > next weeks scheduled shipments > Direct hours > indirect hours > Ontime metric > quality metric > returns > etc. You're trying to monitor flow from one end to the other and there will always be bottlenecks. This reporting points to trouble before you get there and allows you to hone straight in on the problem. "What was the bottleneck in Engineering last week and why didn't direct labor fall to reflect that delay?"
Also, I remember liking The Turnaround Kid by Steve Miller. Maybe some management/culture change there.
Good luck
You actually get that operationally involved in your portfolio cos that you are questioning their weekly process flow?
In a word; Yes. Because if it fcks up, I'm responsible to fix it. A 3-week backup in, say, engineering will kill a month, kill a qtr, start draining working capital, upset customers and strengthen our competitors. The reporting is more trip-wires so I (and my team) can manage by exception when anything starts going sideways, and not be lulled into the 'everything seems good enough' mindset.
And truth be told.... - Do I fixate over this stuff? No.
- Do I let execs at each company think I do? Yes.