- 27 years engaged in hands-on problem solving to help companies assess options for improvement, develop realistic business models and turn around unprofitable operations.
- Lind Consulting clients have included: Vinfolio, Master Replicas, El Camino Surgery Center, Shamrock Materials, Panamax, and Coit Services.
- As Managing Director of Regent Pacific Management Corporation, clients included: Scientific Micro Systems, Supermac Technologies, Uniquest, Daisy Cadnetix, Kraftmart, Prudential Bache, Chartpak and Clearprint.
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Company Turnarounds - Paths Forward and Out of Trouble
- Companies carry too much debt for their level of revenue.
Leverage can be very effective to increase returns on equity. However, many companies take on debt assuming that their revenue will continue to grow unchecked. When industries or individual companies hit a bump, the debt level is suddenly too large for the adjusted size of the business. Before taking on new financing, a company should stress-test its business to determine whether it could remain in compliance of debt covenants during a cyclical downturn.
- As companies grow, they can grow beyond the experience of their management teams.
Many management teams are very effective during the startup phase. But when the business scales to a certain size and level of maturity, the company outstrips management's bandwidth and abilities.
A related problem is that management becomes very busy as the business becomes more successful. Managers no longer have the time to research best practices. They don't know that the problems they need to solve have been solved by other organizations many times before. They try to reinvent the wheel rather than taking the time to solve common management problems that many other companies have already solved. Also, in periods of stress, managers often revert back to their older ways. They continue to behave as if they were facing yesterday's problems rather than today's.
- Employees in a troubled company often become overwhelmed, which aids and abets the downward spiral.
When a company is facing a turnaround it is already in a difficult situation. But now all of a sudden its bank or vendors place additional demands on the management team. Some management teams become paralyzed. When this occurs, an independent voice from outside of the organization is sometimes required to give the team some clarity and to help it find direction.
- Employees sense trouble and start to abandon ship.
Employees almost always know when something negative is affecting the company as a whole. They need to understand that management has a turnaround plan. They need clear communication as to what the plan is and their role in it. They need a management team that models confidence and demonstrates that management counts on each employee to help with the portion of the plan that affects his or her job or department.
This requires managers who are capable of encouraging and inspiring the workforce. A turnaround is stressful, and typically management calls on the wider organization to work harder, under difficult circumstances. Management needs to be in tune with employees, to figure out who’s reaching burnout or who needs some additional assistance.
Otherwise, key talent may leave the company and then it can easily become a case of rats deserting a sinking ship. Once the hemorrhaging begins it can be hard to stop.