CHAPTER 1: LESSONS LEARNED​​​

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The expertise presented in this book comes from a third of a century of hands-on management by the author in countries around the world, turning around and saving scores of companies and divisions within companies, large and small, with essentially every imaginable problem, and in numerous and varied geographies, cultures, jurisdictions, markets and industries.

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It is change-management writ large.

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Examples have been selected to generate a thesis which is disclosed at the end of the book. For instance the next chapter describes the challenge of research and development in a company, the R&D. Over the years I have turned around many technology companies, so there are numerous examples where R&D has been a problem in a company, but one clear example is sufficient to get the point across.

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Nor is each chapter intended to be a complete treatise on the chapter’s subject. For instance the chapter on marketing will not discuss everything about marketing. There are great books that do that. The intention is to show what aspects of marketing were brought to the fore to deal with that case study. To stimulate a renewed interest in marketing.

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Each chapter is nevertheless a complete turnaround case study in itself. A history and a business study of corporate recovery. Each under at times unimaginable stress and pressure. Not just for the company and its people, but for me meeting my promise to save everyone’s jobs. It is a life not for everyone.

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My book describes how a travel services company was saved after its revenues dropped to zero overnight. How one of the world’s most advanced technology companies had to be saved after eleven years and no sales. About a large medical products company was about to collapse because of fraudulent executive behaviour. And how a portfolio of businesses got entangled in complex family dynamics.

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That was another objective of the book, to choose example companies from across the spectrum: large and small, old and new, private and listed on stock exchanges, family businesses, startups, not for profits. Products and services.

My hope is that it demonstrates the universality of the method; convinces the practitioner to do it like this.

Most turnaround books illustrate one significant example, like Lee Iaccoca’s ‘Iacocca: An Autobiography’ or Lou Gerstner’s ‘Who Says Elephants Can’t Dance’. They limit themselves to large, known, visible companies.

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The expertise is my own, it is not an analysis of the work of others, although some comparisons with others have been made during the writing to identify where the personal experience seems to be, or not to be, replicated by others, but especially to identify when something new, something insightful, powerful, something thrilling has been discovered and not previously recorded.

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There will be very little in this book that is found in traditional management texts. That does not mean that traditional references are considered of little value, or that other methods are not useful. Quite the contrary. It is assumed that the reader has a firm grasp of the fundamentals of management a priori; that is essential. All of it is important and that knowledge is taken as a given. But I want to take the reader on a journey much further than those books can. I was intrigued to discover that Lou Gerstner said he did not read management biographies when at IBM. He said he was too busy working on his own company without reading about someone else’s after hours. This obviously worked for him. I read everything I can get my hands on.

 

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Much has been written about starting a new business and the entrepreneurialism associated with it. About the strong day-by-day management required, such as rigorous financial analyses and strong organizational ability, about stressing sales and marketing, appropriately allocating resources, conducting diligent competitor research, having a focused vision. In other words, having a clear business plan.

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Books also abound covering every imaginable facet of good management: corporate helmsmanship, displaying decisiveness, judgement, having charisma, team building, empowering, walking-the-talk, top-down behaviour, open communications, show-by-doing styles, and so on.

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And even in those books exist details about the factors that contribute to company failures, like under-capitalization in smaller companies or poor merger decisions in larger ones, the lack of timely or accurate or complete decision-making data, or putting one's nephews and friends into senior executive roles for example.

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But little has been written about what to do when they actually fail, what exactly to do as a company collapses. Yet nine tenths of all new companies still fail, half of them within three years of creation, and a surprising number of established companies fail dramatically and suddenly, after years of successful commercial operation.

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In 2025, the Australian Bureau of Statistics released confronting news about corporate failure. Of the 2,662,998 operating in the country only 62.6% of primary industry businesses survived beyond three years. Of transport, postal and warehousing businesses, only 38.8% survived beyond three years. Overall 50.1% of companies failed within three years. Those are dreams become nightmares.

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When I started this book 20 years ago, only forty of the then Dow Jones companies were still there on the index before 1960, and only one, General Electric, had been there since its inception, yet these are the best of all companies, the so called ‘excellent companies’. Now General Electric has been dropped off the index too. It might be fair to say that eventually, all companies fail.

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It appears therefore that there should be greater demand for knowledge about fixing companies than for starting them or running them.

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So when deciding to write a book on turnarounds, the greatest surprise to me was to find the dearth of management and business books on the topic. The few I found in fact were little more than corporate histories and anecdotes, or sensationalist treatments of the projects undertaken or the personalities behind them. Good reads, but nothing to learn.

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Not only were there no adequate corporate management books discussing the issue, but in fact there were no reference books, no text books or guidelines or manuals, for the competent manager to learn, study or develop the necessary skills. It was as if the whole topic had been ignored.

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Yet on closer research, it was possible to see that it was not totally forgotten. While not in book form, it was discussed in business magazines prominently, or frequently in financial newspaper articles. So the subject was very important and always topical as a media item, but when in book form was most often disguised in the fashion of a biography, like Lee Iacocca's or Lou Gerstner’s, but even these were more of the style, ‘Here is someone who has done one.’

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Emphasis on ‘one’.

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In my experience a single turnaround, like the ones in the books I have described, are fraught with problems. Learning curves, trial and error, lost time, erosion of resources. A turnaround CEO is as specialised as brain surgery. A Neurologist has 8 years of medical school and 8 years of post graduate neurosurgery. When you hire a VP of Sales or a Head of R&D you are not catering to someone ‘trying it out’. The person is expected to know their job. A turnaround CEO is no different. I laugh when I see a job advertisement for a CEO where everything in the ad tells me it is a turnaround: shareholder relations, investment fund raising, business development, new opportunities, and the request is for someone stepping up to a CEO role or has 3 years’ experience. That is my opinion on a turnaround CEO. You want someone to start making an impact on day one, not taking time to give it a try.

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A wander through the bookstore today reveals a larger number of ‘turnaround’ books, but nothing has changed, they are generally shallow, circumstantial, and offering nothing for the serious executive.

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In the real world, failed companies go to liquidators or administrators. Legal avenues to wind up a failed business, with most people losing something in the process. They are not CEO’s let alone turnaround CEO’s. They are accountants with the legal authority to basically ignore the debts and creditors like the original owner could not do. Or to determine if the business is able to continue trading-on if debts are ignored. Always with people losing something. And if not able to continue even when debts are disregarded, to liquidate anyway. Those tasks are undertaken by accountants, bean counters, not turnaround CEOs. A bookkeeper could do as much.

 

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When uncovering an answer to why this might be the case, why here were so few books available, something else emerged. Most of what was there, as mentioned, referred to single turnarounds, dramatic turnarounds of large corporations. Visible and well known and topical companies. Attention grabbing corporate names. There was evidence that each was the swan-song accomplishment of those people documenting the story, the culmination of a life of non-turnaround management.

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There was also, sadly, evidence that the achievement, the turnaround, was unable to be duplicated in subsequent (or previous) engagements. Even sadder, sometimes the turnaround biography was antecedent to what was ultimately more failure in the company. An example might be Alan Mulally's achievements at Ford Motor Company which are chronicled in the book ‘American Icon: Alan Mulally and the Fight to Save Ford Motor Company’.

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This was therefore the beginning of the answer. Studies of CEOs in good companies abound because there are so many of them; and analyses, comparisons, statistics, can be gathered about them. Hence; ‘The Seven Habits of Highly Effective People’, or ‘In Pursuit of Excellence.’ A good CEO with a good track record, moves to greater, meaning larger, companies to do it all over again. Usually with larger pay cheques.

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This was not the case with turnaround managers. There are not so many of them, and the few are so independently individual that no direct comparisons can be easily made. The ones in the spotlight usually have only one career turnaround under their belt, so nothing exists from which to even generalize let alone specify a comparative analysis. Nothing for a book.

One other striking observation emerged. There was absolutely nothing about the small or medium sized turnaround. Companies between say $5 million and $50 million in revenues. Unless a CEO had turned around a large, visible company, there appeared to be little of interest from the media and publishing circles that printed those stories.

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Yet turning around a smaller company is as difficult, and in my opinion far more difficult, than a larger one. True the pressures are different, especially visibility, because of the very absence of the media interest, but the pressure is there just the same. The pressure on a turnaround executive of a large company under the media spotlight is missing in small companies, but in turn that leads to less awareness, less public and community interest, interest that sometimes opens unexpected doors.

What is different is that a smaller company has fewer staff, less cash flow, less time, fewer resources and less reserves, than a larger company, and the turnaround CEO therefore has a tougher job. And the giant, obscene pay cheques are not there. I have almost talked myself out of my career.

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Being smaller also means that certain options may not be as readily available in the turnaround process: less access to financial institutions, no shareholder base to prop it up, limited government assistance, or less renown and reputation to attract quality people, as examples.

 

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Management books are big business, sufficient that some authors look around for a niche or a gap and set out to write a book to fill that opportunity. And sometimes they can be self-serving, think about books about Musk or Jobs for instance, or deliberately promotional at the corporate level, books about Lego or Starbucks.

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Not so in my case. I wanted to write this book before I knew that there was a lack of them, because I have been fortunate enough to have the innate ability, to have developed the skills and to have had the opportunities presented to me to conduct many, many turnarounds, and in so doing, made vital, sometimes life-saving discoveries. Literally sometimes I have been told I saved a life. My nature is didactic; my style is empowering.

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It truly saddens me to see good companies collapse when the solutions are so evident, and I want corporate executives to learn that if you ‘do it like this’ you will save the company.

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So in my own career, I have been able, perhaps in a way different from others, to see not only the unique factors, but much more importantly the common factors, that lead to company failure and to have dissected and distilled my own efforts to determine my now well-established processes critical to repairing failed companies. I'm a pedagogue, I love teaching, and in keeping with this part of my personality, I've wanted to disseminate this knowledge.

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Fixing companies is extremely important. It has the potential to save jobs, mortgages, investments, years of effort, companies, careers, reputations, dreams and in exceptional circumstances, lives.

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A comment can be made here. There is a huge difference in turning around a company in decline, but still with cash flow, production, sales outlets, and so on, compared with a company that has gone past that stage and has actually failed. This is irrespective of the company size. Some of the turnarounds completed by the author have been extreme in the sense that these companies had entered insolvency when I came on board or were in effect totally bankrupt. Some illegally trading while insolvent. Hence many of the lessons in this book are about what to do after the consulting experts have come in, tried, used the remaining resources, and given up. After the company lawyers and accountants have wrung their hands and pulled out their hair. One company in particular had no staff, no products, no facilities and no funds. It is difficult to imagine how this was still a company. It’s a long story, the longest chapter in this book, and I hope you stay with it. Its turnaround is described in the next Chapter.

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