Edit ModuleShow Tags

The top four secrets of resurrecting any company


Published:

A recent article in the Wall Street Journal ("The Secrets of the GM Diet,") identifies the steps that General Motors took to get healthy after a trip to the "diet center" (aka bankruptcy court). When you strip away the complex language that describes large companies, the messages are surprisingly simple and apply to Bertha's Kitty Boutique just as easily as a multibillion dollar company. Ready for the secrets?

Here are the lessons the article pointed out, in my simplified language:

1. Make sure you have enough money in the bank. The language of big companies talks about stronger balance sheets, proper capital structure, contingent liabilities, unfunded pension liabilities, quality of assets and convertible bonds. All important stuff. However, when you boil it all down, you have to have enough money in the bank to run your business.

2. Build stuff people want. Large companies get all bound up in contracts, union issues, sunk costs and utilization factors. When things don't sell, marketing is extolled to market better, prices are slashed to be more competitive and expensive lobbyists are hired to berate government officials for unfair foreign labor practices. Guess what? If the dogs don't like the dog food, they aren't going to eat it!

3. Pay people what they're worth - maybe even a little more. However, when the guy who turns screws into sheet metal all day makes more money than your medical doctor, it ain't right and it doesn't take a rocket surgeon to figure it out. You shouldn't pay expensive champagne prices for beer! Big company exemption: I understand that the government protects the rights of some (unions) to hold others (consumers) hostage. I can't seem to square that with our stance toward Somali pirates. ...

4. Don't hire more people than you need. If you find you have more than you need, let them work somewhere else. It's unethical to underutilize people; you destroy good work habits. If you have one shovel and one hole to dig, you don't need five guys to dig it (unless they're pirates).

You now know the top secrets of turning around a large company. Go forth and make money. No bail out for you!
{pagebreak:Page 1}

Edit Module
Todd Ordal

Todd Ordal is president of Applied Strategy®. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He is a former CEO and has led teams as large as 7,000. Todd is the author of Never Kick a Cow Chip On A Hot Day: Real Lessons for Real CEOs and Those Who Want To Be (Morgan James Publishing, 2016). Connect with Todd on LinkedIn, Twitter, call 303-527-0417 or email todd@toddordal.com.

Get more of our current issue | Subscribe to the magazine | Get our Free e-newsletter

Edit ModuleShow Tags

Archive »Related Articles

So you wanna make a movie...

I'm selling my memoir, "Cheap Cabernet: A Friendship", to Hollywood for life-changing money: $3.5 million sticks in my head for no good reason ― it's just the number I made up.

Political economics are worth watching under Trump

In retrospect, Trump’s election should not be a surprise. It’s just that “the other side” has gained power after eight years of an equally remarkable American feat – the election of our first African American president whose power base was also grassroots in nature.

Colorado Business Hall of Fame Laureate Sue Anschutz-Rodgers

In a diverse life as a businesswoman and energetic philanthropist, especially for causes in rural Colorado, Sue Anschutz-Rodgers remains daring at age 81.
Edit ModuleShow Tags

Thanks for contributing to our community-- please keep your comments in good taste and appropriate for our business professional readers.

Add your comment:
Edit ModuleShow Tags
Edit ModuleShow Tags Edit ModuleShow Tags
Edit ModuleShow Tags Edit ModuleShow Tags
Edit ModuleEdit ModuleShow Tags Edit ModuleShow Tags