The worst cases in my career in the turnaround industry are when I work with businesses that could have been saved. If only we had been called in earlier. Those are the ones that really bother me, because these business failures didn’t have to happen. Had we been brought in earlier, we could have determined where the problems were and had many more options to fix them.
But often we are like firefighters who are called in after a home is in ashes, rather than at the first sign of smoke. Then all we can do is sift through the ashes.
Sometimes the best we can do is to get the most for a business in bankruptcy or through a fire sale, pun intended. And I always think, “If only they had called us earlier.”
The saying we have is “If the alligators are snapping, it’s too late to drain the swamp.” You have to pay attention when things are going wrong and fix them early on, before they become larger problems later, possibly even insurmountable.
If you catch a problem early, you have options. You can drain the swamp. But if you wait too late and the alligators have moved in, well, now you have to face them head on. Those alligators aren’t going to just relocate and find food elsewhere.
So why do CEOs and business owners wait until it’s too late to ask for help? Here are five reasons:
- Hoping the situation will change
Your sales manager isn’t meeting his quota and he is experiencing a lot of turnover in his department. He keeps promising he’ll hire more sales reps and “we’ll exceed our quota next month!” But he doesn’t and the competition is taking over your accounts. He should have been fired or refocused and now your competition is taking your accounts.
- Thinking you can fix it yourself
When I get time, I can focus on the problems in our accounting system, you think. It’s not working correctly and you aren’t getting the financial information you need to make the best decisions for your company. If you could only take a day to focus on where the problem is and what you need to do to solve it. Every day comes and goes, each with its own set of priorities, and you never do get around to focusing on the issues with accounting. And your business is suffering.
- Not wanting to admit mistakes
Sometimes with big jobs comes big egos. And an unwillingness to admit that you’ve made a mistake. Larry, the CEO of seminar company, hated change and would not admit to mistakes. He firmly believed that people were more likely to respond to the hundreds of thousands of mailings he sent if they were posted from their home states. So he had trucks driving hundreds of miles so mailings would carry a local postmark, to the cost of around $400,000 a year.
Fortunately, I was called into this company in time, and despite the fact their EBITDA was -$4 million, I was able to pull off a successful turnaround.
- Reluctance to ask for help
Some people see it as a sign of weakness to ask for help. As reported in the article “Why is Asking for Help So Difficult” in the New York Time, “There is a tendency to act as if it’s a deficiency,” said Garret Keizer, author of ‘Help: The Original Human Dilemma.’ “That is exacerbated if a business environment is highly competitive within as well as without. There is an understandable fear that if you let your guard down, you’ll get hurt, or that this information you don’t know how to do will be used against you.”
- Denial of the problems
It’s the head-in-the-sand tendency. “Calvin and Hobbes” creator Bill Watterson said, “It’s not denial. I’m just selective about the reality I accept.”
The sooner you accept your reality, the quicker you can get help. You don’t want to come face to face with those alligators.