Lessons for Success

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The Willingness to Be Unpopular

I believe in always conducting business with integrity and treating everyone with respect. I’ve quoted Henry Kravis before, with whom I’ve had the pleasure of working. “If you don’t have integrity, you have nothing. You can’t buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing.”

But despite the fact I play fair and treat people well doesn’t mean I’m universally loved — far from it. In a career as a Turnaround Authority, you have to make many unpopular decisions. If you want to be everybody’s friend, you’ll never make it in this business. It’s like that quote by Harry Truman, “If you want a friend in Washington, get a dog.” The same goes in the turnaround business.

To be an effective leader, you have to be willing to be unpopular at times. I’ve been so unpopular at times that I’ve been shot at – twice! When you catch people not doing what they are supposed to do or need to reduce staff or benefits, people get unhappy.

But good leaders often have to make decisions that upset people. Take a look at Abraham Lincoln, considered one of our finest presidents. He was also one of the most unpopular. The press hated him and characterized him as a buffoon. He received death threats, one of which was printed in a Mississippi newspaper with a reward of $100,000 offered for his “miserable, traitorous head.” Members of his own party hated him. There is even a book called “The Unpopular Mr. Lincoln: The Story of America’s Most Reviled President.” When he died, a paper in Texas said,  “The world is happily rid of a monster that disgraced the form of humanity.”

A truly great CEO will make unpopular decisions for many reasons — to save the company, to ward off competition, to prepare for future changes in the marketplace. In 2004, the industry thought Verizon CEO Ivan Seidenberg was bluffing, and even worse, crazy, when he unveiled his unpopular plan to lay down fiber-optic cable across the country to the tune of $24 billion. Verizon is now the nation’s top carrier.

When Howard Schultz came back as CEO of Starbucks in 2008, he took responsibility for the bad situation the company was in, despite the fact he hadn’t been at the helm during the previous eight years. The share price was down 50% with news sources claiming Starbucks was no longer relevant and would be killed off by McDonald’s.

Because the cost was so high at a tough time in the company’s history, his decision to fly 10,000 store managers to New Orleans for a conference was an unpopular one. But he credits that conference with turning the company around. “If we hadn’t had New Orleans, we wouldn’t have turned things around. It was real, it was truthful, and it was about leadership,” he said in an interview in the Harvard Business Review.

And let’s talk about one of the most unpopular CEOs of this century: Steve Jobs. He was fired from his own company at the age of 30. Rather than wallow in defeat, he created a new company, Pixar Animation Studios. In 1996, he returned to Apple, became its CEO the following year and created products like the iPod, iPhone and iPad.

Think about those examples the next time you have to make an unpopular decision. As the former prime minister of the UK Tony Blair said, “Leadership can be an unpopular business. The art of leadership is saying no, not yes. It is very easy to say yes.”

And look at it this way, odds are you won’t get shot at.

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The Leadership Model and Vital Skill that Turned Around Home Depot

I have some idea how Frank Blake felt when he took over as chairman of Home Depot eight years ago. Employees, the board and investors were all unhappy with the previous chairman, Bob Nardelli, who had downplayed the importance of customer service and expanded in inadvisable directions.

Blake inherited a whole mess of problems to deal with when he took over. That’s pretty much what I do for a living as the Turnaround Authority. In fact, I’ve referred to myself as a janitor. I clean up messes.

Blake recently stepped down as CEO although he will continue as chairman for several months. He is credited with turning the troubled company around, and putting the focus back on customer service. He even kept his cool when the company suffered a massive security breach this September, immediately taking responsibility for the breach and issuing two apologies in five days, one from him personally.

He obviously did a lot of things right to get the $78 billion-dollar company back on track. He sold stores in China. He changed the bonus system to reward customer service and greatly increased the bonus pool even as earnings were collapsing. Last year he increased profits by $5 billion, without adding new stores, and during his tenure the company’s share price increased 127%.

I believe a major key to his success was reinstituting a leadership model that the co-founders Bernie Marcus and Arthur Blank had used – the inverted pyramid. According to an article on Fortune.com, less than a week after he took over, he said, “The right way to look at this is me on the bottom. My job here is to clear away the things that get in your way.”

And how did he clear the way? By not shying away from conflict and listening to people to determine where the problems were. As Carol Tomé, the CFO, said, “He invited conflict into our decision-making. We were conflict-hesitant. Frank asks a ton of questions that make you say what is working and not working.”

He was interviewed in the AJC this week in the column “5 Questions for the Boss” and said, “one of the toughest things in the job is having people speak candidly to you, telling you what’s going wrong.”

He learned the right way to ask a question — by assuming there is a problem, “which gives license for people to be more forthright. You can start the question with, ‘Gee, I understand we’re having real problems with the new process we’re rolling out.’ If you ask it that way, you can start to understand the issue.”

You have to give people a license to say what is going wrong. Otherwise, everyone is smart enough to realize that their career isn’t made by identifying problems. Listening is an active process and requires effort. Follow-up questions are important.”

When Blake took over Home Depot, he had little retail experience. I often become interim CEO of businesses and industries I have just passing familiarity with. But I do as Blake did, as pointed out in the Fortune article. “What Blake lacked in experience, he made up for by listening.”

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Stories of Unbelievable Fraud for Fraud Awareness Week

I’ve written a lot about fraud, as I’ve dealt with millions and millions of dollars and merchandise being stolen from companies I’ve worked with. This week, November 16-22, is Fraud Awareness Week, a good time to review your fraud policies as they can cost your company a lot in lost money and time.

To celebrate the occasion, here are a few get-rich schemes that didn’t work out exactly the way they were planned.

This first story starts in 1993, when a con man convinced investors that he had found gold in Borneo. Michael de Guzman, a Filipino geologist, fooled investors and his employer, Bre-X Minerals, by filing down his wedding ring to “salt” the gold samples sent to a lab. At the discovery of “gold” the value of Bre-X, a penny stock, soared on the Alberta Stock Exchange. He and his partners eventually sold off a portion of their options for $100 million.

Enter the Indonesian government, which wanted a piece of the action. Concerned about his fraud being uncovered, de Guzman did the logical thing: he set fire to his office to destroy the files.

But it wasn’t over yet. The Indonesian government took over 55% of the mine to be run by Freeport McMoran, and Bre-X’s market cap went down a billion dollars. Ever resilient, de Guzman just added more gold flake to the samples, which he bought from local miners. The stock soared again.

Gregor MacGregor, winner of the Creative Fraud Award. He invented an entire country.

Gregor MacGregor, winner of the Creative Fraud Award. He invented an entire country.

Not surprisingly, the miners from the other company couldn’t find any gold and asked de Guzman for an explanation. So he hopped on a helicopter to travel to the site to talk with them. He never made it. According to the pilot, he turned around at one point and de Guzman was gone. It was assumed he had jumped and days later the Indonesian army found a body, eaten by animals, which they identified as his.

The stock plunged to zero. Many people think de Guzman is still alive somewhere, having paid a small sum for a body to be identified as his.

The Antar family committed fraud for almost 20 years, from 1969 to 1987 at the retail store chain ironically called Crazy Eddie. The company underreported taxable income by skimming cash sales, reported fake insurance claims and avoided payroll taxes by paying employees with cash.

This story involves another disappearing act. After the company went public in 1984, it initially scaled back the fraud to get a higher valuation. But motivated by a desire to increase stock prices, it devised other schemes to infuse cash like moving funds from secret bank accounts into the company.

After a hostile takeover, the fraud was discovered. Eddie Antar, the CEO, went into hiding for three years but was caught and convicted, along with two other family members.

But the Creative Fraud Award goes to Gregor MacGregor. He created an entire fictional country in Central America in the 1800s. While serving in the British army, he visited the areas now known as Honduras and Belize. After returning to London, he said he had received a land grant and announced the nation of the Republic of Poyais.

After getting the requisite flag, currency and yes, even a coat of arms for his new country, MacGregor began to sell land, issued debt and attracted settlers by regaling them with stories of the wonderful capital city and the quality of the soil.

Imagine the surprise of those first settlers when after a long ocean voyage, they found just jungle and old wooden shacks. MacGregor was arrested, but fled to France where he tried the scheme all over again. I guess that was easier in the pre-Internet days.

He then made his way to Venezuela, ending up with a pension and the title of general after he helped the country in its fight for independence.

While some stories of fraud like these are entertaining, fraud is a serious business. It’s a good idea to review your fraud policies. For tips on how to prevent fraud in your company, please see some of my previous posts

 

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Causes of Job Burnout

This is part two of a three-part series on dealing with job burnout. In the first post, ”Dealing with Job Burnout,” we provided resources for you to determine if you are experiencing job burnout. Part two will cover the causes of burnout, and part three offers some solutions for job burnout.

I was interviewing for a job to take over as CRO with the owner of an athletic shoe company. He owed the bank millions of dollars, and as I was speaking with him I could see the stress on his face and hear it in his voice.

“Let me handle this,” I said. “You look like you could have a heart attack.”

But he declined to hire me, assuring me that he was only in his forties, and he could handle it himself.

Not long after that, I got a call from the hospital. Three days after our meeting, he was standing in line at the Varsity to order a chili dog when he had a massive heart attack. Lucky for him, some EMTs were in line next to him and took him directly to the hospital, where he immediately had bypass surgery. He was calling from his hospital bed to let me know that he wanted to hire me.

Another client, who was CFO of a university, was equally stressed and hated his job. I had been there just one day when he had a massive heart attack. He lived, but never came back.

Sadly, these types of situations are not uncommon. And I’ve seen worse — two attempted suicides and one actual suicide.

These are extreme cases of job burnout, but good examples of what can happen if you don’t take steps to deal with the situation.

But how does job burnout happen? Chances are there isn’t just one cause, but several factors contributing to your condition.

An article in http://www.cbsnews.com, “Are You Suffering from Job Burnout?” suggests there are three types of job burnout:

  • Frenetic burnout: You tend to overload yourself and work to the point of exhaustion. You may have been accused of being a workaholic.
  • Under-challenged burnout: You don’t feel challenged enough at work, you’re bored and don’t see an opportunity for personal development.
  • Worn-out burnout: You’ve been at the same company for years and no longer feel any satisfaction with your job.

In addition to feeling overworked, unchallenged and too frenzied, an article on Mayoclinic.org, “Job Burnout: How to spot it and take action,” lists several other factors that can lead to job burnout. These include:

  • Lack of control. If you don’t have the resources to do your job and no ability to influence decisions, it could lead to job burnout.
  • Dysfunctional workplace dynamics. Negative office politics and dealing with toxic personalities in the workplace can cause you to burnout. All that drama is exhausting.
  • Poor job fit for your skills and values. You may feel your best skills aren’t being utilized. You may also not agree with the way your company does business, and what values it seems to espouse.
  • Isolation on the job. If you do not get along with your co-workers or they seem to leave you out of activities, you may feel isolated and stressed.
  • Work-life imbalance. If your job leaves you little time to spend with family and friends or doing activities you enjoy, you could burn out more easily.

Certain people are more prone to job burnout than others. These include those people whose identity is so strongly tied to their work. Also, those in a helping profession, like counseling or teaching, can tend to suffer from burnout from all the constant demands made on them during the day.

If you are suffering from job burnout, you need to take action. Studies have shown that people identified with job burnout were 1.4 times more likely to develop coronary heart disease. That risk increased to 79 percent for those most identified as being burned out, according to an article on Atlantic.com, “Study: Job Burnout Associated with a 79% Increased Risk of Heart Disease.”

Your mental and physical health could be at risk if you don’t do something about job burnout. Come back for the last in this series, which will discuss solutions for job burnout.

 

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Dealing with Job Burnout

This is part one of a three-part series on dealing with job burnout. In this first post, we provide resources for you to determine if you are experiencing job burnout. Part two will cover the causes of burnout, and part three offers some solutions for job burnout.

Stress on the job is nothing new. But lately, you’ve noticed a different type of stress. You are having trouble sleeping and just can’t work up enthusiasm for your job anymore. You may even be getting sick more often.

It’s not just being bored now and then, or not being excited about a project you’re working on. You’re noticing that your attitude about your job has become more negative and you can’t work up the excitement level you used to experience. Even areas of your job that you used to enjoy are not longer pleasurable.

You could be suffering from job burnout. If you suspect that’s the case, it’s best to determine that sooner or later so you can take steps to overcome it.

While it’s not a specific medical condition, it is a specific type of stress and can lead to exhaustion, illness and inability to function properly if not treated.

Job burnout isn’t necessarily related to the number of hours you work, either. You could work 80 hours and week and be fueled by passion for your work. Or you could be barely squeezing in 30 and dreading every one of them.

If you think you may have an issue with job burnout, here are some questions provided by staff of the Mayo Clinic that you can answer to determine if that may be the case.

  • Have you become cynical or critical at work?
  • Do you drag yourself to work and have trouble getting started once you arrive?
  • Have you become irritable or impatient with co-workers, customers or clients?
  • Do you lack the energy to be consistently productive?
  • Do you lack satisfaction from your achievements?
  • Do you feel disillusioned about your job?
  • Are you using food, drugs or alcohol to feel better or to simply not feel?
  • Have your sleep habits or appetite changed?
  • Are you troubled by unexplained headaches, backaches or other physical complaints?

If you answered yes to any of these questions, you may be experiencing job burnout.

Symptoms include irritability, chronic fatigue, loss of appetite, insomnia, increased illnesses and feelings of anxiety. You may feel apathetic and hopeless and begin to feel isolated from your co-workers.

Take a case of job burnout seriously. It won’t just go away like a cold and you need to do more than treat the symptoms. If not treated, you may experience more illnesses and may even start to perform poorly on your job.

Come back for part two, which will discuss causes of job burnout.

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How to Develop Loyal Employees

This is part two of a two-part series on the importance of developing and maintaining loyal employees. In part one, we explored why every company should focus on having loyal employees and how doing so contributes to its revenue. Part two offers tips of how to develop loyal employees.

When it comes to developing loyal employees, it’s not all about money. Often, senior management thinks that all it takes is a bigger paycheck to keep talented employees around. They often rely on the golden handcuffs, making it difficult for well-compensated employees to leave. But think about that for a second — they may stay, but do you really want your employees to feel like they are hostages? What do hostages do at the first possible opportunity? They flee!

So how do you develop loyal employees, the kind that wants to stick around and not just for a bigger paycheck? Here are just a few tips to get your business on its way.

1. The top way you inspire loyalty in your employees is through reciprocation. Be loyal to them. Let your employees know they are important to you. Treat them like they are humans and that you care about them. Ways to do this include rewarding good work and praising their efforts. As they say in parenting circles to encourage good behavior for children, “Catch them doing good.” Rather than only alerting employees for unsatisfactory performance, find something positive they have done and mention it. Another way is being flexible when their personal lives need attention. Don’t enforce rigid time-off policies. If your boss refused to give you a day off when your wife is in the hospital, how would you feel about that company?

2. Create a challenging but supportive environment that treats employees fairly. Remember the saying that “Employees don’t leave their job, they leave their manager.” If employees do not feel challenged and supported in their efforts, they feel unappreciated. Employees who feel unappreciated rarely stick around. As do employees who feel they’ve been treated unfairly. If you really want employees to resent the company, treat some better than others. Support your employees by providing job training, growth opportunities and asking about their career goals.

3. Get rid of the disloyal, negative employees. No matter how you treat them, some employees will always complain and seem to revel in negativity. That kind of behavior can bring down co-workers and can create a negativity vortex, sucking in other people in the office. Get rid of those people. You don’t need that negativity and they will never become loyal employees. Moods are contagious and if you have too many people who thrive on negativity, your office will become a toxic environment as well.

4. Have transparent and open communication with your employees. Employees hate to be left in the dark. Share the big picture with them. Get buy-in for the goals for your company. Build a team where everyone, no matter what the level, is invested in the success of your business. This can take various forms, from company-wide meetings, to newsletters, to daily stand-up meetings by department.

Share the victories with them. Emulate The Ritz-Carlton, where employees of every department in every hotel in the world gather every day for 15 minutes to share “wow stories.” These are tales of people who went above and beyond for customers.

These stories motivate employees, bond them in the goal of providing excellent service, and recognize those employees that provided it.

In my experience, the majority of people really do want to feel part of a team and like to be loyal to their companies. Don’t make it hard for them to do so.

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How Loyal Employees Contribute to the Bottom Line

 

This is part one of a two-part series on the importance of developing and maintaining loyal employees. In part one, we explore why every company should focus on having loyal employees and how doing so contributes to its revenue. Part two offers tips of how to develop loyal employees.

When is the last time you heard about employees risking their jobs to stand up for a multi-millionaire? Or going so far as to organize a customer boycott? That was the situation at Demoulas Market Basket Inc. in Massachusetts where an ugly family feud was playing out this summer.

More than 200 office and warehouse workers walked off the job to support their ousted CEO, Arthur T. Demoulas. Artie T., as he is known to the company’s 25,000 employees, owned with other family members 49.5 percent of the supermarket chain. His cousin Arthur S. Demoulas and his family owned the other 50.5 percent and ousted Artie T. in June.

Employees protest the ouster of popular CEO Artie T. last summer. (Photo from www.bloomberg.com. Photographer: Suzanne Kreiter/The Boston Globe via Getty Images)

Employees protest the ouster of popular CEO Artie T. last summer. (Photo from http://www.bloomberg.com. Photographer: Suzanne Kreiter/The Boston Globe via Getty Images)

The company, founded in 1917, has $4.3 billion in annual sales and family members had been fighting bitterly since 1990 when there was a dispute over the transfer of shares. Lawyers have racked up a lot of fees in the ensuing court battles.

Hourly employees risked their jobs and urged customer boycotts for their boss, estimated to be worth around $675 million. Customers responded and boycotted the stores, even taping receipts from rival markets to store windows. Some analysts put the losses at more than $10 million a day.

Why? As one employee said in an article covering the feud put it: “We are a family and they messed with our dad,” said Charlene Kalivas, 57, a longtime Market Basket employee.

Artie T. won their loyalty by showing he cared about them. He did things like covering medical bills for employees’ sick family members, paying employees who were too ill to work, giving them good wages, decent benefits, Christmas bonuses and personally calling employees when a parent had died. “He’s one of us,” said a protesting employee. “He comes here and he knows everyone by name and treats us fairly.”

The decades-long family feud ended in August when Artie T. and his sisters agreed to purchase the 50.5 percent of the company owned by the other side of the family.

It was a costly, ugly family feud. And the winner was the man who had worked hard to win the devotion and loyalty of his employees.

Yet, you don’t hear too much about the need for businesses to retain loyal employees. They focus more on customer retention and spend millions on retaining them. How much do they spend on keeping loyal employees? Do they care?

They should. The long-term success of any company depends on finding and retaining qualified employees. For all you hard numbers people, consider this: researchers at the University of Pennsylvania surveyed 3,000 companies and found that if a company invested 10 percent of its revenue on capital improvements, it increased is productivity by 3.9 percent. If it invested the same amount in developing employee capital, its productivity more than doubled, to 8.5 percent.

It’s not just because treating your employees fairly is the right thing to do. It’s also the profitable thing to do.

Come back for Part Two when I’ll discuss ways to build employee loyalty.

 

 

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The Value of Trust and Integrity in Negotiating

If you don’t have integrity, you have nothing. You can’t buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing.

— Henry Kravis

I write and speak a lot about negotiation. It’s an integral part of a career as a turnaround authority. Anyone in the turnaround field spends a great deal of time negotiating on a client’s behalf with vendors, lenders, bankers and employees — sometimes even family members.

In a previous post, “A Key Ingredient to a Successful Negotiation,” I wrote about the importance of mutual respect among parties in reaching a beneficial and positive outcome for any negotiation.

While some people admire underhanded business tactics and thrive on dirty negotiating and attempts to smear people’s reputations — anything to score a win — I persist in believing that integrity in business still has a place. And conducting yourself at all times with integrity has the added benefit of actually helping you negotiate better deals.

Yes, engaging in dirty tactics may win you a few deals. But word of your character and the way you negotiate will get out. And soon your reputation as a dirty dealer will affect the way you are perceived. Before you even walk into a negotiation the next time, your opponent’s back will be up. They don’t trust you. And without trust and dealing with integrity, deals are much more difficult to make and can even fall apart.

I recently read an article on Forbes.com, “Success Will Come and Go But Integrity is Forever.” The author, Amy Rees Anderson, addresses the value of trust.

“The value of the trust others have in you is far beyond anything that can be measured. For entrepreneurs it means investors that are willing to trust them with their money. For employees it means a manager or a boss that is willing to trust them with additional responsibility and growth opportunities. For companies it means customers that trust giving them more and more business. For you it means having an army of people that are willing to go the extra mile to help you because they know that recommending you to others will never bring damage to their own reputation of integrity. Yes, the value of the trust others have in you goes beyond anything that can be measured because it brings along with it limitless opportunities and endless possibilities.”

In the book “Essentials of Negotiation” the authors Roy J. Lewicki, David M. Saunders and Bruce Barry write about the role of trust in negotiations. “Trust increases the likelihood that negotiation will proceed on a favorable course over the life of a negotiation.”

And in addition to producing more favorable outcomes for your clients during your career, you’ll enjoy a positive reputation for the rest of your life.

And that good reputation can lead to more business. Some of my best and long-standing referral sources are from professionals who sat across the table and appreciated integrity and my straightforwardness.

Even years later, will people remember that you negotiated a big deal for a client? Or are they more likely to remember the dirty way you did it.

I opened this post with a favorite quote from Henry Kravis. I had the fortune to work with him many years ago, so I know firsthand that his sentiments are sincere. He practices what he believes and is also a generous philanthropist.

As that great philosopher Bob Marley said, “The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.”

 

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Short-Term Pain, Long-Term Gain

For almost 40 years, I’ve been working with distressed businesses to create value for stakeholders. Unfortunately, the one common theme is that at some point during its life cycle all companies will experience financial difficulties caused by our economy or by management making the wrong decisions. Some companies will experience these difficulties more than once.

It’s how the companies deal with these issues that determine whether they survive or become a statistic of another failed business. The same could be said for individuals — how we deal with adversity can determine our survival or success.

I come from a humble, poor background. We were so strapped for cash that we had to borrow money to bury my WWII veteran father in 1964. Thanks to Social Security, my sister and I received death benefits until we were 21. To make additional money, I mowed lawns at age 12, sold peanuts at football games and had a paper route. The entire family chipped in to help with finances.

Many families also implement survival strategies for the greater good of its members. Some cut out dinners in restaurants so their daughter can go to cheerleading camp. Others drive their cars for 200,000 miles so the family can live in a nicer home. One parent works a day shift while another works at night so they can always have one parent with the children and save on daycare.

We deal with short-term pain for long-term gain.

The same concept goes for the companies I work with. My job is to educate people at these failing companies and implement survival strategy. It’s a tough, stressful job because it does involve people’s lives. I know what it’s like to struggle financially and I don’t wish to take anybody’s job away.

However, generally a turnaround does involve cutting jobs, reducing pay, closing plants, changing products or product lines, and sometime firing senior management that made the wrong decisions. Companies must change direction to survive.

Just look at all of the companies throughout the years that have changed for survival — Coca Cola, GE, Home Depot, General Motors, Chrysler, banks, insurance companies, probably even your company. All of these businesses have made tough decisions for survival. Unfortunately, some don’t. What ever happened to the buggy whip and wooden wheel businesses?

Yes, it’s always tough when people lose their jobs. But I learned to view those necessary job cuts in a different way. Years ago I was driving my son Sam to school. He asked me what I was doing that day. I told him that I had a rough day ahead of me because I was going to Philadelphia to lay off 200 people and close a division of a company. He looked at me like I was an ogre and asked how the kids of those laid-off parents would be able to afford camp, get baseball gloves and enjoy candy (now with kids of his own his concerns still lie in these three areas).

I told him that by laying off 200 people and closing one plant, I was saving 600 jobs and keeping the company alive. Certainly what I had to do was terrible for some people, but it was for the greater good. If I didn’t let 200 people go today then I’d have to let 800 go next month.

The strategy worked. Less than a year later, the chain was merged into a national retail chain and jobs were restored as the footprint expanded. It was another case of short-term pain for long-term gain

Another analogy of a turnaround is that of being in an accident and going to the emergency room. The dedicated doctors and nurses sole goal is for you to survive. Hours of surgery, many stitches, amputation of extremities may be in order. Later, the patient goes to the plastic surgeon, buys a wig or obtains a prosthetic. But, we survive thanks to these dedicated folks. Short-term pain for long-term gain.

All of us individually have made decisions that involved short-term pain for long-term gain. And companies have to do the same.

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The One Person Every CEO Needs

I love reading “The Corner Office” column by Adam Bryant in the New York Times on Fridays and Sundays. Adam talks with CEOs and other leaders about management and often asks about the lessons they learned on the road to success.

It’s refreshing how honest many of these leaders are. Yesterday, the column was about Penny Herscher, who is CEO of FirstRain, a business analytics firm. She admitted that she has a strong personality and started out too autocratic, sure she was right all the time. People told her they didn’t want to work for her, or they just left the company.

She mentions a mentor who made a big difference in her life. “He was one of the only people who would hold up a mirror to me and say, ‘O.K., that wasn’t good.’ I needed somebody who would tell me the truth. Many leaders with strong personalities never hear the truth because their people are afraid to tell them. The people who will tell you the truth are the most valuable people in your life.”

Bingo! In my career as a turnaround authority, I’ve seen so many companies in dire situations, on the brink of failure or bankruptcy. Sometimes the root of problems isn’t that hard to determine. Many of the employees knew it. Many in senior management knew it. But no one wanted to tell the CEO the truth.

Usually it’s because they fear losing their jobs, they might be punished, or ostracized, or they have tried several times in the past and their suggestions were ignored.

Every CEO or business leader has to have someone who will deliver the truth, no matter how unpleasant. You can’t fix what you don’t acknowledge.

I read an article online about a company that says it only works with “enlightened leaders.” The title of the article is “Destructive Leadership Practices: Is Your CEO in Denial?”

The author, Jeannie Walters, writes about a time she worked with a growing technology company that had a successful product and received a lot of press. But the high rate of employee turnover was hurting it and great talent didn’t stay.

Turns out, the CEO was “inflexible and demanding. They were too fearful to tell the truth about feeling overworked and under appreciated. Every new employee learned the secret code of ‘don’t ever offend the CEO,’ which also meant never critiquing his original work. This included the design of the logo (it was awful) and the user experience of the very product they were selling.”

She presented her findings about the company to the CEO, which were confirmed by the marketing director during the meeting. He didn’t want to hear it and declared all the information was wrong. Fast-forward a few months: the marketing director is gone and the company eventually shut down.

You’re most likely not going to like hearing about which areas are not working in your company, whether it’s that your management team isn’t functioning, your relationships with your vendors are not good or your business is not as well off financially as you thought it was.

Every CEO needs at least one truth teller in his or her life. You don’t have to like it, but you do have to make yourself open to hearing it, believing it and acting on it. It helps to remember that while you may go through short-term pain, it’s all for long-term gain. Don’t be a CEO in denial.