What Ocean Pacific Can Teach us about Growing a Business with the Right Management Team

It’s a fool’s errand to grow a business without a competent or sufficient management team. I’ve seen it tried a thousand times and fail just as many.

The most common example of this is the entrepreneur who’s been successful to a point but grows a business past his capacity to manage.  Growing a business that large is a wonderful accomplishment, don’t get me wrong, but it’s every good entrepreneur’s job to know when he needs to bring in professional management to oversee key aspects of his business.

My case in point for this rule of thumb is Ocean Pacific.

I’m sure many of you recall OP. It was a pretty popular brand back in the day, and it still has a name for itself. Yet Ocean Pacific’s desires repeatedly seemed to outshine the capabilities and strengths of its management team. This is demonstrated by the fact that I’ve had to run Ocean Pacific twice.

The first time I was brought in to change the company because it was in the manufacturing business and expanding overseas without the proper personnel who understood sourcing and distribution in international markets. Though they lost a lot of money before we could reign in the problem, we ultimately got them refocused and left them to it. Had they had the kind of management team in place that understood the nuances of international expansion and management, I don’t think I ever would have gotten involved.

The second time I was brought into Ocean Pacific it was to convert them from a manufacturer to a licensing only company. They had a fantastic design department, but that was about it. They did not have the kinds of managers who could oversee manufacturing, and even though the international issue had been more or less overcome, manufacturing was ultimately not a sustainable model.

But again, the problem was that they lacked the right folks, in this case to manage the brand quality of the licensee’s goods. They just couldn’t deal with worldwide licensing. Once again, this transition sent millions of dollars down the tube, so we were brought back in to properly restructure them and carry out their plan.

So what did we learn. Well, plans are great, but plans only work until you start implementing them. At that point, reality gets in the way. One way to make plans work a bit longer – or at least come out the other side – is to have the right management team in place. You cannot grow or morph a business without a sufficient management team.

Have you ever tried to carry out a large scale plan without the right people in place to help you do it? What were the results?

What Wally the Walrus can Teach us about Effective Process Development

Processes. Oh, processes.

How easy they are to ignore. How easy they are to let languish.

But don’t.

If cash is the blood of a business, departments are the organs and personnel are the cells, then processes are the bones. You must build your business on efficient, effective and solid processes.

What do you do when a customer’s order is going to be late? How can you track all of your supply usage and reordering supplies? How do you set a new vendor up in your system?

Your business rests on the foundations of these processes running correctly, and they should be consistently evaluated, adjusted and strengthened. Think of that evaluation as drinking milk and giving your business the calcium it needs.

Hire Someone? Yeah – Hire You!

Many people hire consultants to come in and tell them how to enact more effective processes in their daily business management. Consultants often have great solutions that they’ve designed or a commanding understanding of best practices, but before resorting to this route consider being your own consultant.

As the leader of your business, you should know how things run. You should be in touch with the people who work at your business at every level. You should be asking them questions about the kinds of issues they see or when something seems to consistently work incorrectly. You should find out what they do and how they do it. You should ask them if they think there would be a faster or smarter way of doing something that wouldn’t compromise other important principles (like quality, customer service or another step in the process).

And then you should put that information together and consider a reevaluation and a strengthening of the processes that govern your business. If there’s something happening that doesn’t have a process and keeps occurring in an erratic manner, put a process in place.

Zoey’s Zoo

Let me give you an example. Let’s say you run an online retail store called Zoey’s Zoo in which you sell various animal figurines directly to customers but also to various zoos and theme parks around the country (first, I hope you have separate processes for dealing with your B to B and B to C customers). What do you do when Wally the Walrus figurines are no longer available in the largest size but you get an order for one? Do you pull the product from your website, backorder the item, or contact the customer whose order will most certainly be late? As you bypass the order number and continue fulfilling orders that are in stock do you have a system for returning to this unshipped order?

If you are Zoey, you need to have a process for what happens when a product runs out of stock. You need a pipeline for pulling the product from your website, informing customers with outstanding orders, checking on the status of any incoming inventory, and then making sure that Wally the Walrus is purchasable again when it’s back in stock.

This may seem like a basic example and an easily constructed process, but it’s just one small bone among hundreds that make a body stand tall and a business run efficiently and effectively.

Consider the processes at your business. Evaluate and reevaluate.

Stand Tall.

What do you find to be the most difficult element of process creation and management?

It’s Always the President’s Fault, a guest post by Vic Taglia

As managing partner of GGG and the Turnaround Authority, I get the pleasure of providing guest posts by our other partners. The following post is by our newest Partner, Vic Taglia.


No, I’m not talking about Mr. Obama.

Twenty-five years ago I got my first CFO job with a $50 million manufacturer/distributor of electrical products. Howard, the company’s president, had enjoyed over 15 years of success with two shareholders. A public company based in California owned 20%, and a family-controlled equity fund owned the remaining 80%.

Things Went South

But the last year had been difficult for Howard. A large competitor had awakened from his slumber and began aggressively competing in Howard’s market. Another competitor had fine-tuned his operation and began capturing Howard’s business.

Howard’s management team, three sales/marketing types, the old CFO and the VP of operations were in conflict. The company was running out of stock and missing delivery dates.

The operations staff blamed the sales and marketing team for bad forecasts, and the sales and marketing team blamed operations for not manufacturing to the plan – and each other for bad marketing or bad sales.  The VP of operations was hit by a rental car bus at the airport and was unable to work. The CFO quit.  Howard’s strength was sales, and he treated the VP marketing as the heir apparent who could do no wrong.

After my first week on the job, the California company declared it wanted to sell its share of the business. The family fund responded that it would encourage a management-led leveraged buyout (none of these folks thought to mention any of this during my recruitment, of course.)  Howard saw this potential liquidity event as an opportunity to control his company.

No One to Blame But the Boss

Unfortunately, recent events and management turmoil precluded the finding of necessary financing. After three months of searching for financing, the family fund terminated Howard. I asked the company’s chairman why he let Howard go after 15 successful years and one not-so-good year. He replied that his only regret was that he didn’t fire Howard earlier.

He explained that a company’s president is responsible for everything at the company. Howard should have been prepared for the big competitor’s attacking the market. He should have anticipated the smaller competitor getting better.  He should never have played favorites.

I asked how it could be Howard’s fault that the VP of operations was hit by a bus. He said Howard should have ensured that there was adequate staff at lower levels.

In all successful organizations, leaders who do not deliver the results are fired. Baseball managers who lose games, generals who lose battles, captains who lose boats and business managers who lose money are all fired.

Or at least they should be.

In World War II, it was expected that American generals who lost battles lost their commands. What you saw in movies, such as Patton and Twelve O’clock High, was based in truth. There were no lucky or unlucky generals, only winners and losers. And the losers were relieved and sent home.

When your business is in trouble, you need to replace management.  If you don’t, the next owner will.

Want to learn about good management so you can avoid being like Howard. Then click HERE.

What are your experiences with failing management?

Read the Suggestions in the Suggestion Box

This cartoon makes me chuckle because it makes me think about all those companies that I go into where the CEO or President isn’t listening to anyone in the entire organization – and that’s to his detriment.

You have to have good communication up and down the line or you won’t know about the myriad ways that you could be improving your organization.

One of the first things I do when I go into a distressed company is reassure the employees that everything will be handled and that I will do my best to make sure they’re informed and taken care of as they deserve. It’s safe to say that many CEOs are not operating with this mentality.

The other thing I do is scour the organization for overlooked talent. I always need a new management team, and there are often great people on the inside with a profound understanding of the organization. If you are in upper management, utilize the talent beneath you. Listen to  people. Don’t overlook their suggestions.

One of the key markers of a successful company is that it’s a place that all employees are heard about their issues and thoughts. It is very demotivating to be an employee and to know that you aren’t being heard.

Today, listen to someone’s thoughts who you haven’t heard before and see what they can do for you.

What ideas have you gotten from people lower down in your organization?

The Incentive Plan? Don’t Screw up or You’re Fired

I love this cartoon. This is another one of those that’s been hanging in my office for a decade and a half.

This is NOT my mindset – that if you screw up you’re fired. I think it’s a shame when things are that way.

However, as someone who’s been a part of hundreds of businesses, often trying to figure out how to keep morale up and motivate employees, ensuring that they’re on board for whatever big changes and overhauls I have to implement to keep sinking ships afloat, I certainly understand the sentiment.

What’s your favorite business cartoon?