turnaround professional

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Why You Want Your Employees to Take Vacation

Many people refer to the third Monday of January as Blue Monday – the most depressing day of the year. The holidays are over, the weather is cold and drab and there is less sunlight.

If you’ve made some typical resolutions for the new year, you may have given up foods you love, or alcohol for the month. Rather than cheery holiday cards that arrived in your mailbox in December, now the mail just brings bills from purchases you made this past month.

Here’s my prescription for battling Blue Monday. Plan a vacation. Not only will it give you something to look forward to, taking time off is good for your health and your productivity. And encourage your employee to take time off as well.

While many Americans leave vacation days unused every year, according to a survey done by Glassdoor, a career website, 15 percent of U.S. employees did not use any in 2013.

And they even brag about it, believing they are more productive and proving themselves more dedicated and valuable than their co-workers. They may believe it helps ensure job security.

But studies have shown that not using all of your vacation is actually hazardous to your health. The Framington Heart Study found that taking vacation increases your longevity and decreases your changes of dying from a heart-related cause.

And taking a vacation can actually make your more productive. In an interview with ABC News, Francine Lederer, a clinical psychologist in Los Angeles said, “The impact that taking a vacation has on one’s mental health is profound. Most people have better life perspective and are more motivated to achieve their goals after a vacation, even if it is a 24-hour time-out.”

Recognizing the importance of time off, many companies have taken unique approaches to make sure their employees refresh themselves.

Rather than mandate a maximum number of vacation days, HubSpot instituted a minimum number. Every employee has to take two weeks off every year. The Motley Fool awards the Fool’s Errand prize to one lucky employee. The company draws a name of an employee who has been with the company at least a year. The lucky winner gets $1,000 and two weeks off, must leave immediately and have no contact with the office. And if you work for FullContact, you receive $7,500 to finance a vacation.

Evernote began offering unlimited paid vacation. But some employees were confused and thought that meant they shouldn’t take any vacation. So the company offered each employee $1,000 to get away, and “come back with a stretched-out mind,” said Phil Libin, chief executive, as quoted in an article in the Wall Street Journal.

There is another excellent reason to encourage a two-week vacation. As the Turnaround Authority, I always recommend that banks and financial institutions require the CFO to take two consecutive weeks off to detect and prevent fraud.

As I write in my book, “How Not to Hire a Guy Like Me: Lessons Learned from CEO’s Mistakes,” during his absence, do his job. Sit at his desk. Open his mail. Review all of the deposits. Talk to his secretary or assistant. Just see what happens. This method has long been highly successful for CFOs, and banks have used this same technique for ages. If you don’t find anything unusual, that’s wonderful. Unfortunately, though, you might uncover a detail worth noticing.”Having another set of eyes review transactions can uncover fraud and some misdemeanors.

Taking time off is good for your health, your productivity and your outlook, and that of your employees. It’s also an opportunity for you to spot potential fraud.

So rather than dwell on the dreary days of January, plan a getaway. Even if it’s just a weekend away, you’ll feel refreshed. And Blue Monday will be just another day.

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Your Employees Always Know

Have you ever thought to yourself, my employees have no idea what I make, or they have no idea what our profit is on this or something similar? Well let me tell you something: you’re wrong.

There are no secrets in a company. Your employees know.

I once took over at a refrigerator warehouse company and began my job by dramatically slashing the owner’s salary, which was not simply too high for the owner of a failing company in need of a turnaround professional but too high for the owner of any company this size. Oh, and I also fired his grandmother whose salary was also a pretty penny too high.

Later that same afternoon I was surveying the warehouse which was a mile away from the offices and headquarters, and a forklift driver pulls up alongside me. He says, congratulations on firing grandma and reducing the boss’s salary – he should never have been making so much money.

Not only did this random employee already know that I’d done both of these things, but he knew that grandma was on the payroll and the boss was making way too much beforehand.

I’m telling you – your employees always know. There are no secrets.

That leads me to a few pieces of advice:

1. Ensure that all of your employees sign a non-compete/non-disclosure confidentiality agreement. All of them, no matter their position.

2. If you have things that truly must be kept secret, think longer and harder about who has access to that information, what computer(s) it resides on, etc. Despite the fact that everyone is working on or around it, I’m sure that the secret formula for Coca Cola is still secret.

3. Accept that certain information will be public, and use the knowledge of its publicity to your advantage.

What have you been surprised to learn that your employees know?

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Learn From Your Mistakes or Enjoy Them in Round II

I was at a presentation recently where one of the handouts included the following quote. I thought it was a great one to share:

“No one learns from success; you really only learn from your mistakes and failures.”

– John Rowland, former governor of Connecticut

I love it, because it’s the essence of what makes a good turnaround professional. Oh, no, no – those failures are long past. We’re in the business of succeeding where it was not done before us. But as I’m fond of saying, it’s the gray hair or no-hair ones who succeed in this business.

That’s because we’ve been around long enough to have seen so much. No, it’s not that we were failing and learning so many lessons from our mistakes (though we’ve all got some gems in there, I’m sure). It’s that we’ve had so much experience of our own and watching and learning from others’ mistakes and all of the business hullabaloo that goes on around us.

I’m going to encourage you to take some time to think about some of your mistakes and share them. This is a great team-building exercise and a great way to pass around your wisdom. I suggest that you ask every member of your team to think about and explain – to everyone else – one big mistake he or she made and what was learned from that mistake. You never know who’s going to need that wisdom to avoid a blunder that could cost your company big-time.

What lessons have you learned from your mistakes and failures?

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The Old Dog May Not Learn New Tricks, But He Can Always Learn New Lessons

As I vacation in Italy, I find myself learning an important lesson – not one that I didn’t tacitly understand before, but one that became more pronounced in my mind over the last few days.

I’ve always said that in the business of turnaround you want to go with the gray-hair or no-hair guy. That means that you want the guy with the experience. People don’t just enter turnaround fresh out of business school. They get experience by being involved in tons of other businesses, transactions, organizations and the like – especially ones that have faced crises and big problems.

But two people (or groups) have taught me a valuable corollary lesson: you’re never too old to learn something new.

The first person who helped me see this was my wife. In preparation for our trip to Italy – a place we try to go often and that we plan on returning to in the future – my wife started studying Italian with a new language program. Though she didn’t have much time before we came, she loved learning it and has already put many of the phrases and much of her vocabulary to good use. And she’s learning tons more every day we’re here.

I was so impressed that in her mid-fifties she started learning a new language. It’s enriching her life, it’s helping ours, and she’s found that the act of learning a new language and subsequently thinking in that language is letting her look at the world – and especially Italy – in different ways.

Now, my lesson of “never too old to learn something new” does not come from her learning Italian at her age – she’s not old at all! It’s me learning that at my age I can still learn new things and gain valuable experiences.

The other place I’ve learned this lesson is from my partners. They’re a great group, but they’re not gray-hair/old-hair people. They’re experienced but far more youthful than I am. That makes me think twice about my favorite saying, since I learn a ton from them and value the incredible work they do. As excellent turnaround professionals, my partners have taught me that there’s always something new to be learned, and you don’t have to be bald or gray to teach the lesson.

So, as I explore Italy, I have a renewed sense of the value of new experiences and new knowledge and the ways those experiences can enrich my life and the lives and businesses of my clients. I may have seen darn near everything under the sun as it relates to turnaround and business, but every star out there is a sun so I suppose there’s a lot left to learn.

What new lessons have you learned?

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If the Shoe Doesn’t Fit, We’ll Make It Fit

We’ve all heard the phrase, “If the shoe fits…” meaning, if you’re accused of something (good or bad) and that deed fits your m.o. then it was probably you, because, well, the shoe fits.

In turnaround, the shoe rarely fits. I’ve either got a size 12 company with a size 8 shoe or a flat-bottomed foot with a big-arched shoe. Either way, the shoe doesn’t fit.

But in turnaround, we do what we can to make it fit.

We get creative with shoes. Perhaps we lop off some toes to make the shoe fit, or maybe we cut the end of the shoe off.

Whatever the case, it’s not the job of a turnaround professional to complain that what they’ve been given doesn’t fit right or work the way it should. If you like things to be neat when you arrive, don’t get into the turnaround business.

It’s our job to make the creative deals and think constructively about how to make things work that don’t appear to work. If you want to start thinking like a turnaround professional to get more working at your business than is already, remember that if the shoe doesn’t fit, you’ll have to make it fit.

Do your shoes fit?

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5 Warning Signs That It’s Time to Call the Turnaround Expert

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.
In business, it can be hard to see the forest through the trees, especially when it’s night time and you have no flashlight, the only supplies you have left are bubble-gum and a rubberband but your wife always tells you you’re no MacGyver, and the forest creatures are attacking you with cries of “blood!”
If you just said, “That sounds about right,” or “What the heck is this guy talking about” then you may want to read these 5 warning signs and see if it’s time to bring in some professional help.
  1. Fatigue – yours and your creditors. One late Friday afternoon, you’re beat, and you realize that you’ve spent the entire week talking to your vendors. You’re not placing orders or negotiating terms. You’re not swapping stories; you’re begging for extended credit terms. You’re pleading for deliveries without knowing how you’ll pay the over-90-day balances. You’re talking to the credit manager, not the sales manager.  And you have a new bank officer visiting Monday morning from some new department called “special assets.” This is creditor fatigue.
  2. You’re out of new ideas, and the old ones don’t work. You used to be able to cajole deliveries from vendors based on a promise, and you could make your promise reality. Not so anymore. Your product collateral looks old and tired. Your website’s most recent news refers to a 2008 press release about a new salesman (who you fired in 2009). And worst of all, you haven’t anything new to add that you want to share.
  3. A different look in your employees’ eyes. The old-timers wonder where your magic went. The newbies wonder how you ever got anywhere.
  4. Longer hours, less progress. You haven’t had a vacation in three years.  The lake/mountain/beach house is just a pile of cancelled checks and fond, but fading, memories. You’re missing ballgames and ballet recitals with your children. You haven’t had a nice dinner with your spouse since your anniversary; but maybe it was the anniversary two years ago. And the inventory in the warehouse seems to be growing in size and dust.
  5. Less cash, more debt, fewer receivables, more payables. You’re calling customers and finding they aren’t paying because your shipments are late/wrong/incomplete. Bankers’ reference letters refer to your account as “low five figure” as opposed to “high six figure.” You ask your CPA /attorney/friends for some advice on a new banker “who understands this terrible economy/insane competition/horrible cost pressures” better than the banker you’ve been with for ten years.

If any of these describe what you’re seeing, it’s time to call your friendly neighborhood turnaround professional.