This book is about management, and how it can sow seeds of success or seeds of failure. It is also about the importance of qualitative goals and decision making and how to back them up with quantitative analysis and sanity checks. Over the next 14 chapters, I share the insights and lessons I have learned—both those I have learned from others and those I learned in my time as a turnaround CEO saving companies on the brink of failure.
Over the years, I have led companies to successful turnarounds and their subsequent sale. I have turned bankrupt companies into cash cows. I have identified material flaws in companies’ business models and successfully repositioned them.
In one instance, the flaws were so critical that I led to a company’s closure—a company that many perceived as a great investment. My reason? The basis on which people thought the company was a good investment was faulty; the company had been built on sand, not rock. Management had neglected to look at the full market food chain of which it was part, and so hadn’t seen the oversupply that doomed the company. Three months after the company was closed, my analysis proved correct—the market collapsed.
It wasn’t only the management that overlooked the oversupply problem; market forecasters did as well. I hadn’t relied only on their conclusions; I analyzed their and other information and drew my own conclusions.
Ideally, the people who have access to all the information—such as CEOs—should be the ones making the decisions, and they should do so after carefully analyzing all their information, not only relying on other people’s analyses.
In practice, things aren’t that simple. People cling to comfort zones, to social pressures and expectations. We are prisoners of the professional and social webs to which our lives are attached and on which they depend. We fear stepping out of the “mechanics” of life and the inertial loops dictated by our pasts and by our environments.
And that’s not the way to succeed.
To succeed, we need to form our own ideas and opinions and make independent decisions. We need to break out of our comfort zones. In both our personal and our professional lives, we need to base our decisions first and foremost on qualitative goals and visions—not only on quantifiable numbers. Ask questions like are we leading in the right direction? Numbers can’t tell us, but our hearts and guts can. What numbers can tell us is whether the techniques we’re using to go in a certain direction match up with the reality of, for example, funding.
In our personal lives, we must ask these questions for the sake of ourselves and our families. In our professional lives, we ask them on behalf of our companies.
There is no single management theory that applies to any company in the world. There is, however, one practical (and hopefully successful) management practice for each company: the leadership, thinking, and execution that the CEO and his or her executives instill.
This book shares experiences, qualitative concepts, and tools to simplify thinking and the execution of managerial tasks. While this book describes corporate dilemmas, its high-level concepts are applicable in all facets of our lives, including government, security, health, non-profit organizations, education, and our personal lives.
I’ve done my best to make this book clear and easy to read—and as simple as all things in business and life should be.