Company turnarounds are a big part of what I cover. There's clearly a process that seems to work far better than others. Based on what I saw at BMC Engage, the first BMC conference this decade, and have learned over the last year of executive meetings, Bob Beauchamp and his team have done an impressive job. If it weren't for the fact that BMC plans to go public again I can hear Michael Dell in my head, screaming, "Don't do it!" I could easily say this turnaround is complete.
(Note: The author services BMC under a contract with Valley View Ventures. This work does not include consulting on BMC's turnaround effort.)
I'm also struck by the contrast between BMC and other turnaround efforts in progress (such as HP) and past famous turnarounds (such as GE). I'm particularly fascinated about what people take away from these efforts. Even though we have plenty of good examples, most CEOs, including Yahoo's Merissa Mayer, seem to avoid the best practices others have painfully learned.
Get a CEO Who Cares About More Than Money
Beauchamp told the story of his turnaround both in a general session with analysts and in an interview discussion that followed. I think of many CEOs as poseurs and fools, and only a handful as good people. Beauchamp falls in the latter class. I don't care for CEOs who seem to think they are royalty and focus more on their compensation and image than the care and feeding of their company and employees.
Pointing out the CEOs who I think are pond scum would be an expensive practice, but pointing out the ones I see as good people, such as Beauchamp, sets them up as a better example for others (I hope). If you do business with BMC, or are considering it, you should try to meet Beauchamp.
The process Beauchamp took to recover BMC shows his good side. The first phase of most turnarounds is ensuring there's enough cash to execute. If you don't have the resources, you can't hire or hold onto good people or pay for the marketing you need to get folks to buy your products or, if you're public, invest in the firm. That's why it was so critical for Steve Jobs to get $100 million from Bill Gates early on in Apple's turnaround process that opened to the door to other investments and bought Jobs time to fix the firm.
Beauchamp, on the other hand, took the company private and found an investment firm that didn't want to break up the company up and sell it in parts. That's an easy path it can generate a lot of cash but it isn't very humane given that you put a lot of people out of work and fracture the relationship with customers who had your trust. Bain Capital, often regarded as the break-up-the-company type, actually backed the firm's desire to go private.
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