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Welcome to the shallow end of the corporate gene pool

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Darwin was right. Evolution isn’t a theory, it’s alive and well in Corporate Australia.

The last few months have been pretty hard. I’ve been involved in working with a number of ‘distressed’ companies and it’s obvious that a lot of the people running companies in Australia should not be.

You might ask, “How can a techno-wonk make such sweeping pronouncements about the business landscape?”

I’ll let you into a dirty little secret: the techno-wonks who understand how a business works and aren’t interested in “feeds and speeds” generally have a better understanding of the strengths and weaknesses of any business than others closer to it.

Why? Technology is ingrained into every business process. To deliver solutions that provide efficiency and enable streamlining and improvements to be made, these “techno-wonks” need to know how things work at least as well as the business unit managers — better, in some cases.

Now I’m not talking about someone that thinks a new version of Windows is akin to the second coming of the messiah. I’m talking about someone that understands manufacturing, distribution, sales cycles, marketing, finance, import, export and operations management. They don’t need to be able to do it all. They just need to understand it.

These people are rare and when you find them you want to keep them — they’re valuable to your business, but only when you listen to them.

Anyhow, I was onsite with a team in Queensland, having been brought in by the bank to check the place over. The bank wanted to know, “If we let them continue to trade, is there any chance of improvement or do we shoot them like a horse with a broken leg so we can get our cash?”

When we arrived, the staff knew we were a triage team called in to determine whether they should receive emergency surgery and a chance at life or a shot of morphine and a painless journey to oblivion.

The Managing Director was big, brash, loud and at pains to explain that he was the one who knew it all and we should just sit back and listen to him.

His Financial Controller was a Chihuahua — not a “yes” man, more of a “Please let me bathe in your reflected glory” man. Given half a chance he would have had knee pads surgically implanted.

It didn’t take long to find that the major failing of the business was these two boneheads. The Financial Controller would do whatever it took to keep the boss happy and all he was interested in was proving what a “big swinging dick” he was and getting drunk on bank provided credit.

While the money tap was turned on, everything was good. Then the bank turned off the tap and said “Live within your means.” Then the wheels fell off.

It didn’t take long to figure out what had happened. Their financials were a mess — sub-ledgers didn’t reconcile back to the General Ledger, the cashflow forecast was a dismal vomit of unrelated numbers, the asset register carried assets that were well past their effective life, if they still existed at all. Their budgets looked like they were operating like Jedis assuming the force would be with them. It wasn’t.

The Sales Manager openly told everyone that his budget was unachievable due to the fact that the MD and the Financial Controller did the budgets because “they wanted to show the bank the numbers it needed to see”.

The whole team met with the MD a couple of days after he was given the report that was going to be given to the bank.

He went bananas! He demanded wholesale changes be made to the report. He told the team they were wrong, that the report was a “window into hell”, that they were only interested in lining their own pockets and not interested in working towards a “positive resolution” to the problems.

He’d even explained how he and the Financial Controller had corrected the team assumptions and reworked their numbers because they were just wrong.

When he was asked by the team about his financials and why they did so much in spreadsheets and not in their business system, he said, “These systems have too much detail. They don’t let us react. They stop us from doing business.”

Everyone from the team just shook their heads. This guy just didn’t get it. He was the MD and no one was going to tell him anything. He was the source of all knowledge and everyone else was wrong.

The company was put into administration a week later. The good news was that someone bought the company and kept the staff on and the last I heard they were doing better — except for the Chihuahua. He tried on his spineless routine with the new management team, so they fired him.

The 1% Spend is written by a prominent Australian I.T. consultant who is choosing to remain anonymous (and candid).

Photo: brian.gatwicke

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