Turnaround Management Journal 1 2012 Restructuring Transformation Lymbersky Turnaround Management Society

Turnaround Management Journal
1st issue 2012
Dr. Christoph Lymbersky (editor)
Turnaround Management Society

Impressum / Editors / Authors
Issue 1, 2012
Dr. Christoph Lymbersky, MBA, MAcc
(editor & author)
Dr. Mike Teng (author)
Dr. Erick Rick Johnson (author)
John M. Collard, CTP (author)
Mark Blayney (author)
Marc Wagner (author)
Harry Green (author)
Short Notes by:
Matt Gallo
Simon Vokov
Samantha Lewers
Clive Sexton
Leanne Hoagland-Smith
Mark Fackrell
Rockwell Marsh
Torben Rick
Internview: André Lohn
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2

3
A word from the editor
Dear valued readers, members, and friends,
Welcome to the first issue of the Turnaround Management Journal in 2012.
This year has been full of surprises, extremes and uncertainty. Some economists see the
world economy as being out of balance or on the verge of a new order. In Europe one coun-try
after another seems to be unable to keep itself running, and the expenses of most coun-tries
have been higher than income for years. This situation would be unacceptable for any
company, but politicians do not accept accountability for their poor decisions, bad judgment,
and spending billions that their countries do not have. I would argue that most readers of
this journal would manage a country’s finances better, or let’s say in a more sustainable way,
than most politicians do.
In this context, I am proud to belong to a professional guild that helps rescue failing busi-nesses
and develops new and creative strategies that save jobs by the thousands and help
companies to adapt to a changing and more risky environment. Our projects are no longer
only about saving companies from immediate insolvency: There is a growing awareness that
our knowledge gleaned from helping failing businesses can also be used to prevent crises
and to prepare companies for the uncertain times ahead. In short, I see hope for the future
Schleckers and American Airways that do not seem to learn from their mistakes. Aren’t the
easiest mistakes to avoid the ones that we have already made?
I hope you enjoy reading this issue of the Turnaround Management Journal as much as we
enjoyed putting it together.
With warmest regards from Hamburg, Germany,
Dr. Christoph Lymbersky

4
In this Issue
The Chasm of Change „Restructuring The Goliath“
3
Introduction
by Dr. Christoph Lymbersky
by Dr. Eric Rick Johnson
7
Evolution Management: Managing Constant Change in Corporations
by Dr. Christoph L 13 ymbersky & Marc Wagner
Building Value In Companies to Prepare Them For Sale - Investing In Dist-ressed
Opportunities
by John M. Collard 17
Admiral Zheng He – the Collaborative Transformation Expert
21
by Dr. Mike Teng

5
Keeping American Airways up in the Air
48
Do We Achieve Good Corporate
Governance by Improving Bad
Governance?
by Harry Green
55
Rescuing Schlecker: The Fall of
an Empire and Ways to turn the
Company around
59
Buying a Business to Turnaround:
Making a Turnaround work
by Mark Blayney
65
Member Interview with
André Lohn
67
Turnaround ManagemSehnot rJto uNrnoatles
Corporate Bankruptcy - When Should a Busi-ness
34
File For Bankruptcy? by Matt Gallo
Chapter 11 Bankruptcy - Can Restructuring
Debts Save a Business? by Simon Vokov
Cash is Oxygen During the Restructuring
Process by Dr. Mike Teng
Comprehensive Solution for Under Perfor-ming
Firms by Samantha Lewers
Results of the Impact Executives´s Survey by
Clive Sexton
Healing a Hospital - The Turnaround at Sou-theast
Georgia Health System by L. Hoagland-Smith
Managing Overhead by Mark Fackrell
Buying Good Businesses in a Bad Market by
Rockwell Marsh
20 Change Management Mistakes to Avoid by
Torben Rick

The Chasm of Change -
“Restructuring The Goliath“
Changing out management does not guarantee change in organizational behavior. You
must take proactive steps designed to create new organizational behavior.
Richard L. Daft one of the country‘s reco-gnized
academic leadership experts raises
the question, „What kind of people can lead
an organization through major change?“ A
Turn-A-Round restructuring qualifies as
major change and requires transformational
leadership. Daft points out that this type of
leader is characterized by the ability to bring
about change through innovation and creati-vity.
This type of leader motivates people to
not only follow their lead but to believe in the
vision of corporate transformation, the need
for revitalization, to sign on for the new vision
and to help institutionalize a new organizati-onal
process.“ Daft points to four principles
in discussions about leading an organization
through major change. These four principles
are the foundation of the restructuring Turn-
A-Round process.
1. Create a compelling vision
2. Create a new organization
3. Mobilize commitment, Empowerment
4. Institutionalize a culture change
Caution------Beware of the Dip
A „Transitional Performance Dip“ is com-mon
by Dr. Eric Rick Johnson
founder of CEO Strategist LLC, executive choach
when introducing major change accom-panied
by a culture shift. Performance most
commonly gets worse before it gets better.
There are four phases of the transitional dip
with associated cause. They include:
Denial--- Confusion exists, feelings of being
overwhelmed, acting like nothing is different
& checking out are common employee reac-tions
in this phase. Communication and sha-ring
of information is critical to overcoming
this type of employee reaction
Resistance--- Complaining, blaming others,
spreading rumors, frustration, anger and er-ratic
performance are common employee re-actions.
Again, communication, understan-ding
and listening skills are critical during
this phase of the transition.
Acceptance--- Renewed energy starts to be-come
evident, optimism appears and doubt
begins to dissipate. Excitement and risk ta-king
become evident. This is when the visi-on
must be restated and shared with every
employee taking the time for full explanation
and answering all questions.
available online at www.turnaround-management.com
Turnaround Management Journal (1) 2012
7

Commitment--- Discretionary energy is re-leased.
Employees become action oriented
toward new goals. Ownership of the vision is
now company wide. Rewards and reinforce-ment
are essential during this stage.
The length of time or „depth & width of the
dip“ depicting this phenomenon cannot be
accurately predicted due to the complexities
that determine it. Factors contributing to the
length of time before the change efforts begin
to show improvement can be impacted by the
following factors:
• Magnitude of the structural changes
• Success of the communication to all em-ployees
• External environment factors
• Critical mass of the company itself
• Competency of the middle management
group and their experience with structu-ral
and cultural change
• Competency of the executive staff and
their people skills
• Effectiveness of leadership at all levels
• Severity of the financial crisis or level of
financial success
• Timing
Change Process
The restructuring change process begins with
the strategic restructuring of the organizati-on,
which is required to „Stop the Bleeding.“
This process starts with the immobilization of
the old culture. This is mandatory, as intro-duction
of change into any existing culture is
difficult at best. Introducing change into a lo-sing
or stagnant culture is almost impossible.
This change must deal with organization the-ory,
social psychology and business history. It
must be dynamic and include the introduc-tion
of fresh new leadership. This is a beha-vioral
process. People can create change but
people also resist change. The change process
introduced must answer the question, „How
do we get from here to there?“ The answer to
that question is your new vehicle for success.
This vehicle includes the restructuring plan,
individual one-year departmental plans and
every strategic initiative developed by the
new management team. Most importantly,
this new vehicle is submerged in the empow-erment
theory releasing individual employee
initiative. The plans must be unified, simp-le,
consistent and universally understood by
everyone. Most of the change that has been
introduced must be induced change versus
autonomous change. Autonomous change
has a life of its own. It proceeds due to in-ternal
dynamics and follows its own course.
It is not easily controlled as it forms its own
dynamics. Induced change is calculated and
planned. It can be controlled if buy in is ge-nerated
through sincere communication and
employee involvement. Each step along this
path will be accompanied by distinct chal-lenges.
As questions arise, management must
be prepared to answer openly and honestly.
While the old culture is suspended, change
can thrive under the right circumstances. It
is the responsibility of the executive team to
insure that these circumstances exist. The pri-mary
ingredients that create the right circum-stances
include open honest communication,
empowerment, risk taking, acknowledgment
and reward.
Organizational Behavioral Process
(OBP)
This is basic to creating change, and it beco-mes
an important part of the new vehicle for
success. OBP may be described as the wheels
of the new vehicle. This process will carry
8

9
the organization on to new heights, new ac-complishments.
Organizational behavior has
its roots in organizational theory and group
dynamics. People are the most important in-gredient
to every organization and the orga-nizations
behavior. People and how they are
treated will reflect the organizational charac-teristics,
the way it acts and interacts with its
own people.
Empowerment, the decision making process
and the communication channels are examp-les
of how the organization interacts with its
people. Organizational behavior is not easy to
change. That is why it is so important as men-tioned
earlier to immobilize the old culture
to introduce change. The behavioral process
of the organization can withstand personnel
changes. In other words, changing out ma-nagement
does not guarantee change in orga-nizational
behavior. You must take proactive
steps designed to create new organizational
behavior. The new vehicle is part of that. It
includes, focused specific objectives, open
channels of communication, empowerment
and a sincere respect for the individual em-ployee
and his contribution to the organiza-tion.
Organizational behaviors become generaliza-tions.
They are discovered from observations
of everyday work habits and they have no in-dependent
existence apart from the work pro-cesses
in which they appear. They are difficult
to identify but they are extremely important.
They affect the form, the substance and the
character of the work processes themselves.
They actually affect the way the work process
is carried out. They are different from culture
because they represent more than just values
and beliefs.
They actually are involved in the sequences
producing work. The decision making pro-cess
is a major characteristic of the behavio-ral
process. The decision making process is
a much studied process beginning with the
studies of Chester Barnard and Herbert Si-mon
who argued that organizational decision
making was a distributed activity, extending
over time and involving a number of peop-le.
In other words, decision-making is not
the personal responsibility of a single mana-ger
but a shared, dispersed activity that they
only need to orchestrate and lead. This is still
a surprising and often unaccepted theory of
managers today.
The Eight Road Blocks to the Change Process
1. The lack of a sense of urgency
2. The lack of buy-in, a coalition of support
3. An unclear vision
4. Failure to communicate the vision
5. Failure to provide resources and remove
obstacles
6. Not systematically planning and creating
short term wins
7. Declaring victory too soon
8. Failure to anchor change in the culture as
it is occurring
Sense of Urgency
Success at anything requires a sense of ur-gency,
a commitment to accomplishing so-mething.
If employees don‘t have this sense
of urgency, complacency can become an is-sue.
To meet difficult challenges, to excel at
anything, to create competitive advantage it
is absolutely essential that employees release
their discretionary energy toward achieving
company objectives. Discretionary energy
is that extra that you can‘t ask an employee
to give but is automatically given by those
employees that have a sense of urgency. Of
course, no employee will release that discreti-

Empowering Others to Act on the Vi-sion
When critical constraints or roadblocks are
identified, they must be removed or over-come
quickly. This means allocating resour-ces
accordingly. Systems or structure that can
undermine the change must be eliminated.
Empowerment involves trust and allowing
people to use their initiative and creativity.
Planning for and Creating Short-Term
Wins
Milestones need to be set up to mark pro-gress
and allow victory celebration along the
change path. Success breeds success and ex-citement
breeds‘ excitement. Create that suc-cess
and excitement by setting interim goals
that can be achieved and celebrated. Recogni-ze
and reward employees accordingly that are
part of the accomplishments.
Declaring Victory too Soon
Interim success and short term victories are
important but don‘t spike your own Kool Aid.
Be realistic and keep your long term goals in
sight. Consolidate those short term improve-ments
to produce continuing change. Use in-creased
credibility to change systems, structu-res,
& policies that don‘t fit the vision. Hiring,
promoting, & developing employees who can
implement the vision is essential to continued
success during a major change effort. Reinvi-gorate
the process with new projects, themes,
and change agents.
Institutionalizing New Approaches
Success must be anchored as it occurs and
then built upon by articulating the connec-
onary energy for a leader that has not earned
their trust and their respect. A leader will not
be respected by the employee until he shows
respect for the employee. A leader will not be
trusted by the employee until he shows trust
in the employee.
Forming a Powerful Guiding Coalition
Success is not an individual accomplishment.
Initiating change requires buy in and agree-ment.
10
A group of believers, achievers and
team players must be assembled to not only
support the change process but to drive the
process. The group must function as a unit
showing unilateral support of the change pro-cess.
Examination of market and competitive
reality is part of the challenge as well as iden-tifying
and discussing potential crisis, critical
constraints and major opportunities.
Creating a Vision
Success at initiating change starts with the
creation of a compelling vision that provi-des
a roadmap for the change. This roadmap
clearly answers the question „What‘s in it for
me“. WIIFM. The vision is supported by the
development of strategy and action planning
to achieve the vision.
Communicating the Vision
Success requires leadership and leadership
without communication is like a gun without
a bullet. It looks impressive but it can‘t do
anything. A specific communication strategy
must be outlined and acted upon to insure
that all employees are aware of what the visi-on
is and how it is expected to be accomplis-hed
including defining individual roles and
contributions. It‘s about buy in.

tions between the new behaviors and corpo-rate
success. Leverage this success to ensure
leadership development and succession.
Make no mistake, effective leadership is about
creating change. This is true in every circum-stance,
whether a company is facing restruc-turing
or dealing with the challenge of accele-rated
growth. Change is the defining moment
that identifies true leaders from imposters.
To become an effective leader, understanding
change, creating change and most important-ly
managing change is the first prerequisite.
About the Author:
Dr. Eric Rick Johnson (rick@ceostrategist.com)
is the founder of CEO Strategist LLC. an expe-rienced
based firm specializing in Distribution.
CEO Strategist LLC. works in an advisory capaci-ty
with distributor executives in board representa-tion,
executive coaching, team coaching and edu-cation
and training to make the changes necessary
to create or maintain competitive advantage.
11
www.JuliaStarp.de

12
Evolution
Management
5mil BC 3 mil BC 1mil BC 0 1000 2012

Evolution Management: Managing Constant
Change in Corporations
Management Consultant, Researcher and Director of the Turnaround Management Society
Corporate Transformation Expert and Junior Partner at Detecon International
These changes within a company that are continuously essential to keep up with tech-nological
and environmental changes need to be handled by “evolution manage-ment”
or a “corporate evolution program” consisting of a variety of projects and
measures to stay competitive and to prepare for the future. These projects can lead
to more effective production processes, replacement of outdated assets, new pro-ducts,
and training. What they all have in common is that they are a certain part of a
goal-oriented program for the company to reach the next level in corporate evolution.
While working for different consulting com-panies
in the corporate restructuring sec-tor,
we have heard many different terms for
“restructuring a company”. In small- and
medium-sized businesses, the more serious
the crisis becomes, the more the term “tur-naround
management” is used. Certainly tur-naround
management suggests some urgency
and pressure to change the situation causing
the company to struggle. The Turnaround
Management Society has quite a distinctive
definition of turnaround management. ...
“A turnaround transforms a company that
has a general lack of resources and/or stra-tegic
disposition and/or is in an abnormal
period to be profitable enough to support
its own operations and to have a strategic
chance to survive in its environment on a
stable platform for renewed growth.”
and by Marc Wagner
Most noticeable about turnaround manage-ment
is the fact that almost no company calls
it a turnaround while it is still caught up in
this process. Large corporations especially
will rarely admit that they find themselves
in a turnaround situation because doing so
would also imply that something has gone
terribly wrong in the past and somebody has
to take the resulting responsibility. This, how-ever,
does not necessarily have to be true. A
turnaround can also be conducted to adapt
to changes on the market, even though ad-mittedly
there is usually some financial pres-sure
involved. At the same time, there is no
shame in getting into this situation as long as
management is willing to admit that a turna-round,
a change in strategy is necessary.
Still, the most frequently used term is “cor-porate
restructuring”, which sounds a lot less
13

urgent and more like “we are just adjusting to
a change” on the market or in customer de-mands.
Preferably the trigger is something
external, but causes are rarely mentioned,
even though they would be very important
in eliminating the underlying problems. Cor-porate
restructuring in the sense of adapta-tions
is constantly necessary so any related
announcements are less likely to cause alarm.
Recently, however, there has been a trend to
soften even restructuring and to call it “trans-formation
management”, a term that has even
less meaning and an even broader definition.
It sounds almost harmless as well as necessa-ry.
It is the perfect mask to describe efficiency
measures as well as cost-cutting and process
improvements. Don’t get me wrong, a process
improvement is a transformation in a sense,
but we like clear words that say and descri-be
what is necessary. If somebody asks me if
I have had any experience in transformation
management, the answer is yes, we certainly
have, but who has not had experience in some
kind of transformation. The term has become
so indecisive that no one is able to define it,
nor does anyone really know what it is suppo-sed
to mean and describe.
We are declaring the need for a clear distinc-tion
between the terms. For reasons of simp-lification,
we want to introduce first another
term and then show how this helps to facili-tate
differentiation. we ask my readers to be
patient and bear with us; there will be a happy
end.
The additional term we want to coin is “evolu-tion
management”. Just like biological species,
companies are subject to natural selection of
the fittest and best (see Darwin’s popular the-sis).
In business, we call it market selection
and competitive advantage. It will not sur-prise
anyone to hear that corporations need
to evolve continuously from one stage to the
next to stay up to date with Porter’s constant-ly
changing five forces (also acknowledge the
growing fields of organizational learning and
absorptive capacity).
New competitors may put pressure on pro-duction
costs; customers may demand better
quality or lower prices or simply change their
preferences and taste. Internally, the compa-ny
needs to stay up to date with new develop-ments
in the industry. No company can afford
to rest on its laurels for more than a limited
time.
So we can define enterprise evolution as the
constant changes that a company undergoes
to keep its competitiveness at the same level
in the future, to maintain its high market po-
14

15
sition in comparison with the competition,
and to evolve from the status quo of today to
the status quo of tomorrow.
Managing this evolution is becoming more
and more important as the competitive envi-ronment
in which corporations operate chan-ges
more and quickly every year. About 120
years ago, American Bell, later At&T Long Li-nes,
built a telephone line between New York
and Chicago and continued to use this tech-nology
for more than 30 years. Today, Deut-sche
Telekom and every other phone compa-ny
regularly replace their network technology
every 3-5 years to keep up with technological
evolution and the changes demanded by cus-tomers.
This also means that processes, work-flows,
and organizational structures need to
change every few years. On a micro level, this
means hiring specific talent, changing job de-scriptions,
and more and more training for
employees. Many of the new positions did
not exist ten years ago… Today, there are even
signs in certain industries that corporate evo-lution
is not happening at intervals anymore,
but is instead a continuous process.
These changes within a company that are
continuously essential to keep up with tech-nological
and environmental changes need to
be handled by “evolution management” or a
“corporate evolution program” consisting of a
variety of projects and measures to stay com-petitive
and to prepare for the future. These
projects can lead to more effective production
processes, replacement of outdated assets,
new products, and training. What they all
have in common is that they are a certain part
of a goal-oriented program for the company
to reach the next level in corporate evolution.
Let’s stick with the example of Deutsche Te-lekom.
Measures a corporate evolution ma-nager
(or, in this case, office) might take to
maintain competitiveness would include tra-cking
changes in the industry, working with
strategic management, and evaluating possi-ble
scenarios for the future so that the com-pany
is prepared to deal with them. But this
office would also oversee, and in some cases
even implement, needed changes such as pre-paring
the company for the new LTE network
standard that will replace UMTS and 3G
networks. But it could also implement cost
reduction measures to stay competitive or
propose and oversee projects such as merging
departments, outsourcing, or raising the level
of efficiency of corporate processes.
Evolution management includes transforma-

tion projects and restructuring measures, but
with the goal of maintaining competitiven-ess.
In terms of a company’s life cycle, it starts
earlier than transformation management
and ends long before corporate restructuring
measures conclude. The key element distin-guishing
it from corporate restructuring is
that there is no immediate financial pressure
involved in evolution management.
The graphic above shows where evolution
management, corporate restructuring, and
turnaround management start and end in a
corporate life cycle diagram. In its early sta-ge,
evolution is by nature managed by the
entrepreneur. However, at some later point,
the entrepreneur either leaves the company
or needs to focus on running the company
more than on staying competitive. At this
stage, evolution management takes over, or
the founder becomes a “corporate evoluti-on
manager” (CEM) and hands the business
over to an experienced CEO. From the CEM
position, the founder can focus on his/her
strengths, evolving the company, developing
ideas and overseeing their implementation,
and keeping a fresh, unconventional look at
businesses processes with the aim of mini-mizing
any bureaucracy which might put the
company at risk of primarily managing itself
instead of its market. Corporate restructuring
takes over when the company experiences a
decline in core segments of the business; once
a corporate crisis giving rise to the threat of
insolvency becomes obvious, professional
turnaround management is necessary.
Evolution management is nothing new, but I
would ask that it be given more attention so
that the necessity for turnaround manage-ment
can be averted. After all, focusing on
something specific always starts with recog-
nition of the need and its definition. The next
step is to specify actions.
About the Authors:
Dr. Christoph Lymbersky
has founded three success-ful
companies. He currently
serves as the director of the
Turnaround Management
Society, where he is also en-gaged
in research projects,
such as the International
Turnaround Management
Standard (ITMS).
Marc Wagner is Junior Part-ner
and Senior Management
Consultant at Detecon Con-sulting.
Mr. Wagner serves as a cli-ent
partner for Deutsche
Telekom and has extensive
experience in restructuring
and transformation projects
in the telecommunication
industry.
He is also a founding mem-ber
of the Circle of Excellence Effciency. The Circle of
Excellence Efficiency can be reached at:
www.Excellence-Efficiency.com
„International Turnaround Management Standard“
Author: Dr. Christoph Lymbersky
ISBN: 978-3981216226
Publisher: Management Laboratory Press
Publication Date: 2012

17
Building Value In Companies to Prepare
Professionals guiding investors or looking to
invest in underperforming companies them-selves
should be aware of what to look for
and how to execute. The key to returns from
investing in underperformers and distressed
companies is building an enterprise with the
sole purpose of selling it at maximum value
- to concentrate on exit strategies from the
start.
First, seek enterprises at a precipice, not
those that have already fallen off the edge.
Look for those with critical capital shortages
and future potential, but avoid the pitfall of
investing in an insolvent company. Acquire
companies that can provide quality products
at competitive prices but are severely under-valued
due to ineffective management and/
or lack of market direction and penetration.
Take advantage of distressed-level asset pric-ing
and invest in exchange for large returns.
The infusion of capital put into the hands of
a leader with a sound strategy and return-on-
equity goal in mind can be a powerful
motivator.
Provide what future buyers look for:
• Consistency of businesses that create
value
• High probability of future cash flows
• Marketing-oriented management team
• Track record demonstrating ability to
sell and compete, develop, produce and
distribute products, thrive and grow
• Realistic return potential from their fair
entry valuation
Recovery Cycle
Whether you invest in a new entity or a port-folio
property gone bad, the recovery cycle is
much the same. This cycle starts with mis-management.
Then you need to determine
Them For Sale -
Investing In Distressed Opportunities
by John M. Collard
Certified International Turnaround Manager - Level D (CTP), and Past Chairman of Turnaround Management
Association (TMA)
Executing a turnaround is no easy task. Here are some guidelines to get a distressed and
under-performing company up to speed, so that you can sell it. There is a recovery and
rebuilding process, but the key to wealth creation and return on invested capital is to con-centrate
on the exit strategy from the very start.

18
the viability, invest, turn and ultimately sell
the property.
Determine turnaround viability by truly un-derstanding
what has caused the company’s
breakdown. Don’t be fooled by symptoms,
and never listen to current senior manage-ment.
If they knew what was wrong, they
would have fixed the problems.
Make certain that you have solutions to fix
the real problems that no one else has used,
perhaps because you can bring in new non-cash
resources or applications to influence
the revitalization. Take advantage of mis-priced
material inputs, labor, assets or capac-ity,
and intellectual property. Never “just add
cash,” and always implement new leadership.
Take Control
There must be a successful turn before the
entity can be sold. Always take active control
of the entity. Passive investing if managed by
prior management is like a placebo, and you
will lose your investment. Passive positions
are only acceptable if they contribute to an
investor pool that has an active lead par-ticipation.
Install a new chief executive with
transition experience in value-building situ-ations.
The executive should bring an objec-tive
focus and new perspective to complete
the cycle. This leader should demonstrate
expertise in:
• Managing crisis, transition and rebuild-ing
processes
• Shaping business strategy and financial
structure
• Developing management talent, building
caliber teams, utilizing and boosting ex-isting
resources
• Increasing sales and market share
• Maximizing return on capital
• Linking management performance to ul-timate
goals
• Developing incentive-based compensa-tion
programs
This leader must get directly involved in
making decisions to achieve the ultimate
goal - sale at increased valuation. The final
step to complete the turn is to hire a “mar-quis”
manager to lead the enduring team.
This permanent team adds to the value equa-tion.
Set strategies
Implement long-term strategies that will
survive your exit. One essential strategy is
to drive revenue by addressing the problems
plaguing the company and provide a road-map
to revitalization. You must establish a
new vision, distill this direction into con-crete
goals and objectives, and create a guide
for everyone to follow.
Build a quality management team
The company value increases sharply with
a strong, permanent, credible team that can
demonstrate its ability to produce consistent
sales, profit and cash flow results. Establish
continuity in the organization to allow eve-ryone
to expect orderly change and oppor-tunity.
Capitalize on available underutilized
human capital - those dedicated middle
managers who remain. Set up an incentive
structure that pays only when they accom-plish
the goals set in your long-term strat-egy.
Their incentive should be based upon
performance that will take the company be-yond
its sale. After all, the employees are the
assets for which your buyer is looking.

19
Acquire new business/sales
There are only two ways to increase sales, sell
new products to existing customers or sell
existing products to new customers. Most
underperformers have forgotten, or never
had, the basics of marketing and promotion.
Become market driven, adapt to changing
conditions and improve your competitive
position.
Establish a sound capital structure
Create reasons for investors to invest. A
sound strategy with a viable marketplace, ef-ficient
delivery and production vehicles cou-pled
with a cohesive management team will
entice the investment community. Securing
new capital becomes much easier when in-vestors
see high probability of return and a
viable exit strategy.
Implement processes
Use processes to drive the business and con-trol
the day-to-day environment. Focus on
the important things - controlling cash and
costs, increasing sales and enhancing value
creation.
Exit
Know when to “cash out.” The greatest re-turn
on investment comes when the turn is
complete and the company is ready for the
next tranche to fund growth.
Remember that there’s a distinct advantage
to using professionals who bring C-level op-erational,
transactional and turnaround ex-pertise
together to determine what’s wrong,
how to fix it and how much to pay for it.
About the Author:
John M. Collard, Chairman,
Strategic Management Part-ners,
Inc., an Annapolis,
Maryland, USA-based turna-round
management firm spe-cializing
in interim executive
CEO leadership, asset and
investment recovery, corpo-rate
renewal governance, private equity advisory,
recovery fund management, and investing in dist-ressed
troubled companies. He is a Certified Tur-naround
Professional (CTP), and Past Chairman
of Turnaround Management Association (TMA).
John is an inductee into the Turnaround Manage-ment,
Restructuring and Distressed Investing In-dustry
Hall of Fame.
www.StrategicMgtPartners.com
Telefon: 410-263-9100

by Dr. Mike Teng
A company in financial difficulties must turn around from the path it has been following.
The three-phase corporate transformation process may be compared to treating a patient
who needs surgery, resuscitation and therapy.
21
Admiral Zheng He –
the Collaborative Transformation Expert
China’s greatest transformation expert was,
arguably, Admiral Zheng He. Zheng He (also
transliterated as “Cheng Ho”) served the
Ming Dynasty’s Emperor Yongle (Zhu Di)
and Yongle’s grandson,Emperor XuanZong,as
an overseas ambassador. Long famous as a
diplomat, Zheng He may also serve as an ex-ample
of a collaborative business executive
who utilized the three phases of corporate
transformation.
In contrast to autocratic monarchs or “lone
wolf ” chief executives, Zheng He exempli-fied
collaboration even when seeking a goal
with single-minded determination. This arti-cle
also examines how Jack Welch, the former
CEO of General Electric and renowned trans-formational
manager also used collaborative
efforts to bring GE to greater heights six hun-dred
years later. He also mellowed down his
style as a Neutron Jack in the earlier years of
his career to Transformational Jack, following
the footsteps of Zheng He’s art of collabora-tion.
Zheng He as a Role Model for Modern
China
China’s current and past leaders consider
Zheng He a pivotal example and praised him
highly. Hu Jintao, the President said: “In the
15th century, the Ming Dynasty sent Zheng
He to Australia and contributed greatly to the
economy of Australia”. Wen Jiabao, the Prime
Minister said: “Zheng He was a great diplo-mat.
All his voyages were to bring friendship,
wealth, gifts and technology to benefit the
countries that he visited. The Chinese are in-deed
kind and magnanimous.” Jiang Zemin,
President (1993 -2003) said: “Zheng He’s
voyages were very impressive. They showed
that the Chinese people were trying to make
friends with their neighbours and interact
with them for mutual economic and cultural
benefits. These resulted in the rapid progress
of the world.” Even the father of modern-day
China, Deng Xiaoping, the paramount leader
of the communist party said: “Zheng He dem-onstrated
that China needs to be open. The
Ming Dynasty was one of the more prosper-ous
era in Chinese history because of Zheng
He opening up China to the world.”
History showed that after Zheng He, China
was on the path of decline until it started to
open up again. It is not surprising that mod-

22
ern-day China which is the second largest
economy in the world has continued to adopt
Zheng He’s spirit of diplomacy and adventur-ism.
Zheng He had served the Ming dynasty: a
very prosperous time in China’s history. His
trade missions opened China to business op-portunities
with foreigners; after his death
China closed in on itself. Modern Chinese
economics seem to follow Zheng He’s game
plan by returning to international Asian mar-kets.
China has extended its reach, seeking
raw materials from Africa and North Amer-ica.
In addition, China now permits her peo-ple
to spend money abroad as tourists.
Corporate Transformation Techniques
A reminder about the three-phase corporate
transformation process may be helpful, be-fore
viewing Zheng He’s actions through that
lens.
A company in financial difficulties must turn
around from the path it has been following.
The three-phase corporate transformation
process may be compared to treatinga patient
who needs surgery, resuscitation and therapy.
Phase One: Surgery
The surgery phase is to restructure the com-pany
to face the new harsh realities. During
this phase, it involves cutting costs, improv-ing
operational efficiency and seeking a quick
increase in cash flow. This may involve reduc-ing
headcount, replacing first-class airline
flights with conference calls, or selling out-dated
goods at a discount (and terminating
warehouse leases). This phase is “ruthless”
since the corporation’s continued existence is
at stake. However, it must not be a mindless
cost-cutting exercise and improving opera-tional
efficiency; it must also prepare the way
for the next phases.
This phase requires a surgeon with a scal-pel,
not a butcher with a cleaver or swords-man
with a broadsword. It is not a burn and
slash exercise but rather calls for the surgeon’s
skill. As a surgeon needs a team of nurses,
so the turnaround executive needs a team to
implement the strategy and to assist in com-municating
the strategy to the employees. In
fact, communication is vital in managing the
negative emotions surrounding layoffs or cut-backs.
Timely and transparent communications can
raise morale, since people will rally around a
forthright leader who promises and delivers
decisive action. While the management team
has a role in communications, the turnaround
executive must deliver the top-level news di-rectly
to the organization.
A doctor does not delegate the task of deliver-ing
important information to a nurse to in-form
the patient; the doctor speaks directly
with the patient.
Phase Two: Resuscitation
The resuscitation phase is to revitalise the
revenues and the profits. It seeks new mar-kets
and new sources of revenue. This phase
must set and achieve the short-term goal of
returning to profitability. It must balance the
cost cutting from the first phase with the need
for expanding its market reach and sales rev-enues.
Some modern corporations are beginning
to learn to use digital social media. Even
for companies that are not formally going
through corporate turnaround, the learning
process is like experiencing a resuscitation
phase. Facebook and Twitter, whether medi-

23
ated by computers or smartphone text mes-saging,
call for historically new degrees of
honesty, openness, transparency and collabo-ration
with customers. Just one example will
suffice: a hotel chain learned of a bedbug in-cident
because a visitor used Twitter to com-plain
to friends. A company must establish an
online presence to monitor complaints and
deliver its own message.
The company must then be quick to respond
and honest in its dealings. Customers will
provide feedback; how will the company re-spond
to harsh criticism read by, potentially,
hundreds or thousands of interested bystand-ers?
Simply in terms of marketing, traditional me-dia
are saturated and often mistrusted. Build-ing
relationships with customers via two-way
digital media, like Facebook and Twitter, is
one avenue where customers may be found.
Another path is to co-brand or co-operate, as
found in the alliances between software com-panies
and mobile telephone manufacturers.
Microsoft and Google battle each other using
Nokia and others as partners.
Phase Three: Therapy
The therapy phase is to rehabilitate a strong
and healthy corporate culture. It consolidates
previous gains by instilling a new corporate
culture that seeks and adapts to new challeng-es.
This phase may introduce revenue sharing
or continuous improvement programs; it may
seek new ways for employees to cooperate
rather than compete.
During this phase, the corporate leader must
look toward the future and plan for the long-term
viability and growth sustainability of
the company. This is a phase to build a strong
corporate immune culture. In medical sci-ence,
we understand that the best way to fight
viruses is to build a strong immune system.
In corporation, the strong corporate immune
system is the corporate culture that is fast,
flexible and innovative.
The therapy stage is somewhat like the East-ern
view of traditional Chinese herbal medi-cine,
which seeks to balance and regulate the
flow of energy in the body.
Western medicine, by contrast, uses drugs to
treat specific ailments, often by killing disease
germs. Herbal medicine often takes a longer
view, seeking to strengthen the patient by im-proving
internal harmony. Corporate “thera-py”
must take a long-term view for sustain-able
growth.
The phase one and to some extent phase 2,
sit very well with the western medical sys-tem
which is ideal to treat acute diseases. The
phase three is one that parallels the Chinese
traditional medicine to treat chronic diseases.
Selective Techniques or Long-Term
Strategy
While the corporate transformation strat-egy
presents the three phases as a sequence
of consecutive stages in turning a business
around, it may be more useful to view Zheng
He as using specific techniques under the
right circumstances.
General Electric’s corporate transformation
under CEO Jack Welch provides a modern
perspective on the corporate transformation
strategy, and also has parallels to the voyages
and deeds of Zheng He during the fifteenth-century.
Although “Neutron Jack” started
transforming GE with great energyin the
1980’s, he did not become “transformational”
until later in his tenure. During the first phase,
or “surgery,” Welch pushed his executive team

24
hard enough that they got into legal trouble
for polluting New York’s Hudson River and
also for skirting financial ethics.During this
time, Welch may not have been a match for
Zheng He as a diplomat.
During the resuscitation and therapy stages,
Welch became less aggressive. Some execu-tives
would disagree with that assessment,
since Welch broke down the corporate feudal
structure wherein managers would pursue
their own goals within their own divisions,
at the expense of corporate development. He
also dismantled the financial controls that
prohibited most projects, no matter how
worthwhile. However, these changes permit-ted
and encouraged collaboration between
divisions, a synergy that was of great benefit
to the corporation.
“Transformational Jack” emerged towards
the end of his career, when he spent a signifi-cant
amount of time mentoring the next gen-eration
of leaders at Crotonville, GE’s educa-tional
campus. By fostering “the GE way” in
passing along the corporate culture to these
new managers, Welch more closely emulated
Zheng He’s development of his diplomatic
corps.
Internal or External Transformation
Normally the goal of Corporate Transforma-tion
is to save an organization by transform-ing
its mindset and culture.
Jack Welch is an excellent example of a leader
who transformed his company.
On the other hand, Zheng He’s mission was
to transform the attitude of China’s allies and
trading partners, rather than to change Chi-na’s
attitudes towards foreigners or about its
own politics or culture. Despite this, some of
his methods foreshadowed Corporate Trans-formation,
and his brilliantly collaborative
management style can still serve as an exam-ple
for modern leaders.With this in mind, it is
important to remember that Zheng He lived
more than five centuries ago. He did not have
a formal Corporate Transformation model to
follow. Instead, he put his tremendous spirit
into his voyages, combining his military in-sight
with the great humanitarian soul he so
obviously possessed.
Historical Background for Zheng He
Zhu Di usurped the imperial throne of China
in 1403 to become Emperor Yongle. Yongle
continued to follow the policies of his prede-cessor,
Emperor Taizu, with regard to foreign
relations. These policies could be summarized
as: defend Chinese borders against incursion;
maintain peaceful and friendly relations with
neighbouring countries; and encourage for-eign
trade, including the receipt of tribute
from allied nations.
China’s most important international com-merce
had included selling tea, spices, silk
and ceramics. Trade routes included overland
caravans and ocean-going trade. Since ceram-ics
were heavier than spices, these goods were
better suited to transportation by ship.
Emperor Yongle made one change, however.
He promoted trade by means of pro-active
diplomacy. His probable motive was to firmly
establish himself as the internationally rec-ognized
emperor of China; but the method
would strengthen both diplomatic and trade
relationships with a large number of other
countries. He assigned these tasks to Zheng
He.
Admiral Zheng He made seven grand voy-ages;
the first six for Emperor Yongle. Yongle’s
son halted these expeditions, but the subse-quent
Emperor XuanZong sent Zheng He
on one more. Between one hundred and two

25
hundred ships were involved in each voyage.
A typical visit from Zheng He would include:
• A public proclamation of the Emperor’s
mission statement
• Official visits with the local ruler, includ-ing
an exchange of gifts
• Provision of medical treatment to the lo-cal
populace, by the fleet’s medical cadre
• Enforcement of law, by capturing pirates
who preyed upon either the Chinese or
the local traders
Despite the success of his missions, Zheng
He did not become the first in a line of am-bassadors
for China. Subsequent emperors
changed China’s attitude from a policy of
open and frequent contact with foreign pow-ers,
to one of severe isolationism that lasted
about five centuries.
However, China has recently emerged from
its “bamboo curtain” with a renewed interest
in international commerce. Some have heard
echoes of Zheng He’s approach in these new
ventures.
Zheng He: Collaboration and Coop-eration,
Rather than War
Zheng He stood in contrast to Sun Zi (or Sun
Tzu or Sun Wu) who is famous for writing
The Art of War. Sun Zi emphasized defeating
an enemy. Knowledge and force were vital in
gaining victory.
Zheng He, on the other hand, served an em-peror
who pursued diplomatic relations,
peace and prosperity through commerce.
Zheng He collaborated with foreign leaders.
He won their cooperation through honesty
and openness.
It can be argued that Zheng He did indeed
start from a position of strength. It must
have been unsettling for a ruler to see an ar-mada
of over one hundred ships arrive for a
visit from one’s most powerful neighbour.But
even when Zheng He commanded his largest
fleet of 200 ships, they did not loot, pillage or
conquer. His major pursuits were diplomacy,
collaboration and commerce, never military
conquest.
Sun Zi lived and fought in sixth-century
China, prior to its unification from compet-ing
nation-states. In contrast, Zheng He was a
cosmopolitan traveller, well acquainted with a
variety of different cultures.
Although politicians and business moguls
might use Sun Zi’s The Art of War, it was writ-ten
primarily for military purposes. While
Zheng He had military clout, as an admiral in
command of a large fleet of ships, his concern
was diplomacy and commerce. Zheng He did
not conquer or occupy the countries he vis-ited,
nor did he annex them to China. Indeed,
his memory is still honoured in a number of
those countries, by means of monuments, rel-ics
and historical writings.
Sun Zi may have been a contemporary of
Confucius; some recommend studying The
Art of War from a Taoist viewpoint. Zheng
He’s religious views, on the other hand, may
have incorporated Islam.
Modern business is sometimes regarded as
cut-throat competition, and the win-lose par-adigm
is often invoked. There may be greater
wisdom, however, in seeking win-win en-counters.
Games theory shows that, in many
cases, long-term cooperation can yield better
results than ruthless competition.
With the Internet, and the spectre that Wikile-aks
might expose corporate as well as diplo-matic
secrets, business organizations should
emphasize sharing information in a way that
leads to mutual advantage.
Games theory explores some interesting

situations where cooperation yields a better
result than competition. The “Prisoners’ Di-lemma”
26
is well known. If one prisoner betrays
the other, the result is better for the betrayer
and worse for the other. If both prisoners stay
loyal to each other, they receive a minor pun-ishment.
However, if each betrays the other,
the result is very poor for both. The best long-term
strategy, if the two players will “play the
game” several times, is to remain loyal. Only
in a one-time situation might one person
benefit by betraying the other. One is unlikely
to take over a rival through one marketing
campaign, so it makes sense to plan for the
long term. It is even less wise to bankrupt a
supplier or customer by entering into a lop-sided
contract. Therefore Zheng He’s coop-erative
approach is more suited to business in
the modern-day globalised era than Sun Zi’s
competitive style.
Zheng He as an Example for Collabo-rative
Corporate Transformation
Zheng He was not a business executive, saving
a corporation from bankruptcy. He did, how-ever,
use many of the techniques espoused
by the Corporate Transformation in its three
phases of surgery, resuscitation, and therapy.
Although Corporate Transformation does
progress from one stage to the next, Zheng
He used the techniques at different times and
according to his immediate circumstances
and needs.Zheng He also used a more collab-orative
style than would be expected for his
times…or even in modern times.
Zheng He and Surgery Techniques
To use “Surgery” techniques requires a lead-er
who is bold and resolute. Clear directions
must be given, and the leader must ensure
that orders are carried out. The situation re-quires
decisive measures, because failure in
this stage spells the end of the mission.
Zheng He used “Surgery” techniques in two
ways: in preparation and in law enforcement.
The Surgery of Preparation
Serious, careful and meticulous planning is
required to sail a fleet of over a hundred ves-sels.
Trade goods, provisions and labour are
obvious pre-requisites; but so are plans for the
weather and ports for layovers and repairs.
Zheng He received explicit instructions from
the Emperor as to which countries to visit.
Zheng He then had to ensure that ports were
ready for ships to dock; that repair facilities
would be available; and that there would be
land available for temporary warehouses.
Even more in the fifteenth-century than today,
ocean travel depended on the weather. Zheng
He made use of monsoon winds to power his
sails; this required timing the visits and plan-ning
on layovers when the winds would not
blow his way. His voyages typically took two
years, based on the weather conditions.
As one example of staffing: the fleet employed
one medic for every 150 or so sailors and
staff personnel. The medical team treated the
masses at each port of call, as part of Zheng
He’s diplomatic overtures.
Zheng He and the emperor also ensured that
he had a team of high-level envoys who were
deployed on side missions during the voy-age.
With the right staff available, Zheng He
could leverage his abilities. This is an obvious
parallel to the way of a surgeon who leads the
surgical team: anaesthesiologist, anaesthetist,
scrub nurse, circulating nurse etc.
Zheng He had to keep a relentless focus while
preparing for each voyage. He had to remain
on top of details, and to insist on results. In
command of up to 27,000 people, Zheng He

27
could not afford wasted efforts or delays.
In such a large operation, delegation of au-thority
and responsibility is paramount for
success. Zheng He led his team by giving
them opportunities to learn, to take responsi-bility,
and to make preparations for their roles
in the voyages.
Actually Emperor Yongle had prepared the
way for Zheng He, by sending out a recon-naissance
voyage two years before Zheng He’s
first. No doubt Zheng He learned from, and
improved upon, the Emperor’s preparations
for that mission.
Zheng He also used a continuous improve-ment
process. He deliberately found ways to
improve on his team’s operational efficiency
after each voyage. This was especially impor-tant
because many of his men were soldiers,
medics or diplomats, not sailors. As an ex-ample,
his first voyage did not visit nearly as
many countries as subsequent voyages. They
could learn from the first voyage and apply
those lessons to the later ones.
The Surgery of Law Enforcement
During his voyages,Zheng He also arrested
several pirate bandsthat had been identified
by the emperor. This is an obvious case where
decisive action was required. By ridding the
waters of these pirates, particularly at the
Strait of Malacca, Zheng He created safe pas-sage
through the straits, as well as increasing
Ming status in Southeast Asia.
It is essential to note that Zheng He was care-ful
to maintain good relations, both with the
local rulers and with the emperor, while per-forming
his policing duties. He had to avoid
antagonizing the locals or harming innocent
bystanders. Like any CEO, he had to ensure
that the Chairman had the final verdict in
dealing with captured pirates.
Had Zheng He dealt with the pirates without
first gaining the approval of the local rulers,
his police actions could have been seen as ag-gression
against them. Had he executed the
pirates, the Emperor would have been de-prived
of his opportunity to exercise justice.
In collaborating with his Emperor and with
the local authorities, Zheng He advanced his
primary mission of fostering good will and
respect for the Chinese among the people he
visited.
In both roles, as a planner and as an agent of
law enforcement, Zheng He demonstrated a
corporate surgeon’s precision in planning de-tails,
clarity of instruction to subordinates,
and resolute diligence in acting.
Zheng He and Resuscitation Tech-niques
“Resuscitation” shifts the focus from the im-mediate
to the medium term. It builds on past
success from the “Surgery” phase. In a corpo-rate
setting, cash flow would still be critical,
however building the future cannot come at
the expense of current revenue.
Clearly Zheng He was a master of resuscita-tion
techniques, as shown in five areas: devel-oping
markets; expert salesmanship; public
relations; serving customers’ interests; and
making investments.
Resuscitation through Developing
Markets
Zheng He “developed new business” by going
to his “customers.” He found new opportuni-ties
by strengthening old ties with neighbour-ing
countries. This push for new and expand-

ed markets is in keeping with the corporate
resuscitation phase.
A major part of Zheng He’s work could be
considered “resuscitation.” It did look to the
past, since an element of the mission was
to remind the neighbouring states that they
needed to maintain friendly relations with
China. Although he definitely expended
most of his effort in expanding commerce
with markets that were already known to the
Chinese, he was expanding China’s econom-ic
reach by changing these neighbours from
quiet bystanders into active trading partners.
Resuscitation through Expert Sales-manship
On his fourth mission, for example, Zheng
He took 63 ships and over 27,000 men to the
Maldives, Hormuz and Aden. As a result of
this journey, nineteen countries sent return
missions to the Ming capital at Nanking, a
real coup for Zheng He in terms of market
development. Zheng He accompanied the
representatives of these missions back to their
home countries as part of his fifth expedition.
This was a significant act of cooperation and
support. Zheng He’s naval capabilities were
superior to those of the countries he visited.
Zheng He had to coordinate these foreign
vessels along with his own fleet, expending
his effort, but making the trip much safer for
his allies.
Resuscitation through Public Relations
Whenever Zheng He dealt directly with agents
from different countries or cultures, he would
have been very aware of the public relations
role he was taking on. He was representing
the Emperor at all times, and in essence, was
28
acting as a salesman for China: he was selling
the goodwill and culture of his home country,
intending that the host country would “buy”
what was on offer and open trade relations
with China.
Resuscitation through Serving Cus-tomers’
Interests
All those actions contributed to Zheng He’s
resuscitation techniques. He eliminated ter-ritorial
struggles by providing the conduit
for envoys from neighbouring countries to
visit China and return home safely. This was
a clear instance of integrated diversity and
countries sharing in a common vision: the
value of maintaining friendly and open trade
relationships.Taking action to further their
joint interests was another example of the col-laborative
spirit Zheng He brought to all these
dealings.
Resuscitation through Making Invest-ments
His missions did require a significant invest-ment
from the Chinese, in building the ships
andfacilities such as warehouses and ship-yards.
However, Zheng He had an obligation
to “make a profit” during his voyages, in terms
of building goodwill, earning respect, and of
course in the commercial trade in which his
team was engaged. In this sense, Zheng He
was involved in the “Resuscitation” phase.
He was building toward the future while still
making it pay off during the present.
Zheng He and Therapy Techniques
In Corporate Transformation, the “Therapy”
phase begins to develop a new mindset and
a new corporate culture. These are essential
for the long-term growth of the company,

although they will not, by themselves, save
a company from bankruptcy. The “Therapy”
phase requires a more collaborative leader-ship
style than the one used in “Surgery.”
Zheng He provided therapy by using crea-tive
innovation and planning for sustainable
growth. He empowered his subordinates,
spread goodwill and planned for the future.
However, the main intent was to change the
other countries, not the Chinese themselves.
His goal was to improve China’s standing
among the foreign countries, by demonstrat-ing
goodwill and collaboration. It was inci-dental
that his work could have led to further
changes among the Chinese, had later Em-perors
followed the path of Emperor Yongle.
Therapy by Empowering Subordinates
Admiral Zheng He developed and command-ed
a very large fleet. He delegated diplomatic
missions to his subordinates, arranging for
later rendezvous, and co-ordinated their ef-forts.
This is similar to the way a manager at any
level might provide growth opportunities for
his or her direct reports.This is a clear exam-ple
of empowering his “employees.”
The advantage of this empowerment is the
upgrading of an employee’s attitude and per-formance
as they take “ownership” of their re-sponsibilities
and duties.
Another bonus to empowerment is the in-crease
of innovation and creativity from an in-dividual.
When one feels free to work on their
own, there is a freedom in how they relate to
the company or employer. This freedom often
results in a surge of creativity, a plus for the
company, and certainly a large benefit to the
employee.
Therapy by Spreading Goodwill
Remember that, as an admiral, Zheng He
could have used military might to impress
and influence his foreign neighbours. By us-ing
the soft power of trade, and restraining
his fleet from military action, Zheng He was
beginning to change the attitudes of the for-eign
leaders.
Although the policy of developing trading
partnerships was not new in China, Zheng
He did work hard to push the foreign lead-ers
into this mindset. This is like the corpo-rate
therapy phase that fosters change in one’s
own corporate culture. A very specific exam-ple
was making the Chinese medics available
to as many people as possible in each port of
call. This demonstrated that the Chinese had
something to offer, even beyond trade goods.
Therapy by Planning for the Future
The above actions are like building a new cor-porate
culture. The other aspect of the ther-apy
stage of the three-phase transformation
program is to make long-term plans and ini-tiate
the actions to make them a reality. Zheng
He worked toward this goal, by concentrating
his later voyages not on law enforcement, but
on the continuation of the new trade relations
that were in place. Zheng He was obviously
aware that maintaining the goodwill that had
been established on his earlier voyages was as
important as law enforcement, perhaps even
more important. People like to feel as though
they are important and are partners in a re-lationship,
rather than subjects that need to
be ruled with an iron fist. This may have con-tinued
indefinitely and sustained long term
growth, but before Zheng He could start out
on his seventh voyage, Emperor Yongle died,
29

30
and the next emperor changed the strategic
direction for China. Yongle’s grandson rein-stated
the diplomatic voyages, largely because
no tribute had been received for several years.
Zheng He served on only one voyage for Xu-anZong;
no further voyages were made for
centuries.
Five centuries later, the new Chinese aspi-ration
to become a significant player in the
global economy may be traced back to Zheng
He’s voyages. Modern China is generating
goodwill and investing heavily in Africa and
Latin America, helping the troubled Euro-pean
countries with sovereign debt prob-lems
and sending Chinese tourists all over
the world including its erstwhile enemy Tai-wan.
China even extended a helping hand to
quake-stricken Japan, even though there were
diplomatic rows for a short period of time. It
is winning the goodwill of the world through
spreading economic goodwill. This is con-trary
to the US, which is bogged down and
hasgenerated a lot of problems with military
incursions into Iraq and Afghanistan.
General Electric, Admiral Zheng He
and Corporate Transformation
In the early 1980s General Electric Corpora-tion
(GE) applied corporate transformation
techniques to transform itself into an eco-nomic
powerhouse. GE was already large, but
it required serious and lasting changes. Jack
Welch became Chairman and CEO in 1981
and began making those changes.
Although Welch was not Chinese, his ap-proach
to improving GE used techniques
found in both the yet-to-be-invented Corpo-rate
Transformation strategy and the meth-ods
Zheng He used in opening up trade for
China.
GE’s Surgery Phase: Operational Pro-ductivity
Perhaps the most daring change Welch intro-duced
at GE was to “de-layer” the company.
He had long believed that its many layers of
management fostered bureaucratic timid-ity
rather than innovation and productivity.
Part of that bureaucracy was a “financial ma-fia”
that controlled spending so tightly that it
choked reinvestment. Decreasing the layers of
management bureaucracy allowed for more
freedom to reinvest. Welch also reduced in-ventory
levels dramatically.
GE’s new strategy was to become either #1 or
#2 in any given market; or to exit that mar-ket
altogether. The company sold off divisions
that did not lead their markets. This reduced
staff and simplified the corporate structure.
Welch focussed on high growth while shrink-ing
the head office division.
Staff learned to accept that low-performing
employees would lose their jobs; the target
was about a 5% annual dismissal rate. Anoth-er
cultural change was that simplicity would
eventually triumph over bureaucracy.
By shedding both low-performing employees
and uncompetitive divisions, Welch demon-strated
the intense, ruthless focus on cost-saving
measures that are characteristic of the
Surgery phase.
Emperor Yongle had set Zheng He the task
of strengthening foreign trade while demon-strating
Yongle’s power and emphasizing the
legitimacy of his rule, including defeating the

31
pirate chief, Chen Zuyi, in order to maintain
order along maritime routes. Admiral Zheng
He amassed a huge fleet and made his plans
with a strict attention to detail. Zheng He en-sured
that his armada would be well prepared,
and also well disciplined to ensure the Em-peror’s
orders would be carried out. Zheng He
had three methods to guarantee the success
of his tasks. Like Jack Welch of GE, Zheng He
focused upon three main principles:
• Simplicity
• The goal to become number one
• Strategic planning.
The simplicity of Zheng He’s voyages was ap-parent
in the map of his travels. He did not
attempt to explore unknown countries; China
was aware of the majority of countries sur-rounding
the Indian Ocean, and had been, for
centuries, a primary producer and consumer
of goods trading between the Mediterranean,
African and Middle Eastern.
He also endeavoured to become number one
at what he did. With the Emperor’s financial
and ideological support, plus his own military
acumen, it is not difficult to understand how
he became the legend of the sea, a distinction
that still holds true today.
His strategic planning included arranging for
large numbers of sailors, huge ships, and care-fully
premeditated ports of call. This meticu-lous
planningwas critical in making all of his
voyages an overwhelming success.
One other aspect used by Zheng He was his
recognition of his men, as well as other cul-tures
and people within their own right. He
respected the men under his command, and,
in turn received their respect.
There would be no other way to command
up to 27,000 men over an immense armada
of ships.
Likewise, his esteem and reverence for the
foreign societies that he visited helped to
make China (and Zheng He himself) a popu-lar,
yet formidable force.
By undertaking a long-range approach, Zheng
He prepared the way for numerous journeys
that would become as successful as his first.
The characteristics shared byZheng He and
Jack Welch was the demonstration of laser-like
focus and intensity during the early stag-es
of their tenure as the top leaders of their
organizations.
GE’s Resuscitation Phase: Productivity
with Innovation
GE’s resuscitation phase began a turn toward
innovation. Product innovation was made
possible by eliminating “turf wars” between
divisions; the company began to eliminate
internal boundaries. Divisions shared knowl-edge
on best practices, such as Six Sigma and
work-out.
GE’s strategy shifted toward integrated diver-sity
in its teams and products. Cross-func-tioning
teamwork meant that people with
various skills and backgrounds would work
together on a project, rather than reviewing
and criticizing other divisions’ projects.
Welch pushed the corporation to pursue com-mon
goals, rather than allowing each division
to focus on success for itself at the expense of
others.
One innovation made by Zheng Hewas the
inclusion of medical staff in his fleet. These
doctors worked to keep his sailors healthy,
and also served foreigners in each port of call.
Their medical aid was effective in building
goodwill, trust and cooperation in each coun-

32
try they visited. When Zheng He shared his
doctor’s medical expertise with the populace
in his various ports, he was removing obsta-cles
to establishing good diplomatic relations
with the people of these countries.
Zheng He’s fleet also included specialists in
languages, commerce, construction, and of
course sailing. These cross-function teams
were essential for communication with the
people they visited. Zheng He knew that the
Chinese would have to buy and sell, to build
warehouses, and to travel from place to place
safely, and the most productive way for this
to happen was by establishing distinctpoliti-cal
interactions within each destination he
visited.
GE’s elimination of internal boundaries
worked in much the same way. Welch un-derstood
that advancement was not possible
as long as the company was battling itself in-ternally.
By encouraging the pursuit of more
efficient practices, including cutting back on
inventories and taking apart the bureaucracy
that was performing inadequately.
As Zheng He learned, Jack Welch also real-ised
that the strength of any company relies
upon the individuals that make up its constit-uency.
By encouraging innovation and coop-eration
within their respective organizations,
both Zheng He and Jack Welch were able to
successfully communicate and manage those
subordinate to them.
GE’s Therapy Phase: Continuous Inno-vation
Welch then pushed GE to adopt a cycle of
continuous innovation. Rather than running
a product through a “develop, then sell un-til
the competition catches up” timeline, GE
would continue improving products or de-veloping
replacements. As well, new systems
and methodologies were introduced so GE
could innovate more while consuming fewer
resources.
Part of the strategy was to empower employ-ees,
so decisions could be made farther down
the corporate ladder. Flexibility, rather than
bureaucracy, was rewarded.
Two of the cultural changes were the “360-de-gree
appraisal” and the “Crotonville-GE way.”
The first involves performance appraisal by
peers, subordinates and customers as well as
by managers.
The second refers to GE’s educational campus,
which embodies the goal of life-long learning.
Zheng He also “empowered” his diplomatic
staff. He sent them on missions, trusting that
they had the skills to succeed even when he
was not present. Of course, they did rendez-vous
later so he was kept informed after the
missions. These were learning opportunities
for his subordinates, who were nonetheless
responsible for their missions.
It does seem a pity that Zheng He’s work was
not continued by the next Emperor; it would
have been interesting to see how Chinese cul-ture
could have developed with further cul-tural
and ideological exchange.
By turning inward after Zheng He’s missions,
China was unable to create the major culture
shift that GE would experience under the
leadership of Jack Welch centuries later.
Following the death of Emperor Yongle
in 1424, the Ming dynasty temporarilyput
an end to its attempts to establish subsidi-

33
ary states and economic partners through-out
Southeast Asia.When Emperor Yongle’s
grandson ascended the throne, Zheng He be-gan
his seventh and final voyage; however, ad-vocates
for an isolationist foreign policy held
sway, and the funding for Zheng He’s enor-mous
undertakings was withdrawn. Rather
than utilizing the corporate transformation
techniques, as General Electric did about550
years later, China allowed the great strides
made by Zheng He to fall by the wayside.
Both Zheng He and Jack Welch worked to
change their organizational cultures. Zheng
He laid the foundation for future trade and
international relations, but China did not fol-low
through for five centuries.
Jack Welch succeeded in making the changes
he envisioned for the corporate culture at GE,
especially in making lifelong learning a key
part of an employee’s career.
The Timeless Nature of Corporate
Transformation Techniques
Zheng He in the fifteenth-century, and Jack
Welch in the twentieth, all applied the tech-niques
of corporate transformation intheir
own situations. Each achieved spectacular
success as leaders in challenging circum-stances.
Zheng He and Jack Welch led large
hierarchical organizations.
Allof these men demonstrated that collabora-tion,
teamwork and cooperation are powerful
tools of leadership. Zheng He strengthened
alliances with foreign leaders, people who
may have distrusted or feared China’s might.
Jack Welch overturned vested interests inside
General Electric, leading to cooperation from
aptly-named corporate “divisions.”
The same techniques can be, and have been,
applied in a number of corporations in recent
decades. The three-phase corporate trans-formation
program provides a way forward
through difficulties to success.Jack Welch has
confirmed using the transformational strate-gies
successfully.
Zheng He was indeed a great corporate trans-formation
expertand inspiration,and used the
transformation strategies much earlier. He
had paved the way for the globalisation suc-cess
of modern day China.
About the Author:
Mike Teng (DBA, MBA,
BEng, FIMechE, FIEE,
CEng, PEng, FCMI,
FCIM, SMCS) is the au-thor
of the books Corpo-rate
Turnaround: Nursing
a Sick Company Back to
Health (2002) and Corpo-rate
Wellness: 101 Prin-ciples
in Turnaround and Transformation” (2006).
Dr. Teng is widely recognized by the Asian news
media as a turnaround CEO. He has 27 years of
experience in the Asia Pacific region, including 17
years as the Chief Executive Officer of multi-nati-onal,
local and publicly listed companies. He has
led the successful turnaround of several troubled
companies and is currently the Managing Direc-tor
of a business advisory firm, Corporate Turna-round
Centre Pte, Ltd., which assists companies
on a fast track to financial performance. Dr. Teng
is the former President of the Marketing Institute
of Singapore (2000-2004), a national body repre-senting
5000 individual and corporate marketing
professionals in Singapore.
Dr. Teng is currently the President of the National
University of Singapore MBA Alumni. NUS MBA
program is rated the best in Asia.

34
Turnaround ManagSemheonrtt JNouortneasl
Corporate Bankruptcy - When Should a Business File For Bankruptcy? by Matt Gallo
Chapter 11 Bankruptcy - Can Restructuring Debts Save a Business? by Simon Vokov
Cash is Oxygen During the Restructuring Process by Dr. Mike Teng
Comprehensive Solution for Under Performing Firms by Samantha Lewers
Results of the Impact Executives´s Survey by Clive Sexton
Healing a Hospital - The Turnaround at Southeast Georgia Health System by L. Hoagland-Smith
Managing Overhead by Mark Fackrell
Buying Good Businesses in a Bad Market by Rockwell Marsh
20 Change Management Mistakes to Avoid by Torben Rick

35
Corporate Bankruptcy - When Should a
Business File For Bankruptcy?
by Matt Gallo
Matt Gallo is the Internet marketing manager for Prospect Genius
In the today’s economic climate, an increasing number of businesses are suffering from finan-cial
stress. When debt is piling up, it can be difficult to determine if or when to file for bank-ruptcy
protection. The following is concise overview of the issues surrounding bankruptcy, but
you should always consult a professional before making any decisions.
When to file for bankruptcy? The short answer is you should try every other solution first.
For small business owners, a business bankruptcy can affect your personal finances. If your
company is a partnership or sole proprietorship, you can be held personally responsible for
your business debts. That means your personal assets can be used to satisfy your creditors! Of
course, in these cases, you should seek every potential alternative in order to protect your per-sonal
property and assets. Moreover, a bankruptcy filing will probably make it harder to start
a new business down the road. Not only will your assets be depleted, but you’ll also have the
social stigma and financial baggage of a past bankruptcy.
However, even when your company is besieged by creditors, there may be non-judicial options
available. Restructuring and financial workouts can help satisfy your debtors without filing for
bankruptcy. In many cases, just informing your creditors that you’re considering bankruptcy
is usually enough incentive to bring them to the bargaining table. These prevention methods
facilitate the creation of a compromise between your business and debtors. Whereas a bank-ruptcy
would likely result in the creditor getting nothing, these negotiations result partial re-payment,
Workouts and debt restructuring are an effective way of satisfying your company’s
debts without the hassle, cost, or embarrassment of a filing bankruptcy.
On the other hand, if your creditors are refusing to compromise and your debts can’t be re-solved
any other way, bankruptcy protection may be your only option. Depending on your
business structure and financial situation, there are a number of options available for corpo-rate
bankruptcy. To determine the most appropriate action for your company, you’ll want to
consult with an experienced attorney. In fact, if you’re facing mounting debts, you may want to
consult a bankruptcy lawyer before the situation becomes dire. He or she may be able to help
get your company turned around with knowledgeable guidance and bankruptcy prevention
advice.

36
Chapter 11 Bankruptcy - Can Restructuring
Debts Save a Business?
by Simon Vokov
Industry leader in bankruptcy, foreclosure, short sales, promissory notes and real estate investing
Chapter 11 bankruptcy is available to individuals, partnerships and corporations that carry
high levels of debt. Also known as “reorganization”, this bankruptcy chapter offers debtors the
chance to restructure debts and become financially viable again.
With chapter 11 bankruptcy debtors are allowed to keep assets such as businesses, homes,
commercial buildings, equipment and automobiles. Similar to chapter 13 bankruptcy, debtors
seeking protection under chapter 11 must submit a repayment plan which must be approved
by a bankruptcy judge.
Filing chapter 11 is more expensive and time consuming than any of the other bankruptcy
chapters. It is also considerably more difficult to adhere to the strict guidelines and repayment
plan. Bankruptcy experts claim about 10-percent of chapter 11 reorganization plans are suc-cessful.
Perhaps the reason for the high failure rate stems from the fact chapter 11 is used primarily by
mega-corporations and the exceptionally wealthy. Two prime examples of large corporations
that have filed for chapter 11 bankruptcy protection include Lehman Brothers and Washing-ton
Mutual.
Chapter 11 bankruptcy must be confirmed through the U.S. Trustee’s creditors committee.
Members of the committee cast votes to approve or deny the debtor’s proposed repayment
plan. Debtors must file a disclosure statement and repayment plan which includes information
about their assets, liabilities and business affairs.
The disclosure statement is used to provide adequate information to the Trustee’s creditor
committee allowing them to make informed decisions on the financial status of the debtor.
The committee uses this information to determine if the debtor is financially capable of adher-ing
to the proposed repayment plan. Once chapter 11 is confirmed, the debtor’s finances are
supervised through the court until debts are paid in full. Corporations are required to repay
outstanding creditor debts before distributions can be paid to shareholders.
Chapter 11 bankruptcy is one of the most complex, yet flexible, bankruptcy chapters. It en-compasses
multiple facets and adds layers of complexity not found in other bankruptcy chap-ters.
However, the flexibility grants debtors substantial opportunities to restructure debts.
Nearly everyone filing for bankruptcy protection requires the assistance of a qualified bank-ruptcy
attorney. However, attempting to file chapter 11 without a lawyer would be disastrous.
In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act made significant
changes to bankruptcy laws. Few people can muddle through the legalese of BAPCPA.
Two excellent resources for learning the intricacies of chapter 11 bankruptcy include Cornell
University Law School and the United States Trustee Program; a component of the U.S. De-partment
of Justice.

Cash is Oxygen During the Restructuring
Process
by Dr. Mike Teng
Managing Director of Corporate Turnaround Centre Pte Ltd
37
Revenue is vanity, profit is reality and cash is certainty. In medical analogy, revenue is the food,
profit is the water and cash is the oxygen. You cannot pay rent with profit, you can only pay
your rent with hard cash. Cash talks, the rest walks. Just as a critically ill person needs to be
administered with fresh oxygen, an ailing company’s immediate lifeline is cash, cash and more
cash. Fresh fund injections will provide the fillip needed to get the system moving on an even
keel as well as to create stable platforms for growth.
In almost every turnaround situation, there is a troubled project that is bleeding or draining
cash at an accelerated speed. For a variety of unhealthy reasons such as neglect, denial or
mismanagement, these problems remain unresolved. The turnaround team need to apply the
tourniquet and immediately stop the continuous haemorrhage and unrelenting outflow of
cash. The turnaround team’s task is to stomp out the fire and slow down the rate of burnt-out.
The West would call this “stopping the bull by its horns,” and the East calls it “catching the tiger
by its tail.” The managers need to adopt this approach during restructuring. Also they need to
promote “corporate catharsis” to purify the system and set the tone of the mode of operation.
It is no more business as usual.
Other cash flow problem arises when the bank recalls its loan or terminate other lines of credit
to the company. In Singapore, many small and medium size enterprises (SMEs) run into cash
flow problems when the local banks cut or reduce the bank loans. In 2003, there was a record
high of 4484 individuals who were declared as new bankrupts. In the past there were six major
local banks with banking officers who understood the sentiments and businesses of SMEs and
had close banking relationships with them.
However, in recent years with mergers and restructuring in the local banking scene, only four
major banks remain with many of these banking officers retrenched and the bank loans to
the SMEs drastically reduced. The banks’ understanding and rapport with the SMEs are lost.
The new banking officers are stricter and loans are not given to SMEs, which exceed the ban-king
credit facilities and do not provide proper accounting records. Also, the local banks have
shifted their focus to other low-risk and fee-based services. The Singapore SMEs suffer from
„corporate asphyxia“, deprived of its vital oxygen supply - cash.
The demands for funds will be there - paying the rental, workers‘ salaries, bank loan and inte-rests,
implementing new technology, upgrading current equipment, reviving R&D, providing
advertising support to brands, training people, acquiring competitors to add critical mass to

the company, and so on - the list is endless. Hence it is vital for the turnaround manager to find
ways of improving short-term liquidity, cut costs and at the same time, negotiate new loans
from the current lenders.
Measures to improve cash flow include - reducing inventory and disposal of obsolete ones,
tightening stock control, increasing the selling price, divesting ventures that do not add value
to the core business, reducing costs, finding refinancing, factoring the receivables, implemen-ting
sales and leaseback, exploiting hidden assets, recouping prepaid expense, renting out idle
capacities and persuading the customer to pay cash and in advance as well as laying off/down-sizing.
Fresh funding is critical to jump starting the system. Avoid bankruptcy and improve
your cash flow.
Every bad debt starts out as a slow repayment, so you need to be vigilant of your collections.
Disproportionately high receivables and inventory are trouble signs. The balance sheet calls
them assets. They should actually be called liabilities. Cash is an asset, you can buy many
things with it. Mounting inventory or receivables is the first warning that the service or pro-duct
is slipping while your income statement still shows profits. Also do not confuse external
borrowing with positive cash flow. Proper accounting says it is, but this is short-term thinking.
Only sales collected are the authentic cash flow. All else is temporary or even worse.
Managing cash flow to meet working capital requirements is very important. With insufficient
working capital, a business can wind up despite being profitable. On the other hand, an unpro-fitable
business can continue operations if it has sufficient cash to pay its creditors.
Though cash is not everything, its level of importance is the same as oxygen. Without it, you
will certainly perish.
Comprehensive Solution for Under Perfor-ming
38
Firms
by Samantha Lewers
Samantha Lewers works for Kestrel Solutions which provides turnaround management
Turnaround management offers a guiding light to corporations and under performing firms
which are faced with the prospect of economic downturn or operational failure. Some of the
ways in which turnaround management can reverse the fortune of a failing corporation so that
it is once again able to compete effectively in its niche are discussed below.
Combating Camaraderie
One of the most significant battles of an established firm is that of internal camaraderie. All

too often, men or women in high positions have worked next to the people who got them there
for years. As such, it is generally difficult to make tough decisions such as lay-offs, termination
of department heads or removal of a department altogether. Not only are there sometimes
emotional ties which keep CEO's feeling a sort of debt to its employees, a CEO may be blinded
by internal practices - being led to believe that a specific department is vital to the success of
the company, when - in fact - it is contributing to its failure.
Turnaround management personnel are not affected by these sentiments, and are able to view
both employees and departments objectively. It is here that turnaround management firms
begin to reverse the fortune of underperforming firms in that they are able to cut costs which
only serve as a liability.
Fresh Marketing
Many corporations which were once successful in their marketing tactics become stale in the
practice of attracting new clientele. CEO's who have become accustomed to 'old school mar-keting'
are too involved in the daily grind to gain a fresh perspective on updated methods of
advertising, and thousands of dollars are left on the table each day.
The goal of turnaround management is to deliver a fresh outlook on marketing, identify un-tapped
target consumers and devise marketing media geared towards revitalizing the lifeblood
of the corporation.
Implementation of New Strategies and Updated Goals
A new team designed to rebuild and revitalize a corporation is generally able to analyze and
identify pitfalls and devise strategies to combat such loss. New goals are set in place which
employees must adhere to if they are to avoid being lost in the wayside of a recovering corpo-ration.
By our very nature, we - as human beings - respond to personal and professional goals if only
they are set in place. It is the duty of turnaround management to once again make a corpora-tion
successful by implementing such goals and holding each and every employee accountable
for delivery.
Essentially, turnaround management can serve to breath new life and perspective into under
performing businesses. Further, it is vital to get this type of management in place sooner,
rather than later, to prevent the business from reaching an irreversible position.
39

Results of the Impact Executives´s Survey
Their ability to identify and address a problem quickly, their impartiality and their strong peo-ple
skills make interim managers ideal people to handle turnarounds and business restructur-ings.
So it is not surprising that the most recent assignments of over half of the respondents to
the latest Impact Executives’ survey were turnarounds or restructurings.
While the most common length of assignment cited by respondents is four to six months, the
number whose assignments lasted for 12 months or more rose this year to 30% from 20% last
year. But it seems the trade-off for longer assignments could be a lower day rate: the number
who said their daily rate was higher than on their previous assignment fell to 23% from 32%
a year ago.
The number who gained their turnaround management assignment through an interim pro-vider
rather than through their own networks rose over the year from 46% to 56%, the highest
level for four years. This suggests that companies are increasingly reassured by the fit between
assignment and interim manager that derives from the rigorous approach to interviewing, as-sessing
and referencing candidates guaranteed by interim executive providers such as Impact
Executives.
Manufacturing industry accounted for 19% of all assignments carried out by Impact Execu-tives
interim managers over the past six months, just behind central and local government and
public sector health organisations. Respondents expect the trends of the past year to continue,
with 56% predicting that turnaround and restructuring will continue to be the primary areas
requiring interim management expertise.
A further 15% anticipate business growth will also generate assignments. This finding is con-sistent
with respondents’ guarded optimism for economic prospects: some 41% of them ex-pect
a small upward trend during the first half of 2007, compared with 32% a year ago, and just
15% predict a slight downward trend, compared with 26% a year ago.
Healing a Hospital - The Turnaround at Sou-theast
Georgia Health System
by Leanne Hoagland-Smith
author of: Be the Red Jacket in the Sea of Gray Suits, the Keys to Unlocking Sales Success
40
by Clive Sexton
With health care comprising a significant part of the national economy and growing larger
every year, hospitals need to become efficient and effective in how they take care of their own

operations, their employees not to mention their patients. This is truly a white paper in a book
that demonstrates, yes, hospitals can be healed and can be turned around in a relatively quick
time from losing hundreds of thousands of dollars to becoming the premier hospital.
In this turnaround case study, David Herdlinger shares how he became part of this incredible
story. Imagine a once profitable hospital becoming a healthcare institution that was losing $1
million per month and having a vote of "no confidence" by the medical staff with regards to the
management of the company. The situation was indeed dire.
Through the firing of the management team to the hiring of a new CEO, Gary Colberg, David
documents many of the behind the scenes events that transformed this failing regional hospi-tal
into one of the best hospitals in GA. From the initial meeting with the new executive team
to the monthly coaching sessions with the hospital's health practitioners to just listen while
helping them improve their leadership skills, the reader in a very short time can understand
how this management turnaround process happened fairly quickly.
David truly demonstrated that when a results focused, innovative and authentic leader takes
over anything is possible. His modest sharing of his part in turning around this struggling
regional hospital in GA to become the best hospital and reflects his overall approach to coach-ing,
While business should alway keep an eye on costs, the importance seems greater when busi-ness
is bad. These time frequently cause business owners and managers to reevaluate eve-rything
from their business bonus structure all the way down to the brand of pens they use.
Many small business owners are experts when it comes to producing their particular product
or service, but may not as great at managing the „business“ aspect of things. This brings me to
the purpose of this article which is managing overhead.
• Think long and short term
• Go for the low hanging fruit first
• Remember that Everything is negotiable
• Don‘t forget your purpose
41
training and the development of leadership skills.
Organizational change is not easy especially in the health care industry. This book provides
a simple place as to where to start and what to do. If you are in health care, in a leadership or
management role and have issues ranging from financial to organizational culture, then this
quick and easy read may begin to provide some very doable answers for you.
Managing Overhead
by Mark Fackrell
CFO for Hire, Strategic Business Services

Turnaround Management Journal 1 2012 Restructuring Transformation Lymbersky Turnaround Management Society

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