Thankfully, with the help of another senior staff member, I was able to salvage that situation.Īn article in Forbes, “ The Three Qualities a CEO Must Have to Success” addresses the issue of credibility and how critical it is to success. But in their minds I was just wasting their time. That was untrue, of course, as I always speak openly with people and listen to their thoughts before making any decisions. So the president told senior staff members I had already made up my mind about how I would restructure each of their divisions. How did he do that? The chairman of the board gave me specific people to speak with about certain issues. The president of that company didn’t like the fact I was doing an assessment of the company and wanted me to keep out of his business. Through no action of my own, I almost suffered the same fate at a company I has hired to assess prior to becoming the director of reorganization. Had the CEO come clean about the mistake, been honest with his bank and his customers, he could have avoided the losses his ego cost him. But the business lost $8 million in equity. We were brought in late in the process, and were able to sell the company and repay the lender and creditor. Faced with more losses, the bank soon noticed he wasn’t able to repay his loans and gave him the boot as well. His customers weren’t thrilled with the unexpected and unexplained 50 percent price increase he put on that widget and fled. Rather than admit his mistakes, he just adjusted his prices. Instead of having a $1 million profit as anticipated, the company actually had a $2 million loss. Upon reviewing his numbers one day he found some cost accounting discrepancies and realized he was selling his primary widget under cost. Despite the fact he had a PhD, he wasn’t too smart when it came to running his business. I once replaced a very smart man, who was CEO of a company that manufactured electronics parts. The consequences if they don’t can be catastrophic. I urge every CEO I work with and every company’s senior management to maintain a high level of credibility. If you think about that, you’ll do things differently.” And he must guard and protect it as a valuable asset.Īs Warren Buffett said, “It takes 20 years to build a reputation and five minutes to ruin it. Every CEO must have that – with his employees, his board, his customers, his investors and his employees.
And once it’s lost, it can be almost impossible to get it back. I can’t do my job turning companies around without it. You can’t run a successful company without it.
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