Medical Malpractice

The first step to good health is to acknowledge the presence of pain and that all is not
well with the body. In many ways, the job of the turnaround manager is akin to that of the
physician. The first step is to diagnose the corporate patient's condition before even
attempting to prescribe the right medication. For prescription without proper diagnosis is
malpractice.

The starting point is crucial to ensure that you have the right footing. To learn any skill,
one has to take that first step. If you want to learn to swim, you have to take the first step
of plunging into the water. To learn to parachute, you have to take the first step of
jumping out of the airplane. One can read about and rehearse all the knowledge about
swimming and parachuting or any other skills. However, one will never learn the skills if
the first step is not taken to do the "real" thing. Ironically, it is found that the first step is
always one of the most difficult steps to take in any venture, for it entails stepping into
unknown territories and unchartered waters. Whether it is taking the first step to
recognise that one is unwell or taking the first step to learn a new skill, the first step is
also one of the most rewarding.

However, diagnosing the company's health is not as straightforward since many
qualitative factors are involved. Oftentimes, the management also plays the game of
denial and deception. Usually there are ample warning signs or symptoms of impending
trouble such as high attrition of good staff, declining brand value etc. However, the
management may be in the state of self-denial or does not wish to let out the knowledge
of the company's predicament. Admission of the failure may expose them to criticism by
the company's board of directors, shareholders and their peers. Unfortunately, this may
result in delays in implementing the vital remedial actions during the early stage of
under-performance. Adoption of prompt actions may have significantly improved the
company's quandary and chances of survival.

Denial and deception remind us of the former Iraqi Information Minister, Muhammed
Saeed al-Sahaf who made comical and untruth remarks about the realities of the outcome
of the US-Iraq war: "There are no American infidels in Baghdad. Never....They are
coming to surrender or be burned in their tanks....Who are in control, they are not in
control of anything - they don't even control themselves....Be assured. Baghdad is safe,
protected." These statements were made despite the fact that the American forces have
already landed at the Baghdad airport and within days Baghdad was captured by the
allied forces.

Some sick companies play another game of "don't know and don't care". This is
ignorance and apathy. Similar to taking care of physical health, these companies fell sick
because of not knowing what to do as well as neglect. Their "cannot be bothered"
attitude was perhaps the result of having been distracted by politics, mesmerised by new
acquisitions or focused on the wrong strategies. These have misled the management from
doing what is right for the company. As a result the company falls into ruins and tatters.
After recognising that the sick company needs treatment, sometimes the beleaguered
management's vision may be limited by the symptoms and not addressing the cause. At
this juncture, it will be useful to probe further with broad questions such as:

Is the company in trouble with the law, bank, creditors, etc?

What is the cash flow position?

Is the company up for sale?

Can the company be turned around?

Should the company be closed?

Once these broad issues are determined, the turnaround manager then ventures into
deeper issues relating to finance, marketing, operation, etc before deciding the
appropriate treatment.

Proper medicine can only be administered after the acknowledgement that there is pain.