I’m a fan of a CNBC reality show called ‘The Profit’. In each episode, wealthy entrepreneur Marcus Lemonis reviews, invests in, and turns around a small business.
Lemonis succeeds because he has incredible retail instincts – he knows what people will buy, how to merchandise it, and how to operate a business efficiently – and because he has terrific leadership skills.
In the last episode, he bought a 50% interest in a small business for $200,000. But, he was unhappy with one of his partners having only a 10% share. Rather than renegotiate the deal, he simply gave 10% of the company to the partner he felt should own more. Imagine that! He gave up equity!
It’s antithetical to most business owners to give up equity. Yet, when he assessed that someone was being treated unfairly, that’s exactly what he did.
Next, on to the employees. Like most businesses in trouble, this one had a dispirited team. When addressing them, Lemonis endeavored to gain their support by outlining what he needed from them in the context of what they needed from him.
“We’re not going to wake up every day wondering if we have a job,” he told them. “We’re going to wake up every day wondering how much work we can get done.”
Like all turnarounds, Lemonis needs to change the culture, the behavior, and the direction of a failing business. The owners give up control in exchange for a life preserver. By the time he arrives, they are out of money, highly indebted, and worried about losing their homes.
He’s there to help but dictates what will happen and how. The owners accept it because they are in no position to do otherwise.
Still, there’s something that leaves me a bit uncomfortable.
Here’s a model for changing people’s behavior laid out by Peter Bregman, CEO of his eponymous company that develops leadership programs:
Identify the problem
State what needs to happen
Offer to help
Lemonis starts by clearly stating number 1 and 2. Then he leaves town and returns a few weeks later to review progress. It’s a great way to generate dramatic tension in a reality show; however, it’s not a great way to start a new initiative. He shouldn’t be spending the first two weeks attending to other matters. He should be spending it in the trenches with those doing the work.
The beauty of Bregman’s model is its simplicity and effectiveness. But, if you miss a step – especially the third step – you fail.
For example, if you own a retail store and find the storeroom in a mess, you might say to your stockroom staff: “This place is a mess. You’ve got till the end of the day to get it straightened out or I’ll find someone else who can.” (Haven’t we all heard something like that at some time in our working life?)
How about this?
“Wow! Our storeroom has become a disorganized mess. Pretty soon, it will affect our ability to support the sales team. Let’s work out a plan to get everything in order.”
Ultimately, you may have to assess how the storeroom got to be a mess and whether you have the right management or staff. But, right now, you’ve got to get your storeroom in order.
Lemonis usually gets to step three in his turnarounds. In an early episode, a snowstorm threatened to undo the success of the grand reopening of a used car dealership. What did he do? He grabbed a snow shovel.
How many wealthy investors would do that?