Adventures in Turnaround

The experience with the cooperative is quite an enriching one for me, thus far. The people I think are the most valuable from the organization's standpoint are all looking to me for insight, direction, and leadership to get through this tough period and towards a fulfilling future. This is new for me - to be seen so explicitly as a leader. I've always felt as though I had better answers and skills than those in charge, but I've stayed on the sidelines. Not that I've shrunk back from responsibility, just that there has always been someone either in the position of power already or more intent on assuming that position of power. Machiavellian power politics are not my forte.



When I first attended a coop board meeting, it was obvious that there was one individual who had amassed all the reins of power through fiscal control, process control, and influence over two or three board members who formed his voting bloc. At first I deferred, assuming that his opaqueness hid a good grasp on what the business was doing, where it was headed, and what needed to be done. But there was all that flailing about future directions for the organization, and I thought I could bring some clarity around strategy. I tackled that task as a consultant, interviewing the principals, collecting as much data as I could, and workshopping the results with the board into a pretty decent document.


Two things were learned from that experience - one, that the secretary was extremely reluctant to give up information, and two, when that information was obtained the picture it painted was not very pleasing. A picture was forming in my head of the cooperative as a machine or a system with inputs, functions and outputs, and I began to realize where the machine was needing a bearing replaced or a gasket fixed. I used the phrase "current cashflow crisis" on one slide and explained that every month, less revenue was being made than was being spent to make that money. The effects were being masked by the use of the credit line in the summer of 2005 to buy the inventory, but the debt was not being paid off fast enough now that the inventory was being sold. There was going to be a shortfall at some point. I was surprisingly nervous to present this bad news - the secretary was there and I knew he wouldn't be pleased with my analysis. Still, I naively believed it was spur some decisive action.


In fact, nothing effectively changed with the way the organization was operating. The secretary managed to defuse the bombshell I had delivered and kept everyone plugging along, blind to the growing financial woes and spinning in tighter and tighter circles operationally. The only entrepreneurial type involved in the coop had been the one who brought me into the picture, but his clashes with the secretary had grown so bad that he stepped down from the board when I began my consulting project, thinking that if he was out of the picture things might improve. He kept active on the sideline, though, and brought another entrepreneurial type, a farmer, into the picture. This farmer was willing to help out the cooperative because he saw the potential for its future that got me and the original entrepreneur excited in the first place. The organization reacted so violently to this newcomer that I became convinced that nothing would divert it from its self-destructive path. Shortly thereafter, I withdrew from the organization.


That was a hard choice to make. On the one hand, it felt like I was giving up when the challenge became too daunting, and that was sending a bad message to the members and employees to whom I still felt loyalty. It was letting the secretary and president win, in effect. Except refusing to participate in the charade that corrective actions were being taken was the only power I had over the direction of the organization. My hope was that leaving would be the splash of cold water needed to wake the board members whom the secretary had in his bloc. It didn't, and that was a bit of an ego blow. Again I felt I was involved in something where I had more ability than those calling the shots but that wasn't enough to put me in a position of power.


What it did do was put me at the center of a bit of a shadow government - the people who had disengaged fully or partly from the theater of the board's actions and who increasingly looked to me for salvation for the organization. I kept tabs on the progress or lack thereof, and then a few weeks later the call came. The president had been presented with a real honest-to-goodness cash shortfall which very nearly caused the coop to default on a loan repayment. The bullet missed, but it scared him enough to realize that the coop was failing and it was going to collapse under his management. He came to me. Once again I interviewed princials, collected data, and performed analysis. This time my understanding of the business and all its constituent parts was quite a bit more accurate and deep, and the resulting analysis is that much better. It's pretty solid, I think. The organization is salvageable, but it needs fiscal discipline and a complete organizational overhaul. The culture is sick, and I'm going to make it healthy.


The coolest thing now is that we are purging the bloc and bringing in all the people who'd been in the shadow organization. The energy and shared enthusiasm, and especially the collective faith in me, is exhilerating. I am going to get the organization righted and get its culture healthy through simple transparency and inclusion and fair practise. Then I want to work on the quality of the work that is being done. Our products need to be of the highest quality in order to build differentiation in this market. And then I want to steer them towards the old ways and organic ways and sustainability overall. This feels like my chance to try to prove that food can be raised humanely, in a distributed fashion, and then economicially processed into something that is pleasing to all the senses, and then sold for a fair price that pays the farmer a living wage. I feel like I'm right at the center of that, like I get to define that mission, and that its success is entirely dependent on my involvement. That's a new feeling, and a good one.