Some of you know I am the CIO of a company that went into and out of chapter 11 restructuring in 53 days, completing with the sale of our company to a stalking horse private equity firm. I started with the company about seven weeks before our chapter 11 filing.
What all of that means (for the sake of this story) is:
- My first four weeks were heavily influenced by taking out costs and conserving cash
- The next three weeks involved “discovery” and other processes leading to bankruptcy
- We spent 53 days identifying operational processes, exception reports and controls to stabilize the business
- We now have new owners and need to execute and grow
The beginning of rapidly shifting narratives
The effect of shifting narratives on my moods, strategies and actions really showed up for me in the last week.
My starting narrative involved transitioning from consultant to CIO, taking longer-term ownership in outcomes and building closer, more collaborative and longer-term relationships within an executive management team.
At the time I entered the company, I had a weak narrative related to cost-cutting in concert with managing cash – my consulting stories balanced Speed-to-Value, Return on Investment and even “IT as a Profit Center”… but if you don’t have the cash to invest, those narratives are irrelevant.
Then came the filing
As I refined my thinking along those lines, we transitioned toward the chapter 11 filing – when the “discovery” process, the lawyers, creditors and others who consumed my business partners on the management team overwhelmed opportunities to take out costs.
My IT department lapsed into a mode of report generation and setting up user credentials like I have always thought it might have been like back in the 1970’s. All the talk of 2012, plans, budgets and forecasts disappeared because those narratives became increasingly irrelevant in the imminent bankruptcy.
Debtors-in-possession are not owners
During the restructuring our stalking horse private equity firm was the “Debtor-in-Possession” – they agreed to finance our restructuring budget leading up to the sale of the company, planned for 60 days out. We worked to stop profit seepage, improve operational controls, produce exception reports and make the human processes more attractive for potential buyers.
IT during this time was not reactive, per se, but worked aggressively on point solutions to take care of basic blocking and tackling, even if our “fixes” weren’t sustainable in the long run. What I understood (but what had not really sunk in) was that the PE firm was not going to approve strategic investment during restructuring because they might not end up owning us in the end… there was still an auction to take place when we were ready to emerge from chapter 11.
The days leading up to emergence
Then in the days leading up to our emergence from chapter 11 (perhaps as many as two weeks, but not more), we started to get the green light on strategic initiatives that I had surfaced back in October/November. We started asking how quickly we could pull projects out of mothballs and how quickly we could realize the returns. Things were starting to move again.
Here is where I experienced my great learning opportunity – I failed to fully recognize the meaning of the shift in priorities between October and today. Clearly, the situation had changed from one of cost-cutting and cash preservation to one in which we could make investments to gain efficiencies and both operational and strategic improvements… but there were many other facets, not all of which fit into this post.
We had also lost catalysts
Just before I came on board, the management team decided to change our clinic management systems, which would have changed custody of our data and reconfigured the way everything would have to come together for effective operations management. That domino created a cascade of other strategic and tactical possibilities which augmented the business case for some of the fall initiatives I had planned.
One of the first decisions in our restructuring was to halt that initiative. So not only were we in a different cash situation, but one of the catalytic drivers for those projects had disappeared in a single decision. The fundamental situation had changed, but I had not reflected sufficiently on the drivers for our projects.
Summary – as a consultant…
I noticed in this sequence of events how my thinking (and resulting actions) lagged behind the shifting narratives. A consultant coming into the situation (even myself in a former role) might have arrived at “obvious” assessments, but I held on to some fundamental wish to keep things simple – to keep our starting situation unchanged even though it wasn’t.
I accept that something in that has to do with a human need to understand our situation and make sense out of what we intend to do – it also explains something to me about my customers in the past, who may have needed my consulting help just to see things more clearly and to disrupt their habits and traditions. Past colleagues – I have a new-found humility about that.
For a day or so, I really let this affect my moods. Then I observed that the way “out” of the situation was to ask for help – to talk to my team and fellow executives – to not attempt to move ahead with plans as if I were alone. To live in a narrative of aloneness is to be closed to the help you need to get out of it.
As soon as I opened up to the help around me, the change in narratives became clearer, my networks of help became more of a help to me, my thinking reopened to new possibilities… and my moods returned to positive, creative, constructive and ambitious for the future.
My objective in sharing this is to share with you my noticing in the event that it can help you also revisit your narratives, which may need to change as often as mine have in the last few months.