Stuart W. Looney, CPA

Crisis Management

 

Crisis management - Companies executing a  difficult transition often arrive at  a point where existing personnel can no longer provide objective analysis, or  key decision makers have either departed or have otherwise compromised their ability to lead. Mr. Looney has the experience and demeanor to assume a transitional role while gaining the confidence of all stakeholders, including creditors, equity holders, the board of directors, as well as the remaining on-site personnel. This ability to quickly gain respect and roll up his sleeves can serve your company well in quickly stabilizing your situation and efficiently refocusing the effort.    

Working with companies in transition often requires a calming and methodical demeanor which can quickly put everyone at ease and provide assurance that everything is going to be ok. While  working in these high stress environments, it is so very important  that it be recognized that stress is present at all levels, and calm must prevail before an organization can return to its former constructive efforts. This is an important function that an outsider can provide to the company as a first step in creating a longer term solution.

Obviously it is quite difficult to classify the varied  situations that can arise which constitute an organizational crisis. The  one common denominator that we have seen however is that these situations tend to all involve either a perceived compromise of senior management's ability to lead, or an actual breach of this role. At the point that the crisis surfaces, its so very important that reactions be fact driven and emotions set aside as more likely than not, management that was competent before the crisis, is probably still competent. Mr. Looney can play a pivotal role in isolating the facts and returning the context to constructive solutions. 

These situations often involve corporations with outside directors, branch and subsidiary operations, venture capital held enterprises, and other situations where there is a certain amount of autonomy between the equity holders / home office and the operating group. For one reason or another, communication, and or confidence is eroded, and usually there is a deficit in financial operating results. These situations tend to fall trap to ever decreasing concentric circles with the operating group becoming ever more defensive, and management ever more frustrated, and so on. The whole cycle tends to spin further out of control when the terminations begin or the resignations start.

In the ideal situation, a professional  will  get involved soon enough to arrest the spiral before irrevocable actions are precipitated, and the situation becomes a full blown crisis. 

As a part of crisis management, Mr. Looney can work at the direction of the equity holders to  assess the situation, attempt to repair the lines of communication to avert further erosion of the operating environment.

In those situations where the spiral has gone past the point of repair, Mr. Looney can, if necessary, negotiate resignations of the designated parties, coordinate transitions of authority, and stabilize the workforce  as succession plans are drafted and executed.

In those situations where the senior operating positions are, or are about to become vacant, Mr. Looney can temporarily fill the vacancy, assure the staff, work with the vendors and creditors, and work with the board in quickly organizing a search and retaining a replacement for the position. Its amazing how much better a recruiting effort is when the company is no longer in a crisis with a vacant senior operating position. The candidates have a sense of calm and competence by the company, do not sense a weak bargaining position, and from the company's position, it can take the time to do a proper search and orderly recruitment.

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