Ken Campbell was always the type of kid who had to stick his hand into the fire to verify that it’s hot. These days, it’s companies that are on fire and Campbell is right in the middle of the heat to get things turned around.
His most recent challenge is Standard Pacific Corp., an Irvine-based homebuilder that lost $1.2 billion in 2008.
Campbell came to the company as a partner of MatlinPatterson Global Advisors LLC, a private equity firm that invested more than $500 million in Standard Pacific in May 2008. Campbell had to challenge — and change — how Standard did business to save the company from bankruptcy.
“This was a solid homebuilding company in a bad situation that was getting worse,” he says. “We knew it wasn’t at the bottom of the market — of course, ultimately the bottom was farther down than we thought.”
More specifically, 2007 revenue of $2.9 billion dropped to $1.5 billion in 2008 as gross profits plummeted from a negative $200 million to negative $697 million. The operating loss bottomed out at $1.2 billion in 2008. The stock price fell to 67 cents. By 2008, business declined from its peak by 60 percent while costs held steady. Debts were due and repayment was uncertain. The company was spending more money than it was bringing in, and the market’s downswing was only making things worse.
After seven months, the previous management stepped down. So Campbell — a turnaround expert — took things into his own hands by taking on the role of president and CEO.
“People ask me how do I figure out what’s wrong with a company, and the standard story I give is, ‘Well, I go to the receptionist on my way in the door and I ask them what’s wrong with the company, and then I go upstairs and do it,’” Campbell says. “In other words, the problems are obvious. It’s having the willpower and sometimes the resources to implement the solutions.
“It’s like when you’re 20 pounds overweight, you know you need to lose weight. The problem isn’t figuring out what to do, it’s doing it. … It was pretty easy for everybody to see that something drastic needed to be done.”
As an outsider, Campbell had to rely on employees’ input to help him steer Standard Pacific toward profitability. He learned that if you ask the right questions, then solutions can be as clear as the problems.
“Freeing them up to challenge themselves and not telling them what to do is going to make them and the company much more successful,” he says.
