The art of the turnaround

It’s the management

With more than 40 businesses under his umbrella, many of which were purchased out of bankruptcy, Heisley knows what kills a company — management.

"If the company had no problems, you wouldn’t need any management," Heisley says. "Management is there to look out in the future, see problems developing and steer the ship around those rocks and problems.

"What happens many times is management, over a number of years, has a tendency to say, ‘This has worked for us in the past, this is what we do.’ They lose their ability to be flexible enough to handle changes, and if you really look at it in five years, 75 percent of what you’re selling is going to change. In effect, over a five- to seven-year period, you’re recreating your company. If you’re not, then you’re more than likely on your way to going out of business."

Often, though, in the smaller companies Heisley acquires, everyone in the company knows the problems reside with inflexible management, but no one is willing to do anything because of a personal relationship with the employer.

"Generally, the problems in the company revolve around people," Heisley says. "You have to bring in new people with new ideas, and some of your best friends are the guys that are going to have to be replaced. It’s just human nature to not want to make that decision.

"A guy like me coming in, who has no relationships with people, it’s easier for me to do it."