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PCB & COMPANY
Back to Basics: A Series on Private Company
Transformation in the Middle Market
Middle Market Turnarounds: Does Your Leadership Team Have a
“Performance Management Cadence?”
In our last perspective, we discussed how
entrepreneurs who are successful at taking their
company through multiple stages of growth typically
have a strong financial acumen and a desire to
regularly review goals and financial performance.
They hold their teams accountable to results.
Their Common Trait
This class of founders shares a common trait: an
intense, religious focus on reviewing the performance
of the company every Monday and monthly results
soon after the end of the month.
Conversely, mid-market companies that “suddenly”
find themselves failing don’t have this religion.
Instead, their management library is filled with
excuses as to why they cannot capture, report on, and
respond to performance data.
For founders with a viable offering that is in high
demand, this scenario represents great opportunity
that won’t require significant effort to realize. It may
require, though, that the founder undertake a style
adjustment or delegate / transition this part of the
leadership role to another executive.
Investment groups focused on driving value through
transformation of troubled companies have the
religion. They have learned that metrics based
performance management is a key to success and that
addition of such a framework can set the stage for
producing dramatic results.
The Impact of “Flying Blind”
 Sales & Operations enthusiastically hitting record
numbers for a loss generating product.
 Applauding the team for beating production goals
while scrap/quality issues silently grow.
 Realizing the need to downsize and rationalize
costs a quarter too late.
 Inventory grows as sales decline and purchasing
goes unmonitored, resulting in excessive funds
tied up in unsalable product.
 Enthusiasm for lifeless sales leads is allowed to
continue, with no adjustment to forecast.
 “Suddenly” running out of cash, obtaining more,
then having to ask again.
Our Point of View
 Set a calendar of key meetings, such as:
o Monday Sales Pipeline
o Monday Operations and Metrics Review
o Monthly Budget to Actual Review
o Monthly Close Review
 Collectively determine and then communicate the
standard agendas, ownership/accountabilities.
 Prepare standard materials and tracking sheets to
distribute at least a day prior to each meeting
(rough cuts are OK for first few sessions).
 Agree to and publish actions (and due dates)
determined during the meeting and start each
successive meeting following up on open actions.
 Don’t allow excuses for not attending. Establish
Skype accounts for all members and conduct the
meetings over group Skype if physical attendance
is not possible. Mandatory in person sessions at
least monthly.
 Expect surprises in the early stages, but don’t
judge. Focus on developing open communication
and determining actions to resolve the issues and
prevent recurrence.
 Speed to improvement is critical, but if you try to
tackle everything at once, you will fail. Prioritize
the metrics and actions to gain momentum. Visibly
applaud successes.
 Jointly identify the key metrics that drive
performance in your business. Capture current
and historical performance and set short, medium
and long term goals that align with your EBITDA
targets.
 Track, communicate and post the metrics with
trend lines weekly. Hold separate corrective action
meetings with relevant players for areas that are off
target.
Don’t delay. If you don’t have a similar cadence in
play, you’re flying blind. The absence of such a
rhythm will only serve to deepen your risk.
Future perspectives will discuss the need to have a
budget that is realistic and is used as a means to
manage the business daily, weekly, and monthly to set
goals and drive accountability.
Philip C. Boken CA CPA #70832
philipboken@outlook.com
+1-650-823-6777 @Bk2BsicsFinance
 Interim CEO – CRO – COO – CFO – Program Leader
 F500 and Big 4 experience - middle market focus
 Turnarounds, growth, M&A, carve-outs, wind-downs
 Hands-on: focused on margins and EBITDA
 Operations and finance function domain expertise
 Lean approach focused on performance management
 Executive Coaching and Issue Facilitation Sessions
Tactically focused on working with and developing internal teams. When additional specialists are necessary, we introduce
experts from our network of trusted advisors.