Do you know how difficult it is to break a bone in the same place? Ken relates how breaking a piece or division of your company can allow it to grow back twice as strong.
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Break Your Arm
This is the podcast where I live life. If I notice something that really, really hit somebody, like in the case of this podcast, I write it down. Sometimes I even write it on my hand because I cannot forget it. This is one of those cases. A little bit ago I was talking to a group of people and I remember starting with the sentence, “Did you know that you cannot break your arm in the same spot?” If you break your arm, did you know that when it heals, it heals at that break area much, much stronger than before it was broken? It cannot be broken there again. It’ll break right off to the right but that callus, that scar, that bone matter, it almost becomes like steel. Here’s the question though, “Why not break your own company? Why not do what turnaround experts have known for years?” Merger and acquisition experts have applied these techniques and tactics for years. Sometimes when a group of people are brought into a company to rapidly grow it, the first thing they do is they take a sledgehammer and they start breaking things. They break products that aren’t selling or just breaking even. They stopped them. They break that division, they shut it down.
Oftentimes, you’ll hear of two companies that will merge together and a lot of people think, “Companies merged together because top level management, those heavy salaries can be almost weeded in half and then the people doing the meaningful work can keep doing the meaningful work, but it becomes much more lean at the top.” That’s true. That’s one of them but one of the other things that merger and acquisition teams know is they can get in and from the outside using data metrics, they can go in and purposefully break things, destroy things, and very much shut things off and disrupt. What happens is, just like the body naturally heals itself every six to eight weeks, we have all new skin. If you cut your finger, all you’ve got to do is wait for six to eight weeks, under or not under a bandage, you’ve got a new finger. The body has a natural tendency to rebuild itself.
Companies are living, breathing organisms. These merger and acquisition experts know when you break up a division, meaning all you’re doing is you’re splitting apart the people. You’re moving one person that used to run something. You’re putting them into a totally different division. You’re taking another lady that used to run a little compartment, you’re putting her into a totally different positions, sometimes just to bring it right back 90 days later. They do it because they can tell right now that division or that department, it’s static. It’s flat. It’s ho-hum at best. The bottom line is it has to be broken up. People have to be moved to another division for a period of time because that division that’s closed needs new blood. Inevitably, that division will grow as a simple result of new blood flow. That division had been cauterized. A lot of people are afraid to look at a company on paper. They don’t want to take that division and say, “Payroll is this much but it’s only producing this much.” If you continually look at those data metrics, you’re going to see clearly, “That division was growing, growing, growing, flat, flat, flat, really flat, now dropping, dropping, dropping.” Bottom line is that division is probably fine but the blood flow has gotten cauterized, if you will.
Whatever the initial energy may be, the initial seed ideas or train of thought, over time it has worn down. Over time people, especially the leaders of a division, they’re mortal, they’re normal. They go through the five phases of any position. They go to excitement, education, reality but then doubt and then clarity. A lot of divisions have one or two division heads that are simply in the doubt phase of their position, their position in life as a family member, their positioning the company long-term. Bottom line is entropy has taken hold or grasped that division. Inside that division, these merger and acquisition experts know the product’s fine. The service is fine. They’re just shaking things up, breaking it a little bit so that it can come back and heal properly. Breaking them wakes them up, gets the blood flowing and it allows ideas and innovation to thrive again.
Often, a whole company needs to be broken. I broke this company in ’11, I broke us in ‘14 and we’re in the middle of breaking us dramatically again. In 2017, we broke us and put us back together so severely and what has come out is just awesome. We just did an evaluation of all employees; the satisfaction working here is up 65% to 70%. In some groups, it’s up over a 100% if that’s even physically possible but it is. Often, a stagnant business just needs to break an arm or a leg. How do I recommend you go about this? Number one, I wouldn’t do it yourself. I would get some outside eyes. The previous podcast I did or maybe two podcasts ago was talking about bringing in outside counsel, outside advisors. I broke this company up. Carrie and I did in 2017. We shook it up a little bit. A lot of people are in different positions right now. How we do everything? How we do healthcare? How we do payroll, accounting? Everything is different in 2017 and we are really grafting back together. It’s really, really exciting. I did it with the aid of outside counsel. How do I recommend you do it? I recommend you get some outside eyeballs. You show them what you think is going on in your company or your division or with your product, and then you let them poke around and ask a lot of questions to your staff, to your clients, to your vendor. I think you might see things in a different light. Lo and behold, away you go and you know exactly what to break. For episode 330, Break Your Arm. I hope this helps. Take care.