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Can you figure out when you’re business-blind and business-deaf before it’s too late?

February 2, 2009

“Blindness cuts one off from things yet deafness cuts one off from people.” Helen Keller

Put into today’s business perspective,
“Blindness cuts one off from assessing reality, yet deafness cuts one off from executing survival.” Rich Eichen

Business litigators with whom I regularly meet have been noticing a disturbing trend – increasingly, business owners come to them when it’s too late. By the time someone comes in looking for Business Bankruptcy protection under Chapter 11, all that can usually be accomplished is to pay the senior executives a few more paychecks before it’s time to close. One very senior attorney actually said, with great understated wisdom based on reality, “I talked to them a year before. Now they come in a year later and my job is to give them a decent burial”. Putting it another way, the senior executives went from being business-blind and business-deaf for about a year to now out of business.

EMT’s focus on the ‘Golden Hour’, the 60 minute window for advanced emergency treatment where severely injured or ill patients have a good chance of survival. After the Golden Hour, it’s you vs. the actuarial tables. In today’s quasi-Depression, I’d reduce the timeframe a business has to begin repairing itself from the 1 year mentioned above to a ‘Golden 6-Months’. After that Golden time, more likely than not your business (or customer for that matter) will join the 90% of companies (in N. NJ) who never make it out of Chapter 11. Given how crucial accurate understanding of your business’ health is during these perilous times, what delays recognizing you’re in the Golden 6-Months window?

Financial statements can cause business-blindness. They can easily show the business having solid receivables, plenty of inventory and assorted assets such as buildings, equipment and trucks. But in reality, if your business is just servicing debt and paying salaries, in effect it’s out of business. In previous Blog postings we’ve covered many of these various signs and considerations, so no need to rehash them.

Hearing but not listening to objective outsiders causes business-deafness. Many times, 6 months to a year before the end, you’re starting to hear from your CPAs, Trusted Advisors, attorneys and secured and unsecured creditors. The ultimate test of business-deafness is when people stop talking to you. Either it’s too late or they figure you’re beyond taking constructive input.

In my experience, the best way to avoid having a company fall into such an unhealthy state is to convene, for 1 hour monthly, a group of Tursted Advisors consisting of your leadership team, a Turnaround/Crisis manager, your business attorney and perhaps your CPA/Audit Partner. A phone or a web based video conference works well to make this as efficient as possible. The goal is to ensure your team doesn’t go blind/deaf to reality and should it come to it, further ensure the Golden 6-Months window is recognized as early as possible. And of course, worst case, should a Crisis Manager be needed, you’ll have someone already up to speed, preserving as much of the Golden 6-Months window as possible for working things back to health.

Rich Eichen is the Founder and a Managing Principal of Return on Efficiency, LLC, who’s website is and is one of their senior turnaround leaders/CROs, Program and Interim Executives with over 25 years’ experience reshaping companies, Operations, IT and key initiatives. He can be reached



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