Customer Reviews

The Phoenix Effect: 9 Revitalizing Strategies No Business Can Do Without

5 star:		(11)
4 star:		(2)
3 star:		(0)
2 star:		(1)
1 star:		(3)

 

 

Turnaround specialists Carter Pate and Harlan Platt outline nine strategies any organization can use to revitalize itself and rise from the ashes. The nine strategies also correspond to the chapter titles in their new book:
1. Get to the Point of Pain -- overcome denial and deception and get started.
2. Determine the Scope of your Business -- pick a market you can serve profitably.
3. Orient the Business -- aim your products at the right customers.
4. Manage Scale -- larger size can reduce cost but is no guarantee against failure.
5. Handle Debt -- restructure, renegotiate, and/or merge to enhance value.
6. Get the Most from Assets -- manage working capital to avoid cash crises.
7. Get the Most from Employees -- people not products keep a business going.
8. Getting the Most from Products -- market strategy needs to change with markets.
9. Produce the Product -- consider the options, better, faster, cheaper or outsourcing.
10. Change the Process -- reengineer for better time, cost and quality.
This book is a quick read and loaded with case examples that demonstrate the successes and failures of executing these strategies. Revitalization applies to both good companies and those that are currently troubled or distressed. I found it even appropriate for focusing or refocusing a startup or business plan. Tom Peters called it, "A damn good book." I strongly recommend it to any consultant or manager that is concerned with maintaining a profitable business. The Phoenix Effect: 9 Revitalizing Strategies, No Business can do Without" again demonstrates revitalization and renewal efforts require many different types of actions.

As one who practices in the business turnaround arena, I have a keen understanding of the Pate/Platt analogy of the Phoenix. In many cases, with the right timing, latitude, people and luck, a business heading south can be captured and "redefined" into one going the right direction.

For those unaware of the symmetry, the Phoenix takes is roots from classical mythology. The Phoenix, a young and strong firebird, would build a nest of frankincense and cassia twigs, ignite it, and self immolate once it became "old." A new Phoenix would rise from these fragrant flames, gather the ashes of it's predecessor, encapsulate them in a precious egg of Myrrh, and fly them to the altar of the Egyptian God of the Sun in the city of Heliopolis Egypt where they were carefully deposited. According to many scholars, this flight represented "the capacity to leave the world and its problems behind, flying towards the sun in clear pure skies." The ostensible lesson of the Phoenix is in the midst of prosperity and strength, we need a renewal phase or a recycling designed to interrupt the daily norms, allowing a rebirth and regeneration.

If there are two individuals with a strong sense of this "rebirth," it's Carter Pate and Harlan Platt. Pate is a Big Four turnaround specialist and Platt created and administers the certification exam for the Turnaround Management Association.

In THE PHOENIX EFFECT, the authors reveal the warning signs and critical pointers leading to a "real" review of one's business without the emotional denial typically present. The ability to identify trouble spots before they create trouble is the key, the authors tell us. The nine strategies described by the authors are:

1) "Determine the Scope" - where does your business sit in the industry you compete? Should you create new business lines, drop old ones, merge, etc?

2) "Orient the Business" - Are your products aimed at the right markets at the right time? Does your sales/growth strategy require some level of reorientation to generate greater effectiveness?

3) "Manage Scale Accurately" - can you grow your business from within with existing resources or should you consider a merger?

4) "Handle Debt" - restructure or renogotiate debt whenever possible. Create a credit facility meeting your business's need. {A word of caution: restructure credit facilities judiciously. Going back to the well too many times will create negativity, concern, doubt and potential retraction of your banking relationship.}

5) "Get the Most from Assets" - carefully scrutinize your asset bases, both tangible and intangible, to determine if they are working for your business. Any superfluous and underused assets should be considered dead weight.

6) "Get the Most from Employees" - identify and use creative strategies to increase the quality and productivity of your employee base.

7) "Get the Most from Products" - routinely review your product base to ascertain current pricing strategies, customer base and the quality a customer brings to your business. {I regularly review my client base to determine if I've outgrown a client. This type of renewal, while often awkward and painful, is absolutely healthy for both myself and the client.}

8) "Produce the Product" - are there alternative methods your products can be created, manufactured or offered proving more efficient and cost-effective? Is outsourcing a possibility?

9) "Change the Process" - model your own processes after those who have created a successful model. No change for the better is too small.

Pate and Platt provide an incredible number of real-life examples (certain aspects of which surprised me greatly...from a confidentiality point-of-view) of fatal mistakes and storied comebacks. This is a very solid read for any business owner, high-level manager, or consultant. It provides a blueprint for clarity in an otherwise complex web of uncertainty. Let's face it, any time a business is in trouble, you'll find more chaos, worry and "Chicken Littleisms" than you'll ever want to see. Creating a cohesive plan of attack designed to bring the pieces back together is the turnaround specialists mantra.

The only reason I didn't give this offering five stars was the authors' penchant for concentrating on the product section. While certainly not unimportant, the concept of crafting a turnaround strategy is much more than product direction and quality. Regardless, this book is quite good and extremely poignant.

This is a book obviuously written by people who have been on the job at major corporations making them "whole again." The advice given is straight forward, easy to communicate to those that will need to get the work done, and practical in nature. No tricks or magic wands, just sound hard hitting business advice that combined with some courage and determination can save businesses and make them prosperous again.

The authors are not only timely, but right on target. Loved the examples that make the book real and readable for both those that have knowledge in the area and the those that want to gain knowledge.

I saw one of the authors on TV and was somewhat reluctant to buy the book because he was talking about fixing big businesses and mine is really pretty small. But boy was I wrong. I bought the book, read it and already have started to improve my company.

The best chapter, in my opinion, is the one on ORIENTATION where they talk about establishing a reason why consumers want to come and buy from you. The (5) objective points are price level, quality, durability, attractiveness and convenience. The authors taught me that unless I can dominate one of these characteristics my business will flounder while my competitors draw away my customers.

This is the best business book I have ever read ! It was easy to read and understand. I'm not surprised given how one author helps major corporations as a consultant and the other teaches at a major business school. I have bought extra copies for the two people who work for me and one for my brother-in-law.

Harlan Platt and Carter Pate have created an excellent work balancing the "real world" of corporate renewal and "academic analysis". Most works on the subject are either rehashed war stories providing little insight into the subject or long and dry academic works missing the nuances and human elements of fixing companies.

The nine strategies focus on the issues that most turnaround consultants deal with one way or another during their work. While professionals may mentally go through these exercises and use these strategies, this is a solid summary for everyone else to learn from and follow.

As a turnaround consultant, I have read almost all the books on the subject and found this one to be closer to the truth than any other.

Having taught in a business school for several years and having read enough business "best sellers" in my time to form a limited expectation, I was more than pleasantly surprised when I read The Phoenix Effect. This book is different. Every page contains something business people need to know. It is easily read yet filled with great insight and wisdom. I will be asking students to read The Phoenix Effect in the future. You should definitely read it too.

Henry M. Garelick

This a welcome strategic and philosophical outline for reviving a business - from minor problems to the catastrophic. Human nature brings us to grab at straws in an emergency - this book brings sanity to the equation.

There are nine steps to this revival. The first two are inward looking:

1. Diagnose the problem(s) and area(s) of pain
2. Determine the scope of your business - should it be re-adjusted by expanding, contracting or by being maintained?

The next step is outward looking:

3. Determine your orientation - what level of value do you provide? what level of utility?

For growing companies:

4. Manage scale - Economies of scale should be realizing increased savings and higher profit margins.

For shrinking companies, stress:

5. Handle debt by re-structuring, re-negotiating or merging

Monitor the ebb and flow and get the most from:

6. Assetts - regularly review summary against benchmarks, maintain a good assett/liabilty ratio, and install procedures to limit knee-jerk spending.
7. Employees - Human capital - Evaluate labor force net worth, yeild vs. cost, and incentive analysis
8. Products and Services - focus on appearance, brand status and pricing. Modify cosmetically. Form new models based on the original or delete totally or by specific markets or by slenderizing
9. Manufacturing - improve efficiency, share platforms with other companies, or outsource

The book wraps up with by discussing OPIs (original process improvements). OPIs should be focused on reducing time waste, lowering cost and enhancing quality. The more employees involved and the more input during an OPI, the better.

Good Basic and General Book - 5 stars

The authors, specialists in restructuring under-performing companies, present a nine-step program, to guide companies in need of renewal, ranging from minor changes to a total overhaul. The steps are: identify the most serious issues; determine if the company should stay the same, withdraw or expand in scope; clarify the orientation of the business and if the company lives up to its mission; decide if the company should grow or contract; determine the best way to handle debt; discern how to optimize resources; get the most from the workforce; maximize profit from products and customers; and pinpoint the best alternatives to producing products. A final step is to optimize process efficiency. Using numerous cases, the authors present clear, to-the-point guidelines for turning around a company. Highly recommended.

The Phoenix Effect is written by a "world-renowned turnaround expert" from PriceWaterhouseCoopers and a professor of finance. The book provides an interesting glimpse at the things a turnaround team will look at when they analyze a troubled company.

However, there is a glaring inconsistency in the stories about Tidel Engineering, Inc. in different sections of the book.

From page 18, "The safes were so well made that no one needed replacements, and repairing old ones was less expensive than buying new ones... This is the point at which coauthor Carter Pate was named the company's interim president and chief executive officer."

From page 221, "it was clear that our quality was so poor that we could not distinguish between a safe that had just fallen off a truck and a new one returned by the customer."

Umm. Which is it? Did the company have excellent quality or atrocious quality? This leaves me wondering how much of the book is about real examples and how much is imaginary.

Both authors are members of the Association of Turnaround Professionals - I bet they are really good at the hokey pokey.