Diana Kunde
Management Trends
Dallas Morning News

Tuesday, November 15, 1988

Most companies don't call Charlie Bahr until they're in trouble - big trouble.

The personable, fast-talking C. Charles Bahr is president of Bahr International Inc., a Dallas-based turnaround company that has assisted more than 100 troubled firms.

Bahr says he has more than enough failing companies to keep him and his associates busy. And, like any good physician, he believes in a little preventive medicine.

So much so, that he has developed his own "seven deadly sins" of bad management: clues that what is happening isn't healthy.

"I've developed a really good skill," Bahr says, "at smelling a bad situation. I call it calibrated intuition."

Here are the seven sins Bahr says add up to a sick situation. And he notes that they are not failures to understand sales, marketing or finance. Rather, he says, they are "greed and human frailty carried beyond a reasonable level."

  • Top management "starts to believe its own rhetoric." Wishful thinking takes the place of realistic appraisal and action. "Reality becomes unglued."
  • There's a failure to focus on the customer. "The customer isn't always right, but the customer is always the customer." In a healthy business, every employee - from the top down - should know who the customer is, and be acting in response to that knowledge, says Bahr.
  • "Form prevails over content ... Instead of dealing with the gut issues, I (the CEO) drive a fancy car and belong to the right clubs." This was "a Dallas favorite," during the recent real estate and oil boom, Bahr says.
  • Another favorite Bahrism: "The worth of a company is inversely proportionate to its glamour." Management either fails to set priorities, or sets them and doesn't follow them - as simple as that may sound. "'Time and cash are scarce in most companies," says Bahr, yet they are poorly allocated in a surprising number of situations.
  • The management team begins to break down. Some good people leave; other find ways to insulate themselves from what is getting to be an uncomfortable situation. There is no longer a common purpose.
  • Despite the wealth of statistics available to the managers of most companies, top management in a sick company doesn't evaluate the numbers properly or connect them to reality.
  • The final sin is the "lie and hedge" stage. "It first shows up in visible form when the officers use it on their lenders" - or when Jan. 32 and Feb. 30 become the invoice dates, says Bahr.

Bahr urges executives who see their companies headed in the wrong direction to act quickly. "When there's smoke, there's probably fire."

When Bahr does get called in, he does a two-week assessment to find out "whether the company can and should be helped, who should do it and what it's going to take."

If the problem is general management, Bahr or one of his associates is likely to step in and operate the company themselves until a turnaround is achieved. If it requires a specialist in a particular field, they'll recommend someone.

"In some cases," says Bahr, "the company is not as sick as it thought, and the managers in place can fix it." But sometimes, "I say, 'Sorry, guys, it's too late.' "

Staff writer Diana Kunde reports on management trends for The Dallas Morning News.

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