For years, I have been doing turnarounds of distressed companies to make the businesses profitable. I believe that the main reason companies are distressed is that the business owners do not know how to hire and manage a strong management team. Many business owners do not realize how important it is to have and maintain a qualified team of managers to oversee their employees. Most entrepreneurs believe they are doing a decent job of building a quality management team to lead their companies. But there are many reasons my potential clients have never achieved their goals before engaging a turnaround specialist. Some of the explanations are:

Ownership and management do not know how to recruit and hire top performers.

Managers do not keep their superstar employees happy to prevent them from considering leaving the company to work for another employer.

Unfortunately, many companies have poor financial and operational reporting available for the president and the management team. Good reporting would help them better understand which member(s) of the management team and their employees are doing a great job and who are the nonperformers.

Most business owners don’t understand the value of spending the right amount of money on hiring a reliable, qualified, and talented controller/CFO.

Those are probably the top four reasons and the most important, but also:•In many companies, the owners have relationships/friendships with the members of the management team. Therefore, they do not objectively evaluate their performance and demand better results from them or their organizations.

Many business owners are too busy working in their business rather than on their business. This issue stops them from being aware of how vital a professional-level management team is to the success of their company.

A high percentage of business owners are guilty of setting the hiring salary below the market range for the management position and then have problems finding candidates.