World Monitor Mag WM_June 2018 web - Page 92

additional content Conversations that kill your culture Deceptive messages can undermine your enterprise from within. Relabel and reframe them to develop positive narratives. by Jeffrey Schwartz and Josie Thomson In the early 2000s, Transpacific Industries (TPI) was on a roll. Its founder, Terry Peabody, had built it from a small coal ash recycling company into the largest Australian waste management enterprise, making about 50 debt-fueled acquisitions along the way, and had become a billionaire in the process. He was a press-shy business leader, nicknamed the “Golden Garbo” for his company’s rapid growth, and known for his idiosyncratic strategies. TPI’s expansion culminated in 2007 with the purchase of a waste management business called Cleanaway f or A$1.25 billion (about US$1.1 billion) — an extraordinary amount for that industry in that region. Then came the global financial crisis. The bottom fell out of the industrial waste removal business, one of Transpacific’s most vital sources of profit. The share price, which had been A$9.96 (US$8.96) in mid-2007, fell below A$1 (US$.90), and TPI received an A$800 million (US$648 million) bailout from the private equity fund Warburg Pincus. After Peabody retired in 2010, the company went through three chief executives in rapid succession. It fell so close to bankruptcy that in 2011, multiple turnaround and restructuring activities were running concurrently. In this context, the board of directors approved the recruiting of an outside turnaround specialist named Keith Bailey as general manager of one 88 world monitor of TPI’s troubled divisions. “I was told, ‘Here are the keys. You’re on your own,’” he later recalled. “My directive was: Find out the problems, fix them quick, get the business back to profitability, and position it for divestment within nine months.” Rescuing any part of Transpacific was an enormous challenge. As an article in the Brisbane Courier Mail put it, the company had “so much debt it almost fell over.” TPI had landfills that were running out of room, overdue compliance costs related to new environmental regulations, and a reputation for operational waste and inconsistency. Its internal division leaders barely communicated, and they often worked at cross-purposes. But the biggest problem in the company may well have been the stories it told itself: deceptive organizational messages that were embedded in its culture and repeated constantly throughout the enterprise. During the high-flying years, the messages had been exuberant and confident: We’re extraordinary. The rules don’t apply to us. Now, they were black: No one can save this company. There’s going to be a bloodbath. It’s everyone’s fault but mine. None of those messages turned out to be accurate. But the darker ones would have dominated decision making at Transpacific, and led it to further decline, if Bailey and his fellow leaders in the turnaround had not addressed them directly. During his two years as general manager, Bailey held repeated