My Emergency Succession Plan Left My Business in Shambles

Last Updated Nov 18, 2010 12:09 PM EST

By Laura Wellington, Wellington Consulting Company, New York City
My husband Dean and I started a pair of companies, Wellington Consulting Company and Wellington Financial Systems, that provide technology consulting and investment bridging solutions. For the first 10 years, Dean managed the technology side of the businesses, I was in charge of marketing and day-to-day operations, and we had 60 employees. It worked beautifully. Then Dean was diagnosed with intestinal and brain cancer in 1999.

Dean and I continued to run the company together for another year and a half, but he eventually became too sick to work, and I needed to take time off to care for him. So I asked a connection to step in to run both businesses. Dean died a year later, and when I returned to work I found both companies in near ruins. In the midst of my grief, I had to rescue the businesses from my temporary CEO's mismanagement and devise a strategy to bring them back from the brink of failure.

Choosing love over work
Dean's diagnosis was a devastating blow. We had four young children -- the oldest was six and the youngest had just been born. I loved him deeply and felt my only choice was to step away from the companies to care for him. He would have done the same for me or our children. His illness consumed our lives, which were reduced to a cycle of a week of chemotherapy, a week in bed, and then a week in the hospital. At the same time, I had to figure out a way to fill the leadership void at the company.

The trouble was that none of our employees had executive experience. So I turned to someone who had run several successful businesses. We took the time to integrate him into the workings of the companies. He seemed to catch on quickly. Just as importantly, he knew that our children's future depended on those companies. So I was comfortable leaving him in charge with no real oversight.

A big mistake
When I returned to work after Dean passed away, I was shocked to discover that both companies were in shambles. Revenue had dropped to a quarter of our previous earnings. We were operating in the red. New client relationships weren't being fostered, and old relationships weren't being properly maintained. Even more alarming, the temporary CEO had rung up huge expense accounts, which signaled to me that he was operating the companies more in his own interests than ours.

It was a disaster. If the companies failed, I would have no money to raise my four children. I needed to turn things around fast.

Cleaning house
The first step was to fire the temporary CEO. That wasn't difficult -- I couldn't respect a man who had so utterly failed to look out for my family during our time of crisis. But he wasn't the only problem: His attitude of entitlement had infected both businesses.

Many of my employees seemed to feel like they deserved a reward for keeping the companies going, even though they were drawing salaries while my businesses operated at a loss and I wasn't even taking pay. I laid off those malcontents immediately.

But our losses were so deep that I couldn't afford to keep several of my strongest staff members on salary, either. I scaled them back to part-time contractors, so I could at least still utilize some of their skills. They weren't thrilled but most understood the situation. All told, I let 12 people go. To try to save more money, I consolidated our office space and eliminated expense accounts. These cutbacks saved us from immediate failure and bought me time to generate new profits.

Turning things around
I started by pushing the sales team to go out on new calls and to repair relationships with our old clients. Re-investing in these relationships restored my companies' core principles -- like working to suit the customer's needs in a timely and cost-effective manner -- and I am convinced it was the key factor that brought us back to profitability.

Our revenues are now triple what they were when I returned to work eight years ago. Just as importantly, I've hired and trained a trustworthy employee to run the businesses' day-to-day operations. Now I'm free to focus on running a new children's entertainment enterprise, The Giddy Gander Company.

Looking back I would have made the same decision to walk away from the companies to care for Dean, even knowing that they would suffer. I just wish that I had made a better succession plan and put my trust in a person who deserved it.

Laura Wellington began drawing cartoon figures to amuse her children while their father was sick. She later turned her cartoon characters into an animated children's television show, The Wumblers.
-- As told to Kathryn Hawkins

Resources:
  • Lindsay Blakely

Comments

Market Data

Market News

Stock Watchlist