Turnarounds Aren't for Sissies

April 7, 2009 – Why Big Corporations Don’t Make Sense – Johnson Controls

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The day started off where the previous one left off. Scotch sent an email asking for informationthat he had already been provided. I cutand pasted it into a new document, renamed it so I could track what went outwhen, and sent it to him. He wanted toknow severance terms and project assignments. We agreed to talk at 2pm. At 2pmit was again a rather short call. Scotchasked if I had defined what an exchange of severance meant to my staff. I told him they understood that this buystime, but that the intent is to divest Radiance. If Radiance became self supporting again,then that would buy time, but that’s all. There would be no reprieve where Radianceremained a part of Purple. I also explained that once we have fully agreed tothe time frame Gray will allow, that Radiance staff must all approve theagreement before it becomes official. Iensured that the document I provided to Scotch indicating what Radiance staffwould exchange was put together based upon prior discussions and wassound. We’ve had three internalconferences to discuss this situation and I have specifically asked each personwhat they are willing to do. Scottsuggested that he was going to look at the numbers one last time and get backto me in the morning.

Instead of waiting on Scotch, I took the ball and moved itdownfield by producing a 1/3 page document entitled “Radiance April 2009 – June2009 Operating Plan”. It simply listed who would continue, one layoff, monthlybudget amount, expected revenues, monetary value of severances and retentionbonuses given up. That was all. I had a great economy of words – directly tothe point. What it did not include wasany references to what-ifs, providing maximum wiggle room for whoever shallinterpret it at a later date. What-ifs could have been missing our revenuetarget within a percentage or during a timeframe. Instead, I pushed for a broad stroke of 3months to make or break it, even if itcame down to the last day and some heroic effort to cross the finish line. Of course that would skew the numbers makingshutdown in April the most economical outcome, however, I was not going to givethat fight up easily. We had two out ofthe last three months with reasonable although insufficient revenue in thishorrific economy. With spring and summer coming, our customers’ spending hadalways been healthier in spring than at any other time of the year, and I wasfocused on getting us through that period to give the firm a fighting chance.

With the current situation, one might think that all handson deck and desperate measures were required. However, past cultural norms atRadiance, that were counter to our situational needs, arose once again. A potential client agreed to a conferencecall during Ed’s one day off that he was wanting to take (he had reduced hisvacation from one week two a couple days for a client, then to one day). Now I really don’t mind people takingvacation, however, during this dire time I would expect people to be ultraresponsive to potential clients. Taking 30 minutes out of a vacation day totalk to a potential client would seem like a minor inconvenience - if aninconvenience at all. I just did notunderstand this rigidity towards time off, when, as a company, we wereextremely flexible in allowing time off whenever and many times not even countingvacation days for afternoons taken to pick up children, run necessary errands,etc. That was just another reason whywhen we hired new staff we required the “hell bent to succeed” mantra to befully embraced. That meant no excuses,pedal to the metal, 24/7, and holding people accountable for results. Unfortunately, these driven to succeedmantras were mostly all foreign concepts to this coddled group, even our newhires, that were used to corporate nose wiping.

On the marketing and sales front we continued to be led through the depths of Johnson Controls long approval process. I told Chanel I needed no reminding of why I would never make it in a big corporation. I demand swift action, authority, and accountability at all levels. I could not believe that we were in the fifth month of trying to get Johnson Controls to approve two low level staff replacements (staff augmentation). They had likely spent more than half the $80,000 in the contract setting up meetings, justifying why this was necessary, and talking about the subject. Not to mention that the money we could have saved them on their projects, or revenues they could have earned from their clients were continuing to be pushed out by bureaucratic processes. This just continued to reinforce my belief that small firms are better for the economy because people actually have to perform some value adding function – whereas at large firms most people are there to support the monster and actually produce nothing that adds value to this planet.

Monday April 6, 2009 – Turning the Tables on Purple

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Scotch came back from his day long vacation and we weresupposed to talk about the “plan” again. However, as I had learned, numbers and evaluation mean little. Scotch had no feedback to offer on theinformation that was presented to him and he was not prepared to work on it rightthen. So I reiterated matter of factthat remaining open via an exchange of severance and retention bonuses to buy 3months on a reduced operating budget was the most economically justifiedapproach. Even though it might have seemedmore prudent to close immediately, the numbers did not suggest this. Besides, we still had active projects andcould use the time to turn any remaining lemons into lemonade. I assured him that I had beaten the numbersfrom every direction and that our staff was on board to give up something toget the extension. He said he would senda couple questions to clarify a few issues. I knew he was busy with other Purple matters, so I suggested we talkagain tomorrow.

Instead of ending the conversation, Scotch changed tack andspoke about the Mukesh case. Mukesh was still employed by Dewey, Cheatham, andHowe, but DCH was not going to help him. Scotch said Mukesh was perturbed by this, but mostly just wanted Scotchto make the lawsuit go away. From theconversation with Mukesh, Scotch said none of the one of the “Paresh’s gonerogue” language came through into the conversation. I suggested that instead of Mukesh helpingour case if he turned on DCH and showed us where the bodies were located, itmight be better to just continue to pursue him personally, since Mukesh was a SIGNIFICANTbeneficiary of the earnout agreement with Purple. I saw that pile of money was very direct andeasy to recover from his sound financial state.

After Scotch, my call with Jason was in just 30minutes. When we finally connected, thecall went like this. Yes, I’ve spokenwith Scotch and we agreed that exchanges on severance and a brief timeextension are the most economically justified approach. Scotch is busy today but we will talktomorrow and have a plan finalized by the end of the day tomorrow. Jason then suggested that I not participate inthe monthly managers conference call (I thought, hmm, will I be a major topic,or is he trying to shield me from something? Then I thought, thank God I don’thave to waste another three hours being bored by the talking head.) Then Jason said, yep, sure, thanks, gottago, bye.

In our Radiance sales call, we discussed the couple ofproject leads that we came across that were applicable to Purple. I suggested to our team that in the past Radiancenever received any credit for bringing these projects. I decided that we wouldinstead take the Purple tactic of cutting the other firm out, and Radiance wouldmaximize our involvement by inserting ourselves into the projects instead ofturning over the leads to Purple. To dothis, I asked Chanel to produce a capital projects marketing piece and I –based upon my experience running these types of projects – would playintermediary and keep Purple out of our customer’s wheelhouse until Radiancehad performed whatever work we could get paid for. Otherwise, it could easily become the same oldsong and dance where Purple shoves Radiance aside because the big dollars arein construction not in engineering.

Saturday April 4, 2009 – Bringing Townes Closer and Trying to not Get Burned

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Ed emailed me asking if I had time today. Since when was I ever off the clock? Anyway,his first idea was to cut everyone’s salary to a maximum of $150k to matchmine. He said that was the fairestway…it also meant he took a small cut whereas Rod, who made the most in ourfirm, took a significant cut. I agreedthat it might make sense, but we were in a very precarious position and I thoughtde-motivating anyone, when we could have 3 more months to prove this out, wasasking for trouble. So I hesitated onthis even though I thought it was a possible way to make the numbers worktemporarily. But was this penny wisepound foolish? Perhaps. At the end ofthree months, I needed to have a dedicated crew of people that would follow mewherever we needed to go. I didn’t needto find myself back in a situation where we were carrying dead weight becausepeople were de-motivated.

The other idea Ed had was a good one. It would guarantee our landlord that ourparent would payout the lease if we went under, if he renegotiated a good ratefor the last two years.

Townes was back in the picture again and I gave him way toomuch information about Jason’s emotional state when it came to Radiance. After this weekend I was also burned aboutthe options available and now it was simply a matter of finding a way totransition the firm as quickly as possible – and keep mine and Chanel’sseverances intact since we knew we would not make the transition into the nextphase of the company. I explained toTownes that our billings were half our burn rate the last three months and wecould get some concessions from staff, but only if their downside risk (no joband no severance) was covered somehow. Idoubt any purchaser wanted to cover the severances. I informed Townes that we had another smallerinvestor that might provide some cashflow, but only cashflow and not enough tobuy the firm or cover severances.

Friday April 3, 2009 – Simply Frustrated

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Chanel and I began the morning, her in Orlando, me in Raleigh, going over ournumbers again to make sure we had not overlooked any items, that we were reasonablyaccurate, and that we understood the basis of our scenarios. We had to make sure that I was ready to workwith Scotch and had my numbers down. Chandra and I knew where we wanted to drive the answer, and it onlyinvolved one layoff, not multiple layoffs.

Apparently Scotch took the day off so all the scrambleduring the morning was for nothing - or really just not as urgent as wethought. Scotch did send an email updateon the legal action against Mukesh. Scotchand Mukesh had a conversation, then Scotch told the attorney and me that hewould update us more fully on Monday.

At noon another call from Chanel telling me that the “godsof business development” had packed up early and were trying to catch an earlyflight. I didn’t understand. These guysdisappeared in the evening to hide in their rooms instead of meeting peoplethat just might be of interest to us and then they packed it in early to runhome instead of squeezing every last possible moment out of theconference. This really made me rethinkwhat I was up against. God helps thosethat help themselves, but these guys want handouts. If they wouldn’t fight to succeed, then wasit my problem with leadership, or was it a cultural issue, or motivation? Sometimes I just wondered what I was doinghere.

One of the early leavers (Ed) showed up in the officemid-afternoon. I wondered what I neededto say to him. Since a lot of our success rode on him working with us, I chooseto focus on showing him the starting point for negotiating with Scotch over thebudget moving forward and the salary basis. I also showed him how all thetotals work comparing shutting the doors now, laying people off as they workoff the last few contracts we expect, and the scenario Chandra and I thoughtwould sell.

With everyone at Radiance holding their breath, I let themknow that Scotch and I were working on scenarios based upon their willingnessto exchange severance. In the interim weneeded to continue selling work –because selling work was the key to continuing operations.

Thursday April 2, 2009 After 5pm – NOT Hell Bent to Succeed

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The 5pm call with Jason was typical of many of the calls wehave had lately. It was brief, maybe tenminutes. The comments were fairly direct. Instead of a collaboration of ideas on moving forward, I always feltlike I was on my heels having to constantly deflect negative comment afternegative comment. I decided that this isnot a healthy way of working. Myperspective was one of analytical problem solving and collaborative decisionmaking, not having to defend things before they even occur. Unfortunately, his mental state when it cameto Radiance was one track. He had noreason to believe it would do anything and was not interested in workingthrough to a resolution. The board meeting was a perfect example of this. Jason started the conversation off saying, “Iguess we need to shut it down next week”. I took control of this conversation at that point and said, I know youdid not bother to look at the numbers, but are you aware that closing the doorsnow is more expensive that leaving them open a couple more months. I told him that I would make THEeconomically justified decision and work with Scotch to verify the numbersand negotiate with Radiance staff to ensure that everybody is on board with the waywe wind it down.

Around 8pm I got a call from Chanel in Orlando. Apparently, our fearless team of five that was supposed to be in Orlando schmoozing withthe potential customers wasn’t. In fact, the account executive that had acustomer there ditched his customer to go running and sit in his hotelroom. His hotel room…really??!! Instead of a fearless group of 5, it was afearless group of two! Our VP ofBusiness Development, in observation of Lent, decided he would rather get a huge cookie and hide out in his room thanschmooze. Our VP of Distribution decidedthat a college basketball game was more important than rubbing elbows with abunch of potential customers (the people that we spend tremendous amounts oftime and effort trying to get on the phone or meet for a few minuteselsewhere). I was livid!. These idiots were not taking advantage ofevery opportunity to get to know their future customers while I fought with Purpleover keeping the company open and about not cutting people loose. There was a huge gap in how much effortpeople were willing to put into keeping the doors open. At least our Latin Lover (Rod) and SchmoozeQueen (Chanel) salvaged the night with our customer and potential customers untila respectable 1am and 3am.

I guess the cultural difference between entrepreneurs andpeople that have never truly taken a leap out the window and relied upon theirwit, grit, and determination to feed themselves was too large a gap tobridge. Culturally, Chanel and I knew wewould only hire and keep people that truly understood our mantra “hell bent tosucceed”. If we were not looking to laystaff off for lack of work we would definitely be firing people for failure tobe “hell bent to succeed”.

On Thursday night I sent Chanel an email “as much as I don’twant a final answer, I cannot take much more of this not knowing.”

Thursday April 2, 2009 – Feedback from Purple’s Board Meeting

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I decided to reach out to a couple of people today. One was Primetime to find out if the meetingfor the following Friday in Raleighwas still on and what their agenda was. The other person was Townes.

My 2pm call time came and went and Jason rescheduled tosometime after 5pm. I was able to get a previewfrom Scotch who could only really say that the board meeting was odd. Here’s what he told me:

Jason opened themeeting describing the situation at Radiance as being in wind-down. The board threw around ideas about how towind down. They asked about saleoptions, they asked about finishing any contracts in place and that was it. They did not put the different options on thetable, look at any of the numbers we provided to them, nor consider scenarios..

Scotch did not even get to present the multiple scenariosthat Chanel and I worked so hard to pull together. Those scenarios showed thatit was nearly a breakeven proposition to leave the firm open for another 3months as to close it down right away. Thislack of focus of the board to me was MADDENING.

This morning I got call from an old acquaintance who told mehe left CH2M Hill and wanted to talk about Radiance doing some work incooperation with his new firm. His newfirm was a large offshore engineering firm based in Indiaand they wanted our help in facility design work in China. I asked Sven to meet us in the office at3:30. We talked about this opportunityand agreed to have a conference call with India the following week to getmore detail and put a proposal together.

The offshoring company was an unexpectedly positivemeeting. He talked about who his firmwas working for, GE, and then got right to asking if he could get access to ourautomotive and consumer goods connections. I didn’t say much because his discussion touched upon words I waslooking for “acquisitive interest”. Hisfirm had acquired or merged with several other firms and was still in the modeto acquire firms. They were particularly lacking in the skill sets at Radiance. Since this guy was an acquaintance, I wasn’tgoing to just jump right on those comments because I never knew whatinformation he had garnered from the grapevine. He had some very pointed questions about our relationship with ourparent firm, to which I more or less deflected by saying that it hasn’t workedas well as they had hoped, but it did have some success. I left it that we should work together on afew projects and see how the relationship develops. I emailed the next day to say that we wouldbe willing to make some customer introductions if he would pay for any tripsfor joint marketing calls. He agreed.

Wednesday April 1, 2009 (April Fools Day) – Purple’s Board Meeting

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What better day for parent firm’s board meeting than Aprilfools day. I tried working on a fewmore scenarios but could not focus. It wasso difficult to go all out when I was drained of energy and knew that theanswers I wanted were not likely to be straightforward, nor would they be easyto get. After working during the morningand feeling like a cat trapped in a cage, I had to stop focusing on what wasout of my control and do something I could control. My yard had been neglected long enough and alawn mower was both more predictable than a board of directors, with the addedbenefit that I could see instant results with the lawnmower, not so with aboard of directors meeting. So I spent acouple hours at lunch weeding and mowing to work off that nervous energy.

Half our company went to Orlando today for a conference that included30 pre-arranged meetings with potential customers. We also had a booth and a customer coming downto do a joint presentation on a supply chain model we built for them. With all those people out and about, I wasgetting very few calls to distract me from the board meeting.

At 5 pm I sent an email to Jason asking him what we shouldbe prepared for. He told me that theboard had good things to say about the effort trying to save Radiance, but theyhad to stop the bleeding. We agreed totalk at 2pm the following day.

The only remotely interesting email of the day came from analliance we paid to belong to – BDO. They wanted to know why we hadn’t paid our dues. A little over a year ago I told BDO that ourcontinued membership in their group was going to require that they produceresults. They pointed to all the revenuethey had driven to us, unfortunately all that revenue was not so directlyproportional to profit. And the totalprofits had definitely fallen short of paying the dues for the membership. In fact, once dues were taken out of profitsfor that project, we had been underwater for a long time. These guys were only focusing on top linerevenue comparison, without considering true profitability measures. I had toshow to Ed and Sven that the relationship wasn’t working. It wasn’t even closeand I just could not part with the amount of money they wanted to be part oftheir alliance.

Tuesday March 31, 2009 – Grinding Out Final Options

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I awoke on the day before the parent company meeting with abit of the fuzzy head from drinking too much sugar laden wine late atnight. A quick shower and a glass ofwater eased it while I waited on everyone else to get up and run forcoffee. While I waited I turned on Siriusto Octane to get some good blood pumping rock going and raising my adrenalinelevels. As you know, nothing clears thehead like adrenaline. Thirty minuteslater I had outlined the talking points for Jason and roughed the spreadsheetfor a complete analysis of costs and tradeoffs.

After running out for coffee we went through thespreadsheets looking at who would trade what for what and how we could cobbletogether a comprehensible set of numbers. Every time I did this I always thought about the saying “Figures don’tlie, but liars figure”. So while I try to be as accurate as possible, I alwayserr on the side of being approximately right instead of precisely wrong whenworking with numbers. I also anticipated a phase of negotiation, so I didn’tget wrapped around the axle over a few thousand dollars either way.

The scenarios compared the cost of paying out severancesversus continuing to operate by trading off severances, any unpaid bonuses,etc. As long as we could show that it wasless expensive to run for another three months, even if we had to pay remainingseverances at that point, that we would get an extension. What we hoped toaccomplish was to get a three month extension until the end of June before wehad to reevaluate the situation. Somethings had to happen by that point, including finding an outside buyer, orinvestor, or have the economy turn around enough that we breakeven, somethinghad to happen to continue to breathe life into this turnaround.

The problem with trying to turnaround a small firms is theprecariousness, influence, and dependence on individual players. If large firms are fleets of cars, where youcan just reduce the fleet number, small companies are ONE car, where cuttingsomebody is like removing parts of the car. You begin by cutting things like the roof liner, door panels, doors,etc., trying to keep the car drivable. You lose the radio, lose the spare tire. That process is ugly and is constantly inhibiting the company’s abilityto fully function.

We received an update on the lawsuit with Dewey, Cheatham,and Howe. Teflon spoke with Scotch andtold him that their counterclaim on the lawsuit would be DCH’s expenses forhaving to hire Radiances’ staff that were fleeing in order to be able todeliver work for DCH’s clients per the alliance agreement. That was met with outright laughter. First, the alliance agreement gave Radiance afirst right of refusal, not a mandate to perform the work. Second, if DCH hadthat much work, then Radiance would be in much better financial standing tobegin with. Third, DCH hired their owngroup of consultants, could have other alliances, or any number of things tomitigate any shortfall of consulting talent. To purport that DCH was held at bay by two or three employees leaving Radiancewas preposterous. I guess this just goes to show how creative attorneys can getwhen they don’t have a real leg to stand on. The other side of this legal action was that DCH simply thought that Ihad “gone rogue” a la Sarah Palin. Teflonand DCH were really banking on the fact that Purple was not litigious in natureand in my opinion let far too much non-compliance with contracts slide. However, this issue was a very clear anddirect violation of every agreement Teflon and Mukesh signed with Purple and DCHwith Radiance. From our side, we reallydid want this to work out in a settlement of some sort. Somebody had to stand up for Radiance andlitigation was the only way to get DCH’s attention.

In addition to DCH’s suit, we had a suit directly againstMukesh on the basis of a violation of his non-compete and a violation of hisearnout agreement. He was just served lastweek, on March 26^th. We wereinformed that DCH was not providing counsel nor were they indemnifyinghim. This was highly unusual for a firmto refuse to cover an employee, especially a highly paid Managing Directorposition. Now we were waiting to seewhat rift developed there and tried to understand what DCH’s strategy was.

Monday March 30, 2009 – DCH Lets Mukesh Fend for Himself

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About 3:30pm I decided that to be the most effective informulating a plan and going through numbers, options, etc., that I should beface to face with Chanel. By 4:15 I wasin the car with the wife and driving to Charlotte.As usual there was an accident on I-85 requiring a slight detour and making thetrip about 45 minutes longer than it should have taken. Instead of frustration taking over, a littlecountry driving made the trip more enjoyable than normal with new sights andfarms and smells coupled with a change in the driving speed. My wife started reminiscing of living in thecountry and wondered why we felt the need to live in a downtown neighborhood.

We arrived at Chanel’s around 9:15 and decided to goimmediately into assessing what we had to get done. We determined two courses of action, one wasto assess the tradeoff scenarios that we felt would sell internally to ouremployees and the second was to give Jason enough good news and positive focusthat despite the overall numbers being pretty bad, it would give hope that wehave turned the corner even in this horrendous economy through determinationand creative cost containment.

Unfortunately, Jason, as our messenger, and as the CEO of a$700mm firm, runs on emotion more than logic and that will be read by the boardinstead of the positive message he is to deliver. Remember the board…many self made successfulold men that haven’t had to worry about making the mortgage, sending the kidsto school, or anything like those things that affect the rest of us. To them, reasoning through completelyinappropriate analogy and story-telling trumps most spreadsheet and experiencelogic.

We ended the evening around midnight with an old friend frombusiness school dropping by after his adult soccer league game to have a glassof wine (actually, since it was Lent we drank the wine and he drank a coupleglasses of water).

Update for the Purple board provided via Blackberry directlyto Jason:

Board instructed Purple to divest Radiance. Progress to date:

*Transit ran us through the gauntlet but passed two weeks ago. Progresswas too slow and we pushed them too hard.

*Paresh & Chanel have been pursuing recapitalization with privateequity firms including Townes who looked at buying Radiance 2 years ago. 2firms are potentially interested S-Capital in Charleston and Townes group.

*Radiance staff have been discreetly soliciting interest from DHL,Kuehne & Nagel (logistics firm), URS (engineering firm), and Accenture topursue sale of brand or hiring of staff

*Transit will be in Raleighnext week and we will introduce them to staff

Radiance financials

*improved during Jan-March with $300k in billings

*have a $230k backlog with projects lined up for April - June

*signed agreements with Rockwell, JCI, and Alcon to deliver services –Non definite quantity type

Radiance Winddown

*Radiance staff willing to exchange some severance for extension of timeto sell firm (value of rougly $100k)

*Radiance scaled back would have $100-125k per month expenses

Radiance suits against DCH

*Radiance filed suit against DCH, arbitration clause, suit alleges $600kin damages

*Radiance filed non compete suitagainst Mukesh, served papers last week

Saturday March 28, 2009 – Possible Management Buyout Grinds to a Halt

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The internal call on Saturday was good because everyone hadtime to think through options, it was also bad because I could see that thethree weeks they had to deal with this information was taking its toll on themmentally. If they had known about theconversations at the beginning of December then they would either be gonealready or would have stopped trying long ago. Rod and Keith, two of our highest paid people, were unwilling to givealmost anything to either buy the firm or buy more running time fromPurple. I thought to myself that thesewere not entrepreneurial types and these are also not the types that think ofothers. I found it a little off-puttingthat I was working so hard to “save” their jobs and these two were so focusedon saving themselves. Most people werewilling to exchange a month of severance for every two to three months Purplewould continue funding the operation. Most people were willing to take a moderate to substantial temporary paycut between 25% and 50%. With thisinformation, Chanel and I agreed to get together early in the week and try torun numbers and pull two or three scenarios together. I would then presentthese to Jason and Scotch and work out which direction should be taken.

Parker was still on three days per week, but I asked him ifhe could possibly go back to his old employer. I explained that the next step, unless he is able to get his prospectivecustomer to pull the trigger, will be to lay him off.

Friday March 27, 2009 – Killing Sacred Cows – Home Office Rent

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Ed got a little hot under the collar over cutting the “HomeOffice Rent”. I explained that it was a“legacy perk” that was really only for those original staff, but not everybodyincluding Rod, Keith, Chanel, and me. Edlooked at this as a salary reduction for some people, but felt others had nothad their compensation reduced. Iunderstood his frustration and wanting everyone to share a little pain, but Ialso told him that the people that were not getting rent would like to havebeen topped off on salary to match this perk. In my book, a perk reduction isdifferent than a salary reduction, even though both have the effect of reducingtotal compensation. Ed went on to say that he thought the reduction should bean across the board reduction, not simply eliminating perks that affect somebut not everyone. I explained that Ichose to end this legacy perk with new hires because everyone was already wellpaid in my book. Now, we have cut backstaff and Chanel and I will most likely end up on the street very soon for thesimple fact that we are trying to SAVE THEIR JOBS and keep the Radiance brandmoving forward instead of selfishly trying to save ourselves. So understandthat we are not trying to take advantage, but simply trying to navigate thissituation sensibly.

Dewey Cheatham and Howe had an arbitration meeting with ourattorney. No surprise here, but they attempted some bogus counterclaim that wasdouble the amount we were claiming in our suit.

Chanel had been looking for private equity firms when shewas contacted by one of her undergrad classmates from Pace. He worked for a company named Swift Capital. His company was in Charleston and they were doing smallinvestment deals like ours, when you need a few hundred thousand dollars as abridge loan or small MBO. Chanelarranged to meet with him and his boss to discuss options on Radiance. Chanel met with Swift Capital in Charleston on Saturdayafternoon to discuss purchase or investment options with them.

Keith got a call from Sears Home Products and was told thatthe project we were awarded was just put back on hold. He was really aggravated - as were we all. Itold him don’t worry just keep working it. We were originally asked by their President to help them back inOctober, then the President got laid off when Sears combined divisions. Then, we reconnected with them at the CFOconference, and they put us in touch with another manager with purchasing ability. He was thrilled with the project we proposedand the potential improvements we were suggesting might be possible. Then he had to refocus his efforts on anotherproject that his boss wanted to do before the project we would do.

I scheduled one more internal Radiance meeting for Saturdayto go back through this week’s events, and talk about where we were now asindividuals and as a firm. I brought upthe private equity options to see what others thought. I also asked about a management buyout wherewe would all invest and take a piece of the firm. That option was a mixed bag because I didn’tknow how well some of the guys understood what ownership really meant.

Thursday March 26, 2009 – Smart Grid, Power Cowboys, & Dirty Martin’s

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Grady, Chanel, and I flew to Austin for the APPA conference last Sundayevening. The events with Primetime and others were occurring simultaneouswith attending conference presentations and managing our booth at theconference.

At the conference, we learned how utilities and largeutility contractors manage inventories and discussed with them ways to drivedollars out of inventory. Grady had allof his “cleansed” work scrolling by on the computer for passersby to see aswell as some of his drawings posted for people to view. All in all it was a good conference, althoughmost of the highest level decision makers were not in attendance. We did get tomeet a number of their staff that are responsible for warehouses and inventoryspending. We were also able to ask whomanages inventory, if it was a third party, which gave us another list ofpotential clients to promote our services. As a final part of this conference we got to learn something about SmartGrid, the big buzzword. What I couldplainly see was another revolution going on where information technology wasgoing to play a huge role in managing power networks as well as being furtherintegrated into appliances and distribution hardware. That meant even more jobs in IT and customersupport would be created out of Smart Grid in the long term.

Since Austinwas Sven’s old stomping ground, he twisted our arm and told us we had to go toa diner called Dirty Martin’s. So wewent there, had a bowls of chili and steak sandwiches. It was so good we decided to buy Sven a hatfrom Dirty Martin’s.

Wednesday March 25, 2009 – Ed Sells Project for DHL, DHL Cuts Ed Out!

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I spoke with Primetime about the proposal Scotch put infront of him earlier in the week. Primetime told me that it was a 50-50 chance of them agreeing to do thedeal under the terms or slightly modified terms. However, on Friday afternoon Primetime calledScotch and said that Transit was going to sit and wait on Radiance. If Radiance’sP&L was turned around, then they would be interested in buying.

Parker got feedback from the Vancouver project that we lost. The selected consultant was from Vancouver! SURPRISESURPRISE! BC Liquors told him our scoreon experience and overall proposal quality was the highest! Good to know. Thebiggest difference between us and the chosen consultant was the travel expenseand taxes that we would have to pay (which we never got a read from Revenue Canada tellingus exactly what we would need to pay). So, we were basically right on the money in terms of fees, but thetravel and taxes (taxes which might not have been necessary) were a majority ofthe difference. Unfortunately, we wouldhave liked to further discuss this with BC Liquors and we might have come upwith a creative way to deliver this project. I still believe there was pressureon BC Liquors to use a local firm- since this work was tied in with theOlympics.

Ed helped DHL sell a project (they showed up, Ed didthe presentation and suggested technical approach). DHL let Ed know that the client wanted tomove ahead and get the work done by the end of April. DHL and this firm had utilized Radiance’sservices many times before to tweak their supply chain as their businesschanged over the years. Unfortunately,after Ed sold this project for DHL, DHL decided to deliver it with theirinternal staff. Since there was noformal agreement with Radiance, and the contract with the client was to berecouped through DHL delivery services, DHL felt justified in cutting Radianceout. Basically, Ed had gone to greatlengths to help DHL sell the work, then the guys at DHL told Ed to get lost!!WOW. I told Ed that if he wanted to, wewould bring suit against DHL for this horrendously unethical behavior. Ed said no, stating that he would rather letthe work go this time and attempt to leave the relationship intact. I asked Ed what kind of relationship thatwas, his personal relationship, or the business to business one where we just gotSCREWED!

Tuesday March 24, 2009 – Establishing Explicit Decision Gates

2011-03-22T01:00:00.001-04:00

Jason asked me for some decision gates on Radiance to createa path. I sent him the following rundownin an email.

March 15th - eliminated "office rent" perk ofconsultants $3500/mo (holdover from prior regime)
March 20th - Layoff Lydia and William ($15k/mo savings)
March 20th - Reduced Monte to 3 days per week ($1500/mosavings)
March 23rd - reduced Parker to 3 days ($4k/mo)
March 23th - Scotch sends Transit revised proposal
March 28th - Transit answers yes or no
If yes, hold staff steady until meeting April 10th thenpossibly continue layoffs with some input from Transit
If no, hold staff until April 3rd to get through SupplyChain conference, then make next round of cuts based upon DECISION
DECISION
1. Make a full layoff and allow usage of OA brand forroyalty arrangement, or
2. "Hunker down" under Purple BU with Martin,Sven, Ed, and Keith, and/or
3. Pursue competitors and/or partners to acquire Radiance
We are simultaneously pursing deal ideas with Private equityfirms (2 interested parties)
We are working with our entire staff to evaluate othersavings options

Thanks

Paresh

Monday March 23, 2009 – Rerouting the Transit Deal

2011-03-21T01:00:00.001-04:00

Scotch started off the week attempting to revive the Transitdeal. In his and Jason’s mind, Transit’s biggest perk in purchasing Radiancewould be the close relationship they would retain with Purple. I didn’t buy their argument that therelationship angle was such a huge deal. Scotch sent me a draft of the list of points:

Paresh, this is what I would like to send Primetime, but needa couple of numbers filled in.

1. Letter of Intent by3/28 and closing by 4/30.

2. Purchase price of$500,000, with full indemnification by Purple of any liabilities not reflectedon the closing date balance sheet.

3. Purple to beresponsible for winding-up the existing office lease.

4. Claw-back of up to50% of the purchase price on a 1:1 basis to the extent that Radiance loses inexcess of $250,000 for the period 5/1/09-12/31/09 based on existing expenseload (i.e., no added expenses post-closing by way of Transit corporate charges,added staff, etc.).

5. Guaranteed post-closingrevenue of $XXX,XXX (NEED YOUR HELP HERE).

6. Projectedpost-closing proposal opportunities of $X,XXX,XXX (NEED YOUR HELP HERE ).

7. Projected ongoingsalary and payroll burden expense load of $XXX,XXX per month based on staff inplace at closing date.

Comment??

Scotch

Chanel sent Scotch a bare bones version of what we believedwould be the minimum staff that could retain a full accompaniment of skill setswithin Radiance. We literally looked atstripping the company and put Sven, Ed, Keith, and Martin on this list sayingthey would be the minimum staffing model that reasonably retains skill sets tooffer clients. That would reduce the salary burden to just over $50k per month,excluding fixed operating costs. Currently, we were running about $120,000 per month. Adding in the costs for business development,marketing, office space, technology, etc the budget umber went up to around$200,000 per month. Some of that budget couldbe reduced, but the fact remained that salaries were the major expense and thena significant portion of the remainder were fixed costs (as opposed to variableor extemporaneous costs).

Friday March 19, 2009 – The Radiance Group Hug

2011-03-11T01:00:00.000-05:00

I convened another meeting of staff to discussrecapitalization and restructuring options for Radiance. I asked the team to consider how muchseverance, salary, and personal savings they were willing to give up to buytime or buy the firm. I called this meeting “The Radiance GroupHug.”

Prior to our meeting I sent an email to Radiance’s seniorteam as the Options that have been put up for consideration:

We can present an option for a scaled down company, however Jason’sappetite to continue funding the red ink, as was reiterated rather stronglyTuesday, is gone. Purple's breakeven on the purchase of Radiance wentunderwater at the end of November. If we could cut expenses to the pointof being self sustaining...or nearly there, then that would buy time. Gettingto $100k per month is most likely not enough. But we need projects and someregular work. Keep in mind Purple's board has already pressed them foryears on why Purple owns a company they do not understand (Purple does notunderstand a consultancy). Jason has been informed of our pipeline(leads) and listened in on some of our sales calls since January, but we havenot landed anything substantial...so our leads list is now seen as unreliable.
At the moment we have nearly $0 backlog. Keep in mind thatwe do not have to pick any ONE option, that outcomes could be parts of any ofthese. There are other issues that will need to be worked out(technology, office space, etc), but the options below are the big picture.
Option 1:
Exchange severance with Purple for a roughly equivalentperiod to fund the company. Time period depends upon how much we can cut backand how much work we can bring in.
Benefit is keeping things together, literally buying time,and possibly finding another acquirer. Benefit to Purple is not paying severancesfor nothing.
Risks: Having no severance and having people completelydistracted looking for jobs instead of projects.
Option 2:
Hunker down with minimal staff working at Purple’s offices.
Benefit: Keeping Radiance brand alive to "fight anotherday" to be regrown and divested in better times. Possibly providing betteropportunity to have Purple and Radiance work together.
Risks: Who at Purple would be willing to add staff? Wouldhelp only a handful of Radiance staff. Most severances would be paid outanyway. This would be for a trial period of maybe 6 months.
Option 3:
Recapitalize with internal/external capital. Slimdown, produce a proforma, give everybody a piece of the action. Severances maybe paid out or may be partially used as downpayment on Radiance’s brand. Purplecould be paid a percentage of any profit for use of brand.
Benefit: Buys time to reach results and trims costs. Peoplecould get their severances. Radiance’s brand is given a chance and Purple mightsee some return instead of simply shuttering the Radiance brand.
Risks: Investors and deal makers take a piece of the actionand charge fees. No severance if this option fails. Keeping people aroundin a very precarious environment is tough.
Option 4:
Trim staff and present team, including those laid off, ifTransit is still interested in meeting on April 8th in Raleigh. This could be some combinationof shifting or sharing staff with Transit on an as needed basis.
Benefit: Potentially reduce or eliminate severance on somestaff. Could meet both objectives of keeping people employed, available, andkeep Radiance brand alive.
Risks: Waiting on Transit...could take a long time for themto make decisions on anything.
Option 5:
Contact all competitors to arrange visits and find out ifthey are needing staff or specific skills .
Benefit: Keeps Radiance brand alive and/or keeps peopleemployed.
Risks: Could affect ability to get work if competing withfirms on other projects as well as impact reputation.
Option 6:
Take severances, regroup under new banner. Rebuild everything from scratch and memory. Most likely it is verydifficult.
With the restructuring going on, we are still chasing downwork and promoting the business. No sense in throwing in the towel yet. It would only take a few leads to turn intoprojects and we’d be back in business. Chanel continues to get ready for both the American Public PowerAssociation meeting and the Supply Chain conference which happen back to backthe next couple of weeks. Grady hastaken on pre-marketing calling for APPA since he will be on point for thatone.
Even Ed got in on the “Radiance Group Hug” with his own inspiring emailcalling on everyone to be honest and pull together:

Guys,

I truly think that wemade the right moves this last year to position Radiance to develop businessagain after a long period of letting the well go dry. I absolutelybelieve that if the wheels had not come off the economy we would be the shiningstar in the portfolio again (remember the year Purple lost a couple million andwe had a 600K profit?) and not the goat. However none of that meansanything now does it?

The options underconsideration will all require a lot of teamwork and a lot of hardwork. We need to be able to trust each other to make that happen and weneed to be honest with each other to be able to build trust. Because thisis what I believe, I have copied everyone on my response to the options.

Wednesday, March 18, 2009 – Honestly Jason, We are NOT Sitting Around Waiting for the Axe to Fall

2011-03-10T01:00:00.001-05:00

We landed a 14 week engagement from the ConstructionProducts firm. It was sold cheaply, butit would at least cover salaries. Today we also found out that we lost the Vancouver project to a small, local, Vancouver firm.

Perhaps out of desperation to show that we were not sittingon our hands and to show off the fact that our people were still out beatingthe pavement, I forwarded an email from Rod to Jason and Simon:

Dear Paresh,

Corporation, the largest apparel company in the US,wants to meet with us to discuss how we can help them implement lean at theirglobal supply chain operations.

Their top two International Supply Chain executives:President Supply Chain Europe and Asia and Managing Director of Asia, will bein the USin April. We are schedule to meet with them on April 16^th at 11am atcorporate headquarters.

Understanding their business model, they are more focus ona total supply chain streamlining including sourcing, logistics, anddistribution as well as manufacturing operations in Eastern Europe.

Ed, I think you should come to the meeting with me givingthe global supply chain scope of the conversation and from there we can assesshow much they need to get into Lean Manufacturing and other process improvementinitiatives.

Please let me know your thoughts.

Rod

I’ve been in management long enough to notice that thequieter it gets from your superiors, the worse it is likely to be. Jason andSimon were eerily silent these days. Tocombat their silence, I turned up the frequency of the communications to showthat we are doing the right things, even if we have not gotten the results weneed. To stop communicating with themwould be to let them assume that I have given up and gone home….and continue tocollect a paycheck. Jason shot back that“a meeting does not make a direct line to revenues”, to which I replied “maybeit does not however it does show that our LEADS generation, which had alwaysbeen an issue for Radiance, was in good shape. The reason Radiance got intotrouble was that they had no clue what opportunities were out there and no ideahow to keep abreast of their customers needs. Most of their work was thrown over the transom at them, or was broughtin by Teflon. But selling had never beenan issue once a sufficient number of leads were identified.”

Tuesday March 17, 2009 – Jason! I Told You Desperation Is An Ugly Disease!

2011-03-09T01:00:00.003-05:00

I reiterated the core concepts without all the gory detailsto the senior Radiance staff. Inaddition, I brought Grady and Martin into the fold to discuss options on thefirm since it would take more investors to do a management buyout (MBO) or somecombination MBO and outside investment deal. I was not sure about Parker and how others perceived his value. I askedChanel and Ed about this versus laying him off.

I reached back out to Townes as well to get his input on arecapitalization of Radiance. I figured he might have some contacts or creativeways to keep Radiance afloat without decimating our staff and skill sets.

On Tuesday I had another call with Primetime. At this point,I was hoping that a final decision had not been made at Transit and thatTransit really just didn’t want Purple to push them into a purchase. Had this been the case, I could choose tostall or figure out how to get full control of Radiance just long enough toresell it to Transit. My thought reallywas that Purple was so desperate to get out of Radiance then why shouldn’t I beable to get it for nothing and resell it with only some carrying costs. ITOLD Jason that he should not scare off Transit with his desperate pleas. Here’s the email that I received fromPrimetime on the subject when I asked if he still wanted to meet our staff inApril and possibly work out an employee sharing arrangement to help with stafffluctuations:

Regarding the meetingI think it is premature at this stage until Purple determines what the fate of Radianceis. I spoke to Scotch yesterday and it sounded like he was going to get you alltogether to talk this through. When I spoke to Jason last Thursday he mentionedthat he would get back to me with his thoughts regarding this topic. I have notheard from him yet. Unless we see some backlog and the ability to stand on yourown two feet up upon a merger it will be a difficult to get an approval fromour COO. I am sure his attitude will be to sit and wait to see if you canturn it around yourselves then strike up the conversation. I’m sure you canappreciate this position. If you might be in the Raleigh area on the 9^th we stillplan on coming to conduct other business. I always leave the door up to youguys to discuss this further.

Did I predict this or what? I told Jason that he doesn’twant to seem desperate, lest Transit look for the firm to fail and then hirethe people at will. Transit has seen our leads lists and backlog, contracts,etc. However it was that damn call that Jason made to Primetime last week thatprecipitated their back-peddling on the $800,000 offer. I know that Purple views the firm as losingmoney every month, but they also know that this crazy economy - whereeverything is locked down - is not normal and that we will be profitable again– we can cut costs to the bone and give concessions in salary to minimize this,but the fact remains that the business can make money in the LONG run. Telling an acquirer that you are going toshut operations doesn’t make sense. Customer lists, firm knowledge, and project history has value. What we do not have is the luxury of time tofind a market for these pieces of the operation.

Monday March 16, 2009 – Heads Will Roll

2011-03-08T01:00:00.000-05:00

On Monday I buried my grandfather, then laid off the firstof two employees (Parker and William) and cut another’s hours down to threedays per week (Monte). I offered Lydia theoption to cut her hours to three days a week or take a layoff. She opted for a layoff since she needed thehours as she was the sole bread winner while her husband was going back toschool. I felt bad, but at least theretention agreements I instituted across the board gave her two months severance. I laid off William without an option forreduced hours and gave him six weeks of severance. Then I cut Monte’s days tothree days per week and didn’t give him an option for a layoff because I neededsomeone to handle the administrative work Lydia normally performed.

Monday evening I met with Jason for about half an hour andinformed him of the layoffs I made and that we would be following with morecuts. Unfortunately, he preferred totalk about Keith and how in the span of a month he had decided that Keith wouldnot fit with Purple’s existing BD staff. That was unfortunate because I wanted to “time share” Keith which includedsharing his salary. That would have beena savings of $8k per month alone. Iargued that he was a superior Leads generator to Purple’s existing staff but hehad to learn their business. Bysplitting time Purple could see how he does and decide within a few monthswhether or not he would work out. Jason’s emotional separation from Radiance was hardening and getting himto consider any reasonable compromises or restructurings to continue the brandwere losing his attention quickly. Jasonhad a board meeting in two weeks and he had to send out the prep materials atthe end of the week in order for his board to have some review time. I told him I had not given up on findinginvestors or devising another option and I would have more answers for him byApril 1^st. He said he wasflexible on finding an option but we had to make something happen soon.

Saturday March 14, 2009 – I Think I Broke Our BD Guy!

2011-03-07T01:00:00.001-05:00

The call on Saturday with Ed, Chanel, Rod, Sven, and Keithwas a difficult one. What was especiallyworrisome was that Keith took it really hard. I fully expected him to justleave, although based upon his reaction I think he was really conservative andwould make sure he had an offer in hand before he left Radiance. However he was not going to put up any moneyor take a reduction in salary to keep the operation going. I was more than a little aggravated that hewas ready to throw everybody under the bus to cut costs too. You never really know people’s characteruntil you put them into a severely stressful situation. I emailed Chanel: “I think I broke our BDguy!”

Based upon Ed’s suggestion on cost cutting, even though I knewit amounted to peanuts in the overall scheme of things, I cut one of the perkscalled “Home office rent”. I took theapproach of pulling off a band-aid and sent a direct, no excuses memorandum.

Due to the continued deterioration in theeconomy and the stress it has placed on Radiance’s financial position, we areput in the unfortunate position of having to suspend payments of home officerent immediately to those persons receiving it. This is an unfortunate resultof the situation we find ourselves in currently.

Feel free to contactme if you have any questions.

Paresh

Since our costs were mostly fixed and we were such a smallfirm, cost cutting that made much of a dent was going to have to come from salaries. This first shot of eliminating Home OfficeRent eliminated around $4k per month – a pittance in the monthly burn rate. Our burn rate was close to $200,000 permonth – of course laying off three people and reducing Monte’s hours broughtthat number down some. However, we needed something drastic. Chanel and I knew we would have to startcutting deeper and that meant more layoffs or reduced hours for more staff.

One of Parker’s proposals resulted in a call and theyasked if we could split our fee into phases so they could make lower levelapprovals on spending. Parker assuredthem we could and set a date for a kickoff meeting.

Friday March 13, 2009 – Black Friday

2011-03-05T01:00:00.001-05:00

On Friday the 13^th I got a voicemail – the callthat I had been fearing. It wasPrimetime. Transit lost two large projects this week that they thought were inthe bag. Due to the timing and loss,they were going to be scrambling for a few months to reorganize (layoff) andtry to get remaining staff busy on other projects. Therefore bringing on more staff fromRadiance was not possible. Transit waswilling to look at Radiance again in six months, but for the foreseeable futurethey were going to be scrambling to keep themselves afloat. Jason’s voicemail was right after Primetime’sand he was raising hell about being dragged through this process. I called Jason to calm him down and say thatRadiance’s team already had a meeting scheduled for Saturday to talk about theTransit acquisition, which wasn’t going to happen now. Instead, we would put our offer and plan onthe table to go forward. He said hewanted that plan immediately and I told him I would give an initial reportearly in the week based upon the conversation, then we could discuss detailslater.

In the Life Happens column, my grandfather on my father’sside died today. That’s two grandparentsin two weeks. So I worked in a trip toeastern Kentuckyfor early next week to be a pall bearer again. I figured I needed to see Jason face to face anyway and he was only afew hours away from my grandfather’s.

On the Dewey, Cheatham, and Howe front, I informed ourattorney that another option for DCH to settle the lawsuit would be for them topurchase Radiance. If they were interestedin that route, they would have to move before we got another Letter of Intentfrom an interested party. She asked if Iwas kidding. I told her not to make thisher opening remark, however, it should absolutely be part of the negotiation.

Parker had two proposals that he sent out this week. Unfortunately, they were very conceptual innature and I knew that nothing immediate would come of them. We needed a couple big things to come in thedoor immediately to give us breathing room.

Thursday March 12, 2009 – Letting Staff Know Transit Wants to Acquire Radiance

2011-03-04T01:00:00.001-05:00

Jason had a teleconference with Primetime on Wednesday. Isent Jason a primer on the key points I thought he should make ahead of thecall. In his recap of the conversation,Jason laid out three points to Transit about the acquisition of Radiance andkept it light and positive as Scotch and I had encouraged him to do. He indicated to Transit that Purple’s boardwanted a firm direction on Radiance by April 1^st , so he encouragedTransit to get to it.

Today I talked with our key people and mentioned thatRadiance was back on a path to being sold to Transit. I also indicated that weneeded to discuss other options because if that deal fell short or didn’thappen we would need to be capable of putting something on the table toPurple. Everybody was a little surprised that I hadbeen able to get Transit back to the table, although they could not say it theywere completely shocked by the prospect. I ensured them that I would not pull a Mukesh and scare Transit away. Mythought was that Transit’s business was our core business (consulting), whereasPurple’s was not, therefore we actually fit better with Transit’s culture andoperational style. Ed sent me a noteindicating that he had run the numbers on a proposal to Purple already and he wantedto talk to me privately due to the sensitive nature of his proposal. I assured him I would keep it private.

Wednesday, March 11, 2009 – CFO Rising Conference Day 3

2011-03-03T01:00:00.000-05:00

Peeringinto the CFO's Mind III - Final

Day two ended with tearing down the Radiance booth in theexhibit hall and going to dinner with the competition.

Day three began with a slow exit from bed and a change of clothes. I had wornour chosen uniform for the last two days and it was time for a change. By thetime I got showered and downstairs, my subjects were already being enthralledby another morning keynote speech from another academic. From the lineup ofpresentations, day three appeared to be addressing softer issues for CFO's such as decision making, humanresources, and how to talk to your board and bankers during these turbulenttimes.

The first presentation was by Sydney Finklestein,Professor of Business at Dartmouth's Tuck School.Again, it seemed like anyone with an MBA would have already had thispresentation of biases in decision making and understanding how no decision isever made with perfect information and that decisions, despite logic, are moreemotional than logical. So much for free and efficient market theory. Unfortunately, like most academicevaluations, a large portion of it seemed like Monday morning quarterbacking -hindsight is always 20/20. But he did recap why it is important to avoid makingpurely gut decisions - because you use shortcuts to decisions and the world ismuch more complex than that. Here's a recap of the major points from his newbook Think Again:
1. People base decisions on emotion - even those complex decisions by groupscome down to emotion
2. Redflag conditions are early warningsigns of suboptimal decisions including: your past experience base misleadsyou; self interest (conflicts); misreading situations due to pre-judgements; and having inappropriateattachments.
3. In order to safeguard to reduce vulnerability of biases in decision makingyou can: Avoid yes man trap by seeking out dissenters and engaging them;monitor decisions in real time and change the decision as the situationchanges; and ensure there is proper oversight and governance designed into thedecision process

While I was filling out the paperwork for the evaluation of the conference, Inoticed a particular name on the list. It was the CFO I had been looking forthe entire meeting. She appeared on a panel right after the Think Againpresentation. Her name is Eileen and she is the CFO for a rollup of roofing contractors called Tecta America. Once I saw this I thought, ok, she must be here somewhere. Keep in mindthat the auditorium seats over 300 people, but my keen eyesight and determinationto find her in the mass of people ensured that I spotted her quicker than anowl on a mouse. Just like the owl, I wasted no time in rushing over - businesscard in hand - to say hi, mention that I had done strategic planning with oneof their firms and got to know their CEO. She responded politely, said a fewwords, then took my card, and was whisked away onto the stage for her paneldiscussion. Missionaccomplished, sort of, although I really wanted a few minutes to talk with herabout how the firm was doing. She did mention that they were heavily into thegreen roofing movement and they were looking forward to the stimulus packageand federal green roofing projects. That's one of the few firms I have heardlooking forward to the stimulus package actually meaning anything.

Then it was off to the airport, not to head home but to head to New Orleans to meet witha utility company. Somebody has to be spending money in this economy and I willfind them.

Tuesday, March 10, 2009 – CFO Rising Conference Day 2

2011-03-02T01:00:00.004-05:00

Peeringinto the CFO's Mind - Part II

On day two of my observation, I got an earlier startto see what CFO rituals occur just after sunrise. I half expected to see Paganrituals to some God of Forecasting and Cashflowor even more exotic gods of Credit Default Swaps and Sovereign Fund MoneyRepatriation. I even expected to see some self flagellation for failing toforesee one of the biggest long tail events in a lifetime (CFO code for"low probability, high impact (catastrophic) event"). I wasdisappointed that I didn't see any sort of CFO rituals or voodoo. Instead, itwas more like watching the ant farm you had as a child - it was the same thingas the day before. There were long queues at the Starbucks coffee stations, some chose the coldwhite ceramic mugs, others chose the paper disposable cups. When it came tofood, they tended to migrate towards the pastries first and just look at thefruit. The way they passed over the fruit, I wondered if CFOs had some ultra olfactory senses warningthem that something was wrong with the fruit. I decided to test the fruitmyself. I eased over to the table, trying to look inconspicuous and tested thefruit by actually eating it. No psychedelic episode ensued, so I think thefruit was safe and it was simply a cultural fruit phobia issue.

Have you ever attended a casual event and everyone showed up wearing black tiebut you? Well dressing down for CFOsseems to mean French cuffs WITHOUT the monogram - or at least switch thediamond cufflinks out for the onyx ones.The dress code is business casual but derigueur is coat and tie formore than half of the attendees and ties for 90% -- dresses and suits for mostof the women. Perhaps CFOs don't ownanything that isn't Brooks Brothers, Jos.A Bank, or DKNY. That would actuallymean they have a better sense of designers than Joe Six Pack and perhaps abetter sartorial sense than most other professionals.

The first plenary session this morning was the CFO of Bank of America that Ihoped was going to impart some wisdom to the crowd. Perhaps he would paint arosy picture of the banking industry and tell us that credit would be flowinglike water through the Trevi fountain inRome. Instead,he READ a very scripted recap of how we got in this situation. He encouragedcompanies to take control and not feed the downward spiral (in other words stoplaying off people), and he touted the Merrill Lynch deal as adding strength tothe bank (even though BofA asked formore money to cover Merrill losses just last week - around $16 billion?).Overall, he lacked any foresight...or perhaps his legal department warned himof prognosticating in public? We don't know, but there was speculation.

I continued throughout the day in my quest to track down targeted attendees,staking out positions where I could get a good vantage point while maintainingsome camouflage (sink into the couch in the long hallway, peering around mypaper cup of coffee) as to not scare any CFO'saway. By now I was getting a handle on their patterns. They were in sessions,then out for coffee, then out on the patio for cell phone reception, then bythe bathroom and back into the sessions. They tended not to talk amongstthemselves much and didn't look directly at you unless they recognized youalready, but most could be approached if you were quick, made direct eyecontact, and smiled. You might have to run an occasional one down and blocktheir egress, but those were the exceptions.

I forgot to mention that Rod, one of our VPs,made an outstanding presentation yesterday. CFOsshowed up en mass to listen to him pitch "Turning Working Capital intoCash". Note that it had at least one of their hypothetical gods in thetitle (Cash), so in CFO terms we played on a religious angle to bring them into "worship". For those non-CFOs,the presentation involved driving out waste and thus costs using continuousimprovement techniques. Compared to a number of other presentations that I saw,Rafael's was relevant, direct, and tangible, while some others were eithersales pitches or very light on any tangible, actionable content.

Towards the end of the day, the salesman in CFO camouflage from yesterdaydragged even more people to the bar. Before drinks started flowing, the grouphad shared more insight on this economy with each other than any of thesessions. Good story telling really conveys a tremendous amount of information.We talked about businesses that were up (post grad education) businesses thatwere down (real estate), about conditions in LA, Phoenix,Vegas, Florida, Atlanta, The Carolinas,and Middle New Jersey. We hit upon issues that had not been discussed at theconference including the credit card debt buildup and home equity defaults thathave yet to hit (those are likely the next shoes to drop). In Florida, courts are supposedly backed up 15months on foreclosures and they have implemented a quick trial format. In LA,supposedly only 40% of the foreclosures have reached the market for resale,which means the pricing bottom is still a long way away...and they already havemore than a year's inventory in homes for sale.

Back to my targeting. As I am still tied to the construction industry throughmy interests and our parent company, some of my targets were from theconstruction industry. I was able to reach three out of five constructionindustry targets that I had set for myself. Unfortunately, a primary one that Isimply could not locate was one that I had done strategic planning for in thepast.

We closed out the night over dinner with a partner, marketer, and consultantfrom a Big 5 competitor of ours (Accenture). We compared notes about the showand people we met along the way, then spent a couple hours just chatting aboutfamilies, travel, sports,.and of course the elusive CFO.

Tomorrow I still have the morning for observation and perhaps I might find theCFO. I expect the CFO herd will be thinned out tomorrow as they return to theirnormal environments (the golf links outside) making it easier to single out oneor two that actually stay for workshops.

Monday, March 9, 2009 – CFO Rising Conference Day 1

2011-03-01T01:00:00.001-05:00

Peeringinto the CFO's mind

From a CEO's perspective, CFO's just aren't much fun. Theyput the brake on spending, they put the brake on a CEO's whim of theday/week/month, and they are usually contrarian. That said, they are aninteresting study for a CEO, who must work with the CFO constantly and dependsupon his CFO to keep him out of trouble.

To further my study of CFOs, I am attending the CFO Rising Conference in Orlando this week.Unfortunately, social settings and large gatherings are not the natural settingfor a CFO, therefore my study could be fatally flawed. Having received anadvanced attendee list, I targeted specific individuals and researched themusing Linked in, zoom info, and - of course - facebook.

On Monday morning, I observed my subjects (roughly 250 of them) milling about,drinking coffee, eating pastries, and mostly avoiding eye contact with thosethey did not instantly recognize. Then I sat through a presentation where aYale professor talked about the current economic crisis and laid out what hethought the plan should be. The audience lobbed a few softball questions hisway, then politely applauded and went back out for coffee. The points the Yaleprofessor made were:
> The average Joe has a limited financial vocabulary and the governmentshould subsidize financial planning for individuals.
>Business Schools should move away from teaching only "FreeMarket" theory, because there really are no free markets, nor are thereefficient markets. (otherwise every company in a free market would exactlybreak even, never earn a profit)
>There needs to be an improved risk market (futures, options) on such thingsas home equity, credit card debt, etc., to protect against drastic marketcorrections
>Individuals should be treated more like companies when their financialsituations change (in other words banks should freely renegotiate withindividuals on terms)

During the afternoon, I watched a passionate presentation on stochasticmodeling and a software tool named Crystal Ball. Basically, predicting thefuture of your business and thinking in probabilities instead of best, likely,and worst case scenarios.

Later, I tried another experiment. I wanted to know what would happen if Iintroduced myself, regardless of how quickly the CFO (he/she) tried to scurryaway. Surprisingly the person would stick around for a while...small talk beinga little difficult, but mostly cordial. As the afternoon wore on, I gotsidetracked by a salesman hiding in a CFO title. He convinced me that it wastime to have a beer and dragged me (kicking and screaming of course) to thebar, where we talked about the economy and how companies were coping.

The day ended with my head of business development talking me into havingdinner with the controller and a couple assistants of a large division of aFortune 100 company where we exchanged more political views than businessviews. But it was a good end to the day.

So much for Monday. The study and targeting of CFOs continues Tuesday.

Sunday March 8, 2009 – Off to Impress CFOs

2011-02-28T01:00:00.001-05:00

Sunday evening, Rod, Chanel, Keith, and I flew into Orlando and went to theCFO Conference Hotel. That was my mostexpensive cab ride ever at $140. Maybe Ishould have rented a car. Ed arrivedMonday morning and we all split up booth time with networking time while Rodpracticed his presentation. We made anumber of connections with the people we wanted to meet - both potentialclients and alliances – and even had dinner with a large competitor (Accenture). I felt this conference was an excellentbusiness development route because we had found a conference with potentialbuyers where most of our competition was not. Rod’s presentation was a big hit with a standing room only crowd in the50 seat room. He spent hours talkingwith people afterwards.

Feeling a bit cheeky after Rod’s presentation, Idecided to try my hand at blog posts onmy experiences at the CFO Conference. Iknew I wouldn’t keep up with the blog long, since it was topical, but I wantedto capture some of the things I was seeing and hearing around the hotel – thiswas the FIRST CFO conference after the big financial meltdown.

March 6, 2009 – The Message: Get a 10X Return on Our Fees

2011-02-01T01:00:00.002-05:00

Our sales meeting was lackluster this week with no newleads. I sent an email after the meetingstating that many of our leads appeared to have stalled and should be moved offthe HOT list. Once we did that, the list had only a few new leads during thelast couple weeks. In trying to keep momentum and morale up, I suggested that dueto the fact that we have a number of conferences over the next few weeks providingopportunities to network., we should focus on reaching the clients that would attendthese events and prioritize them.

I urged our staff to continue to promote this message to ourclients, “Spend money to save money, our clients get a 10x return on our fees.” I told them we still had a lot of fertileground to till for warm leads including Purple’s past clients and that theeffort to make continued follow up calls to past clients and past firms would havethe highest probability for success. Then I asked for other suggestions. I received a few emails some suggesting thatwe simply prepare for the conferences, reiterating my comments, and others thatwe should start pursing new markets – nothing novel, but I got the sense thatthey liked to have their voices heard. As a matter of policy, I did not support changing tack and spending theeffort on new markets unless the resources were available, and ours werenot. We needed to focus on our pastclients and warm leads.

Chanel reminded us that the CFO Conference was next week andinstructed us (her minions) that we had to wear all black suits, including blackshirt and tie on Monday at the conference – the first day. We wanted to be dramatically different inappearance from all the other consultants who would be wearing the standardwhite or blue shirts with a dark suit. Ifanyone asked why, we could make some joke about mourning the economy orsomething similar.

Chanel also unleashed our six foot tall Grumpy Old BoardMember display (Crusty), which tied into the print advertisement we placed inthe conference binder, and was mailed as a postcard to a preview list ofattendees. We also broke from the “Logo Rules” that Purple gave us and hadlapel pins produced with just our logo, which offset from the black quitestrongly. Like a Nike Swoosh, we wantedconference attendees to tie our logo, brand, and marketing campaign togethermentally. By doing all of this, we feltwe had unleashed an entire marketing and business development program on theCFO Conference – something unlike Purple had ever seen.

Rod was ready with a final version of his presentation forCFO called “Turning Working Capital into Cash” focused on a lean transformationat Hanes Brands, where they reduced working capital in the divisionsignificantly.

Coming up later in the month was the American Public PowerAssociation conference. Chanel and I figured this would tie in well to the workwe were doing for National Grid. We alsosigned up for a course they were offering called “Smart Grid 101.” Since we kept hearing about Smart Grideverywhere on the news, we figured we should learn more about smart grid andtry to figure out what business services we might be able to provide if any inthis area.

March 4, 2009 - Opening New Markets for Purple

2011-01-31T01:00:00.003-05:00

Let it snow, let it snow, let it snow. Snow in the South can be an interestingaffair. I began the week having to drivetwo hours with Sven to depart from an airport that was not snowed in - Charlotte. We were on our way to Shaw and were going torendevous with Purple’s team, Andy and Jon, in Houston. I hoped this would solidify some work for both Purple and Radiance, asmy discussions with Paul over the last few weeks revealed that he wasinterested in Purple’s fasttrack project and contracting methodology. Personally, it would be another joint winthat I brought to the table in the last two months providing opportunity forboth Purple and Radiance.

This is yet more proof that Purple’s business developmentteam had a built-in mechanism that was self serving for Purple (well, for HQ inIndy) and not at all looking out for the company as a whole (Radiance, othersubsidiaries, or even branch offices). A huge weak spot that I have pointed out numerous times over the lastfew years to Jason, but one in which they are unable or unwilling to correct.

The meeting with Shaw went well and there was discussionof both work for Radiance in improving their deployment process and for Purplein helping with project facilities. Itwas really interesting learning about the oil and gas industry and how theirwork was performed around the world. They told Purple that they would really liketo work on a Joint Venture with them and share some best practices. Based upon this outcome, I marked this downas a win for Purple that would not have happened had I not connected the dotsand spent the effort to bring it all together. The oil and gas industry was not even onPurple’s map, but the information about the industry and about the company thatShaw shared with us told me that Purple had just been introduced to a huge newpossible niche, in a growing industry. Now, would Purple follow up and stay on this, or drop the ball becausethey didn’t see how this all fits together?

February 28, 2009 – Life Happens

2011-01-17T01:20:00.001-05:00

For myself, friends, and colleagues, life was intertwinedindiscriminately with work. This week Ilost my last grandmother. My grandmother could have died fifteen years earlier,but she fought, changed medications, and learned to continually adjust to eachand every challenge that was thrown her way. I am glad I had the time shefought for.

I actually debated about sending flowers and not going tothe funeral in rural Eastern Kentucky. It wasinconvenient for me, it interrupted meetings that I had long scheduled, and itrequired me to adjust. Instead of doingsomething stupid like not going to the funeral, luckily I came to my senses, cuta meeting short in San Francisco, and flew to Kentucky to be a pallbearer. I had never been a pall bearerbefore, but it actually felt good to do one last thing for my grandmother andhelp put her in her final resting place. The funeral was a cold, windy, and snowy event, but it felt good to bearound family. In these instances, you realizethat life goes on and you have to make the most of the limited time you have –whatever that means to you. Perspective is good, and my grandmother’s deathmade me believe that as long as I was vertical and could fight to keep Radiancealive (which was keeping people’s livelihood alive), I would chose to continueto fight Purple to keep Radiance moving forward and with luck we would come outof this situation.

The DCH Situation Update

Our legal counsel got the Complaint completed onMukesh and sent it out the door. Wonderwhat will happen next?

February 25, 2009 – Transit Sets Staff Interview Dates

2011-01-13T01:00:00.002-05:00

The deal with Transit was picking up steam. Scotch informed me that Transit planned onhaving two people interview Radiance staff March 16^th. He alsoinformed me that cutbacks in staff were not going to be a deal breaker forTransit, although I questioned who he considered non-critical to Transit.

Understanding how everything is linked in a business isimportant. You have to understand how actions might affect staff, customers,etc. Here’s the email I sent to Scotchthat outlined my thoughts and potential consequences if we made drastic changes:

Sounds like it is time totalk with the employees and make sure they are going to support this. I need that injunction in place so that Ed, Sven,and Martin don't bolt for Dewey, Cheatham, and Howe. [I suspected that duringthe course of the last few months Teflon had recurring meetings with them,especially Ed with whom he has a close relationship] Ed and Sven are keys to Transit movingforward.

From Primetime's description,it sounds like Transit would want everyone except Chanel, Monte, and Lydia.

From a timing perspective onlayoffs, I need Chanel for this next month to get us through conferences. We have 4 conferences this month and we arespeaking and exhibiting at 3 of those. We could set a layoff date for Chanel ofApril 1. Keith doesn't have the mind for coordinating those activities and Idon't trust Monte or Lydiato get things done right [maybe technically right but Chanel knows what Iexpect]. I could probably cut Monte and Lydia's hours during this month andofficially lay them off after Transit does their interviews.

I'm still thinking thisthrough. How much does this save us inmoney, how much does it potentially harm us in other ways? What are the human costs we are dealing with?[I felt that I was always the humanitarian in trying to minimize layoff casualties.]

To make the situation worse, Jason was also beating the drumof desperation, wanting to cut staff, and showing that Purple was desperate tosell Radiance in this poor financial environment. Here’s the email I sent him trying to getthat voice of desperation calmed:

Ithink his [Primetime’s] boss might tell him to wait it out instead of payinganything for Radiance if we appear desperate....which would be a smart move ontheir part. Primetime even suggested that in an earlier call, so I havebeen careful not to plant a seed that this is a desperate situation, just astrategic move by Purple to sell an asset that Purple cannot leverageproperly. That's why I think it is best for us to not seem desperate. Lots of firms have divisions that were once profitable, go through a roughpatch, and return to profitability in the future. They probably think thatwould be the scenario with Radiance [and I do too]. Now by tipping ourhand in a panic, his boss would be best off strategically by watching us witherand keeping an eye out for our staff jumping ship. They know our staffand our phone number. Right now we have no NDA or LOI in place, so theyare free to use whatever information we give them.

February 24, 2009 – It’s the Economy Stupid!

2011-01-12T01:00:00.000-05:00

Rod told me our call with the pharmaceutical firm in Puerto Rico was put off again. They said the GeneralManager was not available. I suggestedhe ask his contact to assemble a small group of their staff and go ahead with apresentation. I thought it might givethe pharma firm a chance to push informal channels within the firm [based upona good understanding of what Radiance would be able to help with] instead ofwaiting purely on a couple key decision makers. Rod thought it was a good idea and worked to schedule it.

We held the call with the UKfirm including their operations in the UKand the US.My initial thought was that the call was a bust. However, any call like that is a bit exploratory,even though we all thought there was a potential project for a joint proposal.That’s just part of the lessons, if someone does not have a vision for howthese things can work then nobody can steer the group to the light.

One of our past clients, a drug company, had been trying to getus into a project at their Asian offshore subsidiary for months and today wefinally got a little movement. They sentus a confidentiality agreement to sign, which we turned aroundimmediately. Our contact said the Asian subsidiarywas trying to do a project on their own, but it was clearly way above theirheads technologically. Not that their staff were dumb, they just lacked theskills, experience, and full understanding of the corporation that our team had. I hoped this agreement meant we would getmoving quickly on their project and this wasn’t just part of a slow, formalprocurement process on their part. We had been chasing this lead for nearlyfour months now and it was an emotional rollercoaster week to week.

Grady was apparently psyched about going to the AmericanPublic Power Conference because over the weekend he pulled together a massive, automatedPowerpoint presentation. Sometimes it was difficult to turn the volume downwhen we got people on a roll, and Grady seemed to be enjoying his new outlet workingwith the marketing team. Nothing beatspassion for getting great work products from people and I hoped this passionwould make Grady very effective at promoting our services at the conferencenext month.

February 21, 2009 – Doing Proper Conference Pre-Marketing for CFO Rising

2011-01-11T01:00:00.000-05:00

In preparation for the CFO Conference, we were busyorganizing everything. We had ourpre-marketing postcard mailer done, we had our blast email going to the CFOsand contacts at our key clients, we had looked at the attendee list andtargeted who we would like make an introduction of the company to, and Iassigned people specific exhibitors that they were to talk to about crossmarketing, strategic alliances, workload, or just general information gatheringon their operations. The more we didthese shows the better I liked them. Keith also scored a good one with one ofour multi-billion dollar potential clients, Sears Home,agreeing to have dinner with us at the conference. Rod’s presentation was getting close to afinal polish and we were ready to go. Rod got a great slot for his presentation that was mid-morning on thefirst day of the conference when attendees were eager to go to meetings. Italso provided him a nice couple of days to chat-up people that saw hispresentation. I felt really good aboutthis conference and the exposure it would provide.

February 20, 2009 – New Marketing Slants on Old Service Lines

2011-01-10T01:00:00.000-05:00

One of our many niche services was called Slotting. Internally I liked to get the engineering staff’sreactions asking them if they were “Slotting around”again this week.Iwondered if I lined up work for themdid that make me their pimp, and if they got paid for slotting around did wehave to report income to the IRS. Ok –so I’m mixing a bit of engineering humor with tax evasion humor. I would try anything to get some of theseguys to look up from their spreadsheets. For the slotting service, Grady actually did some work with marketingand created a masterful piece on the advantages, direct and indirect benefits,and low comparative cost of performing this work. Bringing the technologists and the marketersinto symphony was one of my favorite hands on tasks. I think having them work together on taskslike marketing pieces was also a great way to provide cross-training and newperspectives on the work. Marketinggains an appreciation for the intricacies and the technologists gain anappreciation for developing a message that was clear and understandable tobusiness people. Chanel then sang Grady’spraises on a mass email. That was oneway to make people feel recognized and help establish the expectations amongthe other staff.

With the US Stimulus package paying a lot of attention inSmart Grid and Energy technologies, I asked Chanel to find a conference for usto educate ourselves about this market. Within two days she signed us up and made Radiance a member of theAmerican Public Power Association, complete with a conference registration andbooth for late March. She then went backto Grady, who had been working with National Grid and Indianapolis Power andLight, and asked him to create another amazing marketing piece. I asked Gradyto be prepared for show and tell and to take as much of his work for thesecompanies and sanitize it so we could show it publicly.

February 19, 2009 – Setting Strategy with the New Attorneys

2011-01-07T01:00:00.000-05:00

On the Dewey Cheatham and Howe (DCH) front, I was asked byour new counsel to dig back through my records and assemble an accounting ofdirect costs from DCH’s hiring of our staff. I focused on the interviewing andhiring costs of the staff we brought in, then added it to other costs such aslost opportunity based upon the sales the lost staff brought in averaged overthe past few years and the revenue they generated consulting. Added alltogether it was a nice tidy sum over $500,000 in direct costs. Then we started piling on the additionalcosts such as distraction, loss of customer faith, etc., that could be a side effector indirect impact on the business. Wedecided to put together suits against Charlie, Mukesh, and DCHindependently. We figured this broadapproach would allow us to leverage whatever angle we needed to get them backto the table. Remember the “Fuck you”letter we got from their counsel in December? Well, DCH had been mostly silentsince then – I am sure betting that Purple’s non litigious nature would kick inand the lawsuit would go away. However,Purple wasn’t driving this, I was and I did not share that non-litigious naturewhen it was clear Purple was being run over..

February 18, 2009 – Marketing help from Outside

2011-01-06T01:00:00.000-05:00

Townes responded to my questions about his network, which hebragged about, suggesting that he could open his rolodex, send a mass emailwith his praises of Radiance’s work, and get us in touch with a huge number ofsenior executives. He told a story abouta friend of his at a small consulting firm that Townes claimed was flush withwork and could use some assistance. Heput Chanel on course to develop an email marketing piece and setup a couple ofphone calls for her. Chanel and I thought that this was pretty cool, having aPrivate Equity guy like this with a deep rolodex offer to help makeintroductions. But I had big questionsabout this. Why didn’t he help Radiancein the past – he had a much closer relationship to Mukesh than to me or Chanel. Some of these questions we had to askbecause we were trying to figure out his motives, but in reality if his input increased our sales pipeline for themoment then we would deal with those questions later.

Chanel and I had been reaching out to our Duke Network formonths now getting an idea for how others’ firms were getting along in thisnasty financial crisis. One guy weconnected with was out of the UK,and he called us this week asking to setup a call. We were excited, because he indicated they hadan opportunity that crossed over from Europe to the US and thought that we could worktogether on it.

Continuing on the follow up with Marshall-Teichert, Ed senthis timeline of events to Rick and reiterated that he was still willing to helpthem in any manner, whether it was continuing with this project or shiftinginto a new project.

February 17, 2009 – Bringing Ed into the KNOW

2011-01-05T01:00:00.000-05:00

Chanel and I decided it was time to bring Ed into “the know”on the company status with Purple as well as Transit and Townes. Ed was not surprised by the fact that Purplewas getting nervous, although he was a little shocked to know that Purple’sboard had actually told us to divest Radiance. We explained to him the whole emotional rollercoaster that Jason was onand that Radiance was just one piece of that whole ride. We told him that we had been working for twomonths now to find a strategic buyer or a couple of investors that would keep Radiancegoing. We did NOT tell him that Transithad already made an offer, but we did say that Primetime was interested intalking with our staff again. Wereassured him that this time (unlike a year ago when Mukesh squashed the deal)we would make sure the deal went through as Radiance was a much betterstrategic fit with Transit than with Purple – meaning that with Transit Radiancewould be part of their primary business, not a side effort like with Purple. Primetime’s CEO asked for our currentcontracts, backlog, pipeline, and current staff agreements – which we asked forEd’s help in assembling.

Even though Jason and Simon were elated at the prospect ofTransit’s acquisition of Radiance, I knew these deals can blowup in an instantover nothing. Jason said I still need toprune back on staff and his overtures to Scotch seemed rather desperate. One thing I know about appearing desperate isthat desperation is the surest way to get screwed in a business deal. I thought it odd that I recognized this factand they did not. I sent an email toJason asking him to cool off a bit and back away from the desperation play andlet this evolve. My concern was that Transit could easily cherry pick staff,much like Dewey, Cheatham, and Howe did, while giving nothing to Purple forRadiance. Here’s my email:

Jason, I think his[Primetime’s] boss might tell him to wait it out instead of paying anything forRadiance....which would be a smart move on their part. Primetime evensuggested that in an earlier call, so I have been careful not to plant a seedthat this is a desperate situation, just a strategic move by Purple to sell anasset that Purple cannot leverage properly. That's why I thinkit is best for us to not seem desperate. Lots of firms have divisionsthat were once profitable, go through a rough patch, and return toprofitability in the future. They probably think, and I totally believe, thatwould be the scenario with Radiance. Now by tipping our hand in a panic,his boss would be best off strategically by watching us wither and keeping aneye out for our staff. They know our staff and our number. Rightnow we have no NDA or LOI in place, so they are free to use whateverinformation we give them.

February 16, 2009 – Meeting with Bredero Shaw for Cross-selling with Purple

2011-01-04T01:00:00.003-05:00

I scored again for Purple, perhaps more than for Radiance. Whilemaking calls to past clients last month I came across PK at Bredero Shaw. He wanted to know about our services andPurple’s capabilities. My reconnectionwith PK at Shaw and subsequent conversations led us to visit PK in Houston. I arranged to take Andy and he could bringJon along as his right hand man. Shaw was interested in the new process thatPurple has been promoting for cutting project build times. Purple promoted it as a Lean concept –similar to the Toyota Production System – but I knew that it was just the wayPurple has always worked with some minor automation added. I workedwith Andy’s assistant to get the dates and the travel information nailed down.

Because I could envision the crossover points betweenPurple’s project delivery process and Radiance’s harder edged consulting serviceofferings, I literally saw how our service offerings could be combined andpromoted. This meeting could set thestage for more meetings with old and new clients for both Purple and Radiance topromote a very well crafted service. It wassomewhat odd to me that so many people get caught up in their narrow day to dayfocus that these larger, greater ideas never come percolating out of them. I suppose that’s the difference betweenexecutive thinking and worker thinking. Thisservice was so crystal clear to me – but selling the idea internally at Purple andproving its value through sales and satisfied customers would take longer thanI had at Radiance, not to mention that Purple was not interested in keepingRadiance. That was crystal clear to me. Unless Transit completed the deal and bought Radiance this new idea onservices would evaporate into the ether.

I have an example to clarify how little our parent firmPurple understands our work. One of ourdirect competitors called Simon and was promoting how their services could helpPurple. Simon gave the guy my name and emailand said to talk with me about their services. This guy (who was obviously just a telemarketer for their firm) calledme enthusiastically telling me about their services and how they can help us. Iasked him to send me their information and I would look it over (actually Ipassed it around the office to get impressions and to compare our marketingcollateral and messages to theirs). But the point was that I could not believethat Simon did not even know this was a direct competitor. Perhaps Simon just wanted to get off thephone and passed the guy on to me. His actionreinforced my belief that Purple did not understand our work and had littleinterest in learning over the last six years.

February 13, 2009 – Transit Makes An Offer

2011-01-03T01:00:00.004-05:00

Primetime contacted Simon with an interesting comment. Although Chanel and I told Primetime that wedid not see ourselves continuing with Radiance after an acquisition by Transit,Primetime wanted to be reassured that I would stay. He was not so keen on Chanel, which in myopinion was a reflection on his industrial and engineering background [engineerstend to undervalue marketing because they do not understand how to leverage iteffectively]. I assured Simon that Iwould stay although it could be a bit like a two headed dragon. My assumptionwas that Transit would use my close ties to Purple to keep the connection strong. Simon also said that Transit was going tomake an offer- which made Jason happy - so we were patiently waiting.

On Friday the offer from Transit finally came. I got a phone call from Scotch who said itwas not a wonderful offer but at least it was better than zero. $800 thousand! Scotch was worried this was a low startingpoint that would be eroded during the due diligence period. I told him thatPrimetime told me point blank that they come up with a number that is theirlowpoint to parade with the potential target with an assumption that their TRUEnumber would likely be reduced close to the lowpoint. Otherwise, they couldspend a lot of time in due diligence, significantly reduce the offer, then havethe final number rejected. Based uponthat knowledge, and assuming that Primetime was not playing games with me, Ithought this was a solid offer.

My email to Chanel was simple and needed no subject orexplanation:

800k

That meant that Chanel and I would not make much out of thisdeal (15%), but then what should we expect from a year long exercise in mayhemand herding cats? We figured that thiswas about as good as it gets in the midst of the worst financial crisis sincethe Great Depression. Everybody wasstruggling and we were happy just to get an offer that would buy a nice car,but not a nice house. We knew ourfortunes were elsewhere but we had to play this game out with Transit,Radiance, and Purple. There was a hugesense of relief in that we actually got Purple to an exit with Radiance quicklyand felt that we had improved Radiance’s operation dramatically.

February 11, 2009 – Devising Internal Staff Layoff Lists

2010-12-31T01:00:00.000-05:00

Dividing up the staff at Radiance into critical andnon-critical was absolutely no fun. Isent Jason an email asking about Keith, which had very good business developmentskills and should we start paring down staff, I recommended that Purple find aplace for him there. As for the otherstaff, particularly those that were not yet engaged in projects, Jason wasencouraging me lay them off or significantly cut their hours. I told him that Iwas worried about Transit and not knowing what or how they figured they couldutilize the firm, I didn’t want to start hacking it up and destroying any valuethey anticipated.

Following up on everyone’s goals, one area I could point tothat all the consultants were falling behind on were the publishing goals. I called a meeting with Monte and Chanel toask what organizations and/or publications they had made inroads into for our consultantsto use. Then I started contacting each consultant to ask about progress on theirpublishing goals, especially if they were not 100% billable. If they were notfully billable, then I expected them to be researching and writing some seriousarticles. The atmosphere that I createdin accountability was so different than the laissez-faire atmosphere of theprior administration, I think everyone was more than a little surprised that I actuallyexpected them to publish and make presentation per their yearly goals.

February 10, 2009 – Rebuilding Broken Relationships Within Purple

2010-12-30T01:00:00.000-05:00

Oh joy, the monthly Monday Purple Subsidiary meetings areback. The meetings would not have been sobad if they had been structured better and facilitated properly – with nobodyabusing the floor. But alas, I got tosit for two and a half hours on a phone call in a room by myself, respond tothe occasional interesting point, and wait for my five minutes of fame – at theend of the call no less. So I prayed foran emergency, massive quantities of email, or a proposal – something that I couldwork on while I half listened to the drone of Bob on the call.

We had an exciting breakthrough with Purple this week. The Japanese business unit, whom we had aterrible relationship with due Teflon, actually wanted to know about ourexperience in helping firms determine which facilities to close and how toshift operations around to consolidate them.

Of course this was done in a very roundabout way through anon Japanese business unit person, however it was definitely progress. This wasthe direct result of our brining Purple into the Indianapolis project that Ed, Sven, and I wonlast month and I introduced a new Purple person into the Radiance mix. These werethe kinds of business opportunities where neither firm could effectivelycapture all the revenue or opportunities alone. But join our forces and we hadend to end visibility into strategic plans of firms and were there to work withthem. With this project being more strategic in nature, it would garner higherfees, which is a primary objective of Radiance’s [fewer projects, higherprofile, higher fees].

February 9, 2009 – Can’t Give a Vacation Away to Customers

2010-12-29T01:00:00.000-05:00

Over the weekend we emailed back and forth about the freepasses we had for the CFO Conference in Orlando,in mid-March. We thought this would begreat to provide to some of our customers, even provide travel expenses forfive or so really good clients. I thought this set a perfect example of thecustomer relationship development; that closeness in developing true customerrelationships that I kept harping on about. We created a list of twenty customers to ask thinking that surely fiveof them would love the opportunity to attend a conference of CFOs that weretalking about the financial crisis…in Orlando…inMarch!

Rod began to show nervousness about the presentation he wasto make at the CFO Conference. He was soorganized and knowledgeable in everything he did, but was not quite ready to goout into the world of public speaking. He had given the presentation to our staff twice already and continuedto modify it. I was certain he would doa good job and after he got a few of these presentations under his belt he wouldbe a conference presentation hound like I was.

Rick of RPG [the firm that blamed Radiance for the state ofthe optimization project when their project manager died and left the projectin disarray] responded to my letter, quite professionally. He said:

“We have read the attachment [the letter] and we will reviewit further. Perhaps out of all of this we can all learn some lessons that willmake each of our respective companies more effective in serving our futureclients, together.”

So at least I felt good that I had defended Ed and Radianceagainst a serious misunderstanding that arose from a tragedy and theineffectiveness of a new project manager’s ability to communicate. Many new project managers feel the need tojustify their worth. Even with thisresponse, I realized we were still going to be the scapegoat on this projectwhich sucked.

February 7, 2009 – Pursuing Other Divestiture Avenues

2010-12-28T01:00:00.001-05:00

Even though Chanel and I had a good meeting with Primetimeon Monday, we were not about to put all our eggs in one basket. We felt weneeded other options in case Transit backed out.

Chanel spent the week talking back and forth with a businessbroker to see if he could help promote Radiance quietly to potentialacquirers. She also started aconversation with a friend of hers that was working for a small private equitygroup which resulted in a meeting scheduled for later in the month. We were thinking that we had to chase downmultiple options and hopefully something would work out.

Townes was back in the picture this week. He liked to talk,that’s for sure. He also liked to brag,which I was not sure if that was a pre-requisite for being a private equityinvestor or not, but bragging comes through in everything he does. I relayedthe Transit option we were pursuing and suggested that he hold tight for acouple weeks when I would contact him again about the acquisitionpossibility.

February 6, 2009 – Death of a Customer

2010-12-27T01:00:00.000-05:00

Remember back in December when one of our client contacts atan on-going project died suddenly? Wellthe project was back and it had a major problem. Here’s Ed’s email to me:

I want to make you aware ofthe situation with RPG. I was on a call this morning with RPG people because ADDAXis threatening to pull the project and ask for damages. Apparently Roger (the dead PM) was planningon using the tool to do some things that their business rules will not allow.If their accounting rules are followed the restriction makes rerouting almostworthless. I know that Roger hadconversations with me that these would not be valid restrictions. However since his death the new guy whoreplaced him is saying that these restrictions can not be overcome and theproject will not show any value.

Apparently he has also told ADDAXthat and hence the crisis.

My position is that we havedone everything and more that they asked us to and if RPG mismanaged theproject then that is their problem. Ihave offered in good faith to assist them any way possible to work through thisand save the project at no additional cost as long as they promise to coverexpenses.

There is a real good chancehowever that ADDAX will pull the plug and RPG will refuse to pay outstandinginvoices

Life was better when oil was$150 per barrel.

I asked Ed to schedule a phone call with the manager so Icould talk with him and see if I could smooth things over and do something tosalvage the project and the relationship. Late Friday Ed and I finally got to talk with an RPG executive about theproject. I use this as a lesson incustomer management…except it was our customer that needed to manage theircustomer – instead all they had done was inflame the situation instead oflooking for a solution. Then they blamed Radiance, and we were not even consultedat any point in the process. Here’s theletter I sent to RPG’s executive after the phone call:

Dear Rick,

It is unfortunate that RPGand ADDAX have gotten into adisagreement over the maintenance truck routing project. However, what is very troubling to me isthat nobody at RPG consulted Ed - the one technical professional that has beenworking with the data and software – prior to raising the issues with thecustomer. Ed could have informed Martinof how the software was being used, how allowances were being built into themodel, and perhaps together they could have carried the project forward to Roger’svision.

From my perspective, Icannot comprehend why RPG’s project manager would not consult his leadtechnical person to find a solution/resolution to a project issue. Why would that happen? It does not make sense.

Roger’s untimely andunfortunate death occurred more than a month ago, and during the interveningweeks Ed was not consulted once by the RPG project team. Radiance assumed RPG was taking the time toregroup and we fully expected that the project would pick up where it leftoff. Ed even offered assistance toSophia (without charge) to help RPG recover lost continuity. The events of the last week completelyblindsided Ed. He is genuinely upsetthat RPG is questioning his integrity as a professional.

Now that RPG and ADDAX haveworked out an arrangement and decided to cancel the Truckstops part of thisproject, Radiance will send a final invoice. We will not be billing for the additional week that Ed worked on theproject cleaning up data.

I have asked Ed to provide amore detailed timeline of events so that you may review them and understand –at least from our perspective – how the project evolved. What you will not be able to discern from ourperspective are the expectations that were set with ADDAX, as Radiance was keptat arms length.

Ed and I are open tocontinue to answer any questions you may have. We are also still open to help RPG find a solution/resolution with Addax.

Thank you.

Best Regards,

Paresh

I tried contacting Rick several times over the next fewweeks to talk about the situation again. He did not respond at all. Eitherhe realized that his team completely screwed this one up and was embarrassed,or as I suspect, he preferred to stay pissed off at Radiance and holds on tothat thought in order to justify their scapegoating of Radiance.

When I see executives like this that cannot stay true andethical with people they do business with, I just shake my head and think –what a spineless, gutless wussy!!

February 5, 2009 – Conquering the Great White North, Wisconsin

2010-12-24T01:00:00.001-05:00

The Wisconsin trip had startedoff innocently enough. Keith introduced me to one of his long time connectionsat a large porcelain manufacturer, Kohler. In the meeting this guy talked about accounting anomalies driving funnymanagerial decisions because they were not using ABC costing, but informationfrom an old MRP system. They know these anomalies are there, but his take on itwas that the decisions had to look like the right decisions whether or not theyactually were. I told him Rod had thesame issue at some of his plants and I could connect the two of them. So Rod might be able to provide some helpwith solving or creating a secondary dashboard for decision making. He was appreciative and Keith and I leftthinking that we would be able to get at least a small project and a ton ofgoodwill from this guy.

Our meeting with the Construction Products firm, JohnsonControls, was canceled early the next morning due to sickness of the guy wewere supposed to meet. Talk about all the bad luck.. Keith and I knew that we were not walking outof their office without some kind of deal – we had all the decision makersthere – and we were just crushed that sickness was going to keep us out.

As for good luck, Keith called another past client of his inMilwaukee thattold us to come have lunch with him. This guy had a need, but had to sell it to his customer, since we wouldbe subcontracted for this work. Overlunch Keith and this guy talked for two and a half hours, catching up on thewives, kids, boating trips….all the stuff that I think a good BD guy should beable to talk about. This was my firstreal chance to see how Keith operated with his contact base and I was proud tohave him at Radiance. If we had threemore like Keith we could certainly blow the doors off Radiance and grow thisfirm to have hundreds of staff instead of tens.

February 4, 2009 – Difficulty of Pricing Work with Newbies

2010-12-23T01:00:00.000-05:00

On the Vancouverproposal we had a bunch of newbies working on it. Inevitably, there were anumber of different approaches and they were clashing. Parker kept wanting to pull in outsideconsultants he knew. I kept bringing him back to utilizing our consultantsfirst and only if we lacked expertise in an area did we carve out a smalloutsourced portion. I told them Chanelwould provide them with our standards for the proposal, since this was thefirst big proposal we had since we aligned our marketing and style withPurple. I asked the team to focus onhighlighting our differentiators, to use an effective attention grabbing twopage executive summary (since all these engineers want to kill the reader withdetail from the get go), cap travel expenses since we were so far away, andshow how each and every step we proposed helped solve their major painpoints.

Then we argued over money! Should it be CAD$, US$ - which Isaid was obvious, the customer was in Vancouverand we would price in CAD$ and take the risk on the exchange rate. I wantedunrelenting focus on value and our typical customer’s return on our fees (the10x part). The initial fees came backwith a 50% variation in what everyone thought it would cost to do the work. So I challenged, prodded, argued, and focusedeveryone on getting a proposal that met basic requirements, left room toupsell, and converted it all into CAD$.

Chanel’s work on this presentation was brilliant! It was themost professional looking proposal that I had seen in years and would haveeasily bested some of the top management consulting or investment bankingfirms. In fact, it might have looked“too rich” for BC Liquors.

February 3, 2009 – Provocative Marketing for CFO Rising

2010-12-22T01:00:00.001-05:00

What can you do when all your potential clients are in astate of panic? We got provocative. This week Chanel and I came up with what wethought was a funny, cheeky, and provocative postcard mailer to use aspre-marketing for our CFO Rising conference trip in early March. It came out of a frustration with thepressure we were getting from our board and Purple’s board to show improvement– which I was certain was minor compared to what staff was getting ourcustomers’ firms and firms focused on consumer goods.

After some tweaking, we came up with a slogan “Don’t fearyour next Board of Directors meeting. You have tough Directors…we have toughconsultants.” Then included our latest marketing showing that a “typical clientwill get a 10X return on our fees.” Which we had verified from past analysis onexpected savings. To top off thismarketing, we found a picture of what looked like a grumpy old man, similar toWalter Mathau in grumpy old men. We put him on the postcard and on a six foottall popup to put beside our booth.

Jason and I had an email exchange about the energy marketand potential work that might come out of the Obama administration’s stimulus plan. I told Jason that we started pursuing thismarket last year with some targeted marketing, self education on the players,and how the market works. Radiance alreadyhad some experience in this market with National Grid and was performing workfor them currently, although just basic work on their yards and inventory. Our past work was improving call centerlocation and response time. Jasonencouraged us to push further in this market and to provide whateverinformation we could to Purple’s business development staff to help get them upto speed.

February 2-1/2, 2009 – Positive Divestiture News to Jason

2010-12-21T01:00:00.001-05:00

Chanel and I went from Transit’s office to the airport, sheflew to Raleigh and I flew to Milwaukee to meet up with Keith. I sent Purple the following email based uponthe Transit meeting:

Chanel and I had a three hourconversation with Primetime in Minneapolis. First and foremost, interest is definitelythere in moving forward.

Important points:

1. Primetime might have some egg onhis face from the blow-up of the deal back a year ago. For this reason, he will most likely wantsome assurances that the deal will go through and that the Radiance staff areagreeable to it.

2. Primetime is busy pursuing acquisitions among other things. We need a strategy that would help make thisacquisition move easily and rapidly. Simoncould probably help move things along here with some reassuring phoneconversations. We would be the smallest acquisition in the pipeline, thereforewe would want to be the least cumbersome and most responsive.

3. Primetime is interested in our entire group. He is looking for consultants with broadgeneralist experience to work side by side with his acquisitions which arealmost all specialist niche firms. His primary interest in us is our broadexperience, access to Purple, the automotive sector, and Asia.

4. We verified that Transit as amatter of strategy does not do JVs or alliances, just straight acquisitions. Heexpects to do $160 million in acquisitions over next 3-5 years.

5. In their acquisition process, Primetimedoes initial vetting and Brian (CEO) gives an initial range, then Brian takesover negotiation of money while Primetime handles due diligence.

Radiance/Purple Decisions:

1. Compare the cost of layoffs vs.destruction of value to Transit (value is in consultants).

2. How long can/should we wait onTransit to make a substantial move such as Letter of Intent).

3. Is there a corresponding vehicle(memorandum of understanding) that Purple could issue/sign in conjunction withTransit that says Purple will accept a valuation between $Xm and $Ym for radiance,with potential due diligence adjustments as long as an LOI is received by XXdate with a target date of XX for closing?

Thanks

Paresh

February 2, 2009 – Road to Divestiture with Primetime

2010-12-20T01:00:00.001-05:00

Chanel and I started off the week with what was supposed tobe a one hour meeting. It stretched to a three hour discussion with Primetimeabout Radiance and Purple. We coveredall the bases with him including the defections, the leads pipeline, thebillable projects underway, and the one thing he focused on….whether or notPurple and Radiance had figured out how to synergize – a word I hate –synergize and increase their fortunes by working together. I stressed that this was exactly my focus becauseI was well connected to Purple, understood Radiance’s business model, and couldeasily see where cross-selling and leads generation efficiency could beexponentially increased. We left thismeeting with Primetime eager to get down to business and do another duediligence look at Radiance. He wasconfident that they would make an offer!!! The only problem with timing was that they had another acquisition thatwas in process ahead of us. I sent a follow-up email to Primetime the followingday to make sure that my summary and understanding of the situation were thesame as his:

Dear Primetime,

thanks for spending your morningtalking with Chanel and me. With so manytopics we discussed, I wanted to reiterate a few points that I felt were keypoints.

1. Chanel and I were assuming thatwe would not be part of a transaction since we would be redundant at manyfirms. However, with your aggressive acquisition needs, our background inmanagement consulting, and our knowledge of the engineering and constructionindustry, I am certain we could prove useful in both a transition and/orbusiness consulting role to Transit.

2. Radiance is still an interestingacquisition since you have a range of niche players and really need the broadand seasoned generalists like our staff.

3. You have a continuing interest ingetting into the automotive market through both Radiance and Purpleconnections.

4. You have an interest in expandingyour work in Asia, which Purple has significantinroads into.

5. We have hired particular radiancestaff to be very one track focused, such as Keith on business development, Chanelon marketing, etc. because we prefer to deal with experts in their fieldinstead of trying to make it work with jacks-of-all-tradeswearing multiple hats. We've seen toomany companies with an ad-hoc do-it-yourself mentality that are extremelyineffective.

6. My connection to Purple is notonly at Jason's level, but I am tied in throughout the organization at the PM,Market Manager, and Administrative level. Radiance's inability and Purple'sinability to leverage one another's strengths was a failure to make someoneaccountable for ensuring that it happens, not to mention they did notunderstand the other's culture and business models. This is another area where Transit could havea very strong tie to Purple...through me.

7. Purple is interested in hearingfrom you whether or not there is interest from the Transit side in moving thisforward (yes, I recall your workload and will push on Gray to make this smalldeal as effortless on your part as possible)

thanks

Paresh

February 1, 2009 - Barnstorming Business Development

2010-12-17T01:00:00.001-05:00

The Amazon meeting went exceptionally well. We met with their team (group of MIT PhDgrads) who were exceptionally smart but not long in experience. We put Ed on the phone who could talk on parwith them and even direct them into areas where they would have spent monthstrying to model and where Ed could say “Look, been there done that and all thattime you spend modeling minutia you could have been saving the company millionsof dollars with a sub-optimal but workable solution.” That won Ed and Radiance instant credibilitywith their manager since that exact issue was a battle he had been fightingwith his team for a long time. His teamwas still a little overly reliant on imperfect models and less on theirinstincts of what solutions would work. It simply takes time to build a twenty year record of experience, andthat experience among our consultants was where Radiance could outshine mostother consultants!

On Thursday morning, I flew to Minneapolis. Seattle was a balmy 34 degrees comparedto Minneapolis,which was 10 degrees with a wind chill of minus 10. Still, not letting cold get me, I walked fourblocks to get water and Gatorade and a couple snacks. (Yes, I am a cheapskatewhen it comes to buying these things in a hotel. I refuse unless I am desperate.)

The Vancouver trip went well,Keith got his passport in time to drive to Vancouver and make it to the meeting ontime. They attended the pre-bid, touredthe facility, and got a list of the competition – which was veryimportant. I saw two issues instantlywhen I read the competitors list and asked about a rough guess on the projectsize. The project was not as big as wethought it would be – we had hoped it would be over $350,000 – but it wasaround a $100,000 project at first glance. Our travel expenses would be over $30,000 for the trips we would have tomake. On a $350,000 project, we could eat a large portion of those expenses andstill have a profitable project. However,on a small job like this it would be difficult to near impossible to eatanything. So I told them to sharpentheir pencils and consider what creative options we could propose. We needed to make sure BC Liquors knew thatwe were by far the most qualified to save them a ton of money with oursolution. (In hindsight, we probably should have gone straight for the very low base with a success fee sweetenerand eaten almost all travel costs.)

Due to my mandatory customer outreach calls, we received a returncall and a new opportunity from a past client. The past client wanted us to do a study for them in Croatia similar to the one we did for their Alabama operation.

We also got a new lead through Rod, who found a person thatused to work for him was head of training at a medical device firm in Puerto Rico. ThePuerto Rican firm was looking for process improvement help and Rod’s call wasperfectly timed. Sven and Rod talkedwith them about possible options and were ready to give them a proposal by theend of the week.

Chanel arrived in Minneapolison Friday morning. Our Friday lunch meetingwith an ongoing client’s CEO however was cancelled at the last minute. So weworked on continued strategies and checked on where we were with the RadianceStrategic initiatives we had running. OnSaturday morning, Primetime called and begged off on dinner. He suggested wemeet first thing Monday morning at his office, to which Chanel and I agreed andhad to change our flights. Luckily, one of our friends (and past clients) wasin town for the weekend so we spent the day with him hanging out and talkingabout the trials and tribulations of his work..

On Sunday, Chanel and I worked on the presentation thatKeith and I were going to deliver to the Construction Products company onsupplementing their purchasing staff. That was supposed to take place on Tuesday in Milwaukee. Since we knew they had a low price point, itmade sense that we involve Purple, since they had staff that might be availableand could work profitably at a lower price point than Radiance could. Yetagain, another example where I was thinking about how to utilize the entireorganization instead of focusing only where it meant direct dollars toRadiance.

January 31, 2009 – Marketing not Making the Grade on Public Relations

2010-12-16T01:00:00.002-05:00

One area that I thought we had been slack on thatmight have given us a little more visibility was Public Relations (PR). Radiance as a firm had never been big onpress releases and public relations. Ihad been pushing Chanel to get her crew in gear and release anything andeverything about us into the right channels, whether it was a project for aclient (named or unnamed), certifications, new employees, conferences,presentations, etc. Anything that wouldput our name repeatedly in front of potential clients was to be pursued. Unfortunately, I didn’t think our staff understoodthe importance nor the urgency nor was this automated enough, nor was it ontheir priority list, therefore it got short shrift. I knew they were busy, but if they couldautomate it through a database or standard group email that would go out to alltheir sources, that would have made it much easier and quicker to produce. Ipushed Monte to get to know all the editors at the industry rags and majornewspapers and work to position our guys as the GURUS in their fields. That way whenever journalists looked for aquote or some expert to call to ask questions our guys would come to mindquickly. I know it takes effort to dothis as well as an investment of time, but a savvy “expert” could work theirway into an inner circle within months – as long as they were credible.

January 29, 2009 - Updating Skills

2010-12-15T01:00:00.001-05:00

As part of my campaign to increase and sharpen everyone’sskills to increase their marketability, Grady achieved his Certified SupplyChain Professional designation. Hisemail to me said,

“Thank you very muchfor your support in initiating and funding the drive to achieving this distinguisheddesignation.”

That thank you made me feel good, because he was initiallyhesitant and asked me - why do we need certifications and retraining? Lydia was also instructed tosharpen her skills and this week she gave her first speech, the “Ice Breaker”at Toastmasters which she was excited to get through.

I don’t have children, but the pride I felt in my staff’saccomplishments was a small consolation in the sea of turmoil.

January 28, 2009 – Grunge City Business Development

2010-12-14T01:00:00.002-05:00

At this point we had billable work for Martin, Grady, Sven,Ed, and possibly some for me. We neededto get Rod, William, and Parker engaged. To this end, Parker got us into Amazon this week and Keith was leadingthe charge to Vancouver right after Seattle, then on to Wisconsinthe week after.

I arrived in Seattleon Tuesday mid-day and arranged to meet with Kurtis, an old school friend fromFuqua, for dinner. Keith arrived in theafternoon and we headed out for a quick tour of the town and the obligatorytrip to Pike’s Place Market to see “flying” fish. After a quick walking tour, we met Kurtis ata trendy place called – get this – Purple Bar and Grill. Kurtis worked for Amazon recently but leftfor a more exciting position with a consulting company. He didn’t have many insights or insideinformation for us, besides this was really just a friendly get together, not abusiness information session.

Remember that Parker realized just a couple weeks agothat he did not have a current passport; and that he needed one to get into Canada? Keiththought that was a big issue and made a huge deal over it. Well, Keith realized while we were out withKurtis that he did not have his Passport. So he had to have his wife FedEx it Wednesday morning for early deliveryto his hotel Thursday BEFORE he could leave for Vancouver for an afternoon meeting. Instead of leaving right after the Amazonmeeting on Wednesday, he had to wait until the morning of the meeting to driveup from Seattle.

January 27, 2009 - Conference Call on the Divestiture Situation

2010-12-13T01:00:00.002-05:00

We began the week on the divestiture front with an outlineemail and then a follow on conference call involving Scotch, Vijay, Jason,Chanel, and me.

Scotch sent a few of histhoughts ahead of our call:

1. The confidentiality agreement with Transitprecludes us from negotiating with anyone else while we are doing so with them.

2. I think Transit is the most compelling, andlikely "cleanest," option, and thus I would like to see us run thatto the ground before we do anything with Townes. (Paresh, has Townes seen the 2007 & 2008numbers yet?)

3. I believe we carefully let Primetime knowthat Townes has popped back up as an interested party but that we would muchprefer working something out with them; however, it means an acceleratedtime-line in terms of determining if they are serious, and at what price.

4. If Transit falls by the wayside then we moveto Townes and let folks decide if they want to get some skin in the game, orelse see Radiance shuttered. That is, dothey believe in Radiance's future enough to put some of their own money atrisk, alongside with Townes, or would they rather just look for other jobs andlet Radiance dissolve.

5. Paresh, since Radiance has no cash currently,what is our legal severance obligation other than to you and Chanel (since youragreements are with Purple)? Iunderstand we may view this differently from a "moral" perspective,but could not recall if we discussed this particular point in December.

Talk to you at 1:00.

Thanks, Scotch

As you can see from the tone of the email, we were gettingdown to the wire in terms of divesting the firm or simply stoppingoperations. Number Five in the emailabove was a big issue. I view business leadership as having a moral imperativealong with a legal one, Scotch and I disagreed somewhat over the severanceissue. Regarding the severance, I viewedthe requirement that if Purple decided to pull the plug on Radiance within thestated one-year term of the retention and severance agreements, then Purple wason the hook to pay out. I also believedthis moral imperative was, in a way, retribution against Purple for allowingTeflon and Mukesh to rape and pillage Radiance and thus jeopardize thelivelihoods of the staff – and the balance sheet of the company.

Chanel and I made plans to meet Primetime in Minneapolis over theweekend and take him and his wife out for dinner since he was always on theroad. During this meeting, I planned togive him a time limit on getting the deal done or allow us to negotiatesimultaneously with Townes instead of following the agreement.

January 26, 2009 - Past Failures in Customer Relationship Management

2010-12-10T21:50:00.000-05:00

As part of my roundsthat I have been making, I thought it necessary to go and meet with as manyheads of our customer’s companies – or their direct reports – as I could. Onefirm that Radiance did a great job with a couple of years ago was an airportvehicle manufacturer in Atlanta- TUG. Since I was in Atlantaso often, I kept calling and trying to get in the door, but this guy wasimpossible to pin down. Finally, Ipulled out the card that strikes fear in people by telling him “I’m right nextdoor, I’ll come over to just say hello in the lobby.” Frantically, this Dutch guy actually said “AsI’ve discussed with you, No Thanks.” Talk about a tough customer, we did a bang up job for this guy’s firm –although he was not involved with the firm at the time – and he continued toblow me off. Yet again, a failure of theformer Radiance staff to stay connected with their customer base keeps doorsclosed all around us.

January 28, 2009 – Quid Pro Quo on Cross Selling – I call Purple out

2010-12-08T01:00:00.000-05:00

Jason and I had a phone conversation about the lackof cross selling within the company. Hetried to lay it all in my lap saying that I should have known Simon was going tovisit Amazon just days before our visit. I shot back that we actively look for opportunities to bring Purple in,just like the Diamond Chainproject we just landed, because we (I) can recognize Purple opportunities fromafar….then I called for “quid pro quo among our tiny conglomerate.” This is another example of how I, the leaderof one of the subsidiaries, keeps an eye out for cross selling and otheropportunities for Purple but that Purple is very lax in getting to understandour work and how they could leverage Radiance to win more work or to bring usin to enlarge the revenue pie within the entire umbrella organization. I chalk this up to Too many selfish narrowminded people to make cross selling successful and a lack of leadership atPurple to bring about a change in the self promotion culture. If Purple’s leadership is not willing toforce change upon their business development and leadership team oncross-selling, then nothing will ever change.

I sent another email to Jason, Scotch, Vijay, andChanel on a back of the envelope cost/benefit information on options withdifferent acquisitions. I continued tojustify why various people were needed and how cutting staff at this low astaffing level diminished the value of the firm from an acquisitionperspective. I suggested waiting to seewhich buyer moved ahead and what indications they would give in who they thinkwould benefit them and who might not be needed.

January 27, 2009 – Updating Our New Attorney on the DCH Lawsuit

2010-12-07T01:00:00.000-05:00

I sent Scotch and the new attorney a background timelineon the Dewey Cheatham and Howe lawsuit.

Ø 2003 Purple purchases Radiance

Ø March 2006 Teflon leaves Radiance to work atDCH – still receives his earnouts

Ø March 2006 DCH and Radiance sign an allianceagreement

Ø May 2006 Teflon recruits Ed, breaching thealliance and his agreement

Ø April 2007 DCH decides to build a practiceto compete with Radiance

Ø December 2007 Teflon recruits Charliebreaching alliance agreement

Ø January 2008 Charlie and Purple sign aretention agreement

Ø March 2008 Purple hires Paresh and Chanel totakeover at Radiance

Ø April 2008 Teflon hires Troy

Ø May 2008 Mukesh leaves Radiance

Ø June 2008 Mukesh sends email to Radianceclient base notifying them of his move to DCH

Ø July 2008 Teflon hires Smith

Ø July 2008 Teflon hires Charlie, who breacheshis retention agreement

Ø July 2008 DCH sends a letter indicating thatthe alliance agreement is finished

Ø August 2008 Scotch & Paresh meet Teflonto discuss resolution to DCH, Teflon, Charlie, and Mukesh all breaching theiragreements

Ø September 2008 Scotch attempts to talk withBrigg (DCH COO) about breaches

Ø October 2008 attorney attempts to negotiatesettlement with DCH on breaches

Ø December 2008 DCH’s counsel tells us toforget about a settlement

January 26, 2009 – Dealing with Divestiture

2010-12-06T01:00:00.003-05:00

Our largest client finally pulled the trigger on anotherproject, although small at $30,000, it should only take a few weeksintermittently to complete the assignment. Something to keep Martin busy about a third to half time.

Last week I talked with two of the three potential acquirersthat were known at the time, Townes and URS. I sent the following email updating Jason, Scotch, Vijay, and Chanel onthe situation:

Transit - no feedback from Primetimeyet.

URS - the tie in would be to theWashington Group. URS is constantlyseeking growth since they are a publicly traded engineering behemoth and willbuy a number of unrelated businesses in seeking growth. URS wants a proforma. Imet with the SE regional manager Friday.

Townes (the wheeler dealer) -- is upto speed on our current situation. Wantsme to probe Sr. Radiance staff about investing in the firm through 401k - alternativeinvestment vehicle, between $10k and $25k each to $150-250K for preferredshares. He would inject between $300& $400k and find at least one other "industry" investor at thatsame level along with deep rolodex. Purplewould remain involved as a partner and potential source of capital. Would like us to find a KPMG/Booz/Bain personin the industry that would like to transition to smaller firm - inject 1Xsalary for equity position. Townes sayswe are still too small to make much money and need "advisor investors withdeep rolodex's -- essentially retired rich guys" to really secureconnections to work. He wants a fiveyear plan with a buyout of his position once/if we reach a 12% IRR for hispiece. Purple would be bought down...orcould stay in if desired.

Townes is very driven to getsomething done. I think he might be looking for a Carolinabase, since his youngest just graduated high school and will be going to University of North Carolina.

I need GUIDANCE on dealing with Townessince he is going to drive this (me) fairly hard. For example, he wants to know immediatelywhether or not our staff will invest anything -- he sees this as the firstlitmus test to viability. Beyond that, he thinks another couple investors wouldmake sense.

What do you think about my situationwith Townes? This is really a directrecapitalization through equity & share dilution instead of an outrightsale. This might not meet Purple'sneeds.

For reference, Townes is a serial entrepreneurwith a track record of buying undervalued businesses, growing them, and cashingout.

Purple,in particular Jason, was strangely silent about this email. I felt that I was expending lots of effortand presenting information that needed to be discussed to prevent unnecessaryaction. Unfortunately, this was apattern with Purple, to go silent, then chop heads indiscriminately. I have never thought they made sound,rational business decisions in many cases, usually it was an emotional eventthat caused them to make a decision. Otherwise, they ignored issues, problems,and people. My concern with addressingthis among Radiance staff was that we just got things calmed down after all thedefections to DCH and the financial crisis, so this could cause the uneasinessto begin all over again. I was not readyto tell everyone that we were going to sell the firm or close it soon. Therefore we had to find a buyer or get morework immediately. To me, sharing thisinformation would be about as de-motivating as any message could be. I could envision sharing this information andhaving the three or four most mobile people stop looking for projects and startlooking for another job. I was sure theyhad oars in the water on this already, however, if they knew how dire thesituation was they would go into job search overdrive.

January 24, 2009 - Creating a layoff plan

2010-12-03T01:00:00.002-05:00

To say we relaxed was an overstatement because even thoughwe thought we had breathing room, Chanel and I still had to have our scenarioplanning exercises. We had to do projections of layoffs based upon work notcoming in the door.

Purple was still in a panic over financial losses that werenot part of operations but money they had in the bank. So the real issue wasn’t how much we werebleeding, but rather that the family had lost tens of millions of theirinvested portfolio, where they socked profits generated by Purple and the factthat Purple was suddenly not selling anything. Our losses were peanuts compared to this. So Jason, Simon’s, and Scotch’s psychologicalstates of mind were not good and in that state of mind they were not likely tomake sound decisions regarding Radiance. Radiance became a complete nuisance. So I really was having to go italone. Jason asked again for a list oflayoffs and the order that I would do them. This was what I gave him assuming I had to do it today: Wave one would be Lydia, William, and Parker. Wave two would be Martin, Grady, Rod, andChanel (yes, we are not immune). Wave three would be everybody else except Edand Sven (since they had the new active project). In another scenario, I assumed that we wouldoperate as a skeleton and I suggested that Radiance would keep Monte, Ed,Martin, Sven, and Keith. That wouldessentially keep all execution and business development skill sets availablefor continued performance at Radiance but minimize staff.

January 23, 2009 – Radiance Gets Radiant - the office mood improves

2010-12-02T01:00:00.001-05:00

Ever notice how a busy workforce is a happy workforce? There is a balance between being comfortablybusy and being overworked, but a workforce that is underworked is rarely happy.People want to achieve a rewarding feeling from their work.

Our travels next week would take us to Seattle to meetAmazon, Vancouver for a pre-bid, Minneapolis to meet with Transit aboutacquiring us, and Milwaukee to touch base with a couple of Keith’s contacts. We were to negotiate the final rates andscope with the construction products company – Johnson Controls. It was going to be a busy week. Even Parker had reached out to a formerclient of his who was interested in getting a study done on voice activatedequipment and wanted to talk with him next week.

After months of bad news after bad news we finally had a lotpositive energy among the staff, there was a better attitude in the air, a goodbuzz, and we had more promising potential work (a pipeline of leads that wasfilling up, which is what happens when you hire competent people instead ofhacks) than at any other time during my tenure at Radiance. I felt that we were finally gettingsomewhere. All we had to do now was make sure we converted these leads intoactual work.

If you included these two projects, Johnson Controls andSEMI, with the project we just won, add the project that was winding down, andassuming that one or two more projects would walk in the door, which was ourhistorical norm, then we were very close to being flush with work. Chanel and I were chomping at the bit to beable to turn to Jason and say “SEE we told you we just had to get the rightpeople on board and the right processes in place to turn this around.” On Friday that next project walked in thedoor. A past client of both ours and Purple’s called us and wanted Radiance todiscuss a proposal for a new project study in Czechoslovakia – the same as one wedid for them a couple years ago. This was enough positive momentum to help usrelax just a little.

January 22, 2009 – Exercises in Bidding

2010-12-01T01:00:00.000-05:00

Although we had seen a drop off in buying since October, wehad not seen a drop off in firms wanting pricing for all kinds of consultingand support services. Obviously they were scrambling to find ways to cut costs. I wondered if all our bidding was to simplyprovide justification for utilizing their internal staff by showing howexpensive it is to bring in consultants. I wondered if there was any strategy to combat this. Rod and Keith bothhad their teeth in a couple of very promising engagement proposals. Rod had a pharmaceutical company asking us tohelp the CEO develop a proper dashboard of his operations that he coulduse. Keith found a good long term,although not a huge money making project that would place two or threeconsultants full time for six months or more with a multi-billion dollarconstruction products firm. Since wewere headed to Milwaukeeat the end of the month, Keith and I were to do the final negotiations withthem during our upcoming trip and get the project launched. So we thought we had these two projectspretty well locked up and they would provide some much needed revenues andcover three or more people.

After some gyrations with Diamond Chain’s internalstaff, we managed to keep forward progress on the Diamond Chain project, theone we brought Purple in on, by keeping them on track for the kickoff meetingscheduled for this week. Finallysomething was moving forward instead of being put on hold or going back tobudget revision.

January 21, 2009 - Rouging the Pig

2010-11-30T01:00:00.000-05:00

I arranged to meet with URS, a large engineering andconstruction firm, in Atlantato see if they might have an interest in purchasing Radiance. An old college friendof mine was a department manager and we talked a bit before he introduced me tothe regional vice president. My thinkingbehind contacting them was that their firm, URS, was nicknamed “You are Next” because of their voraciousappetite for acquisitions. Chanel and I pulled together another version of theproforma and gave them enough information that they could determine their levelof interest before taking a deeper dive into our operations. I hoped their appetite had not yet been satedor slowed by the financial crisis.

Playing show and tellwith Radiance’s operational information, we had to be careful not to share toomuch, be we also had to be fairly aggressive in providing information sinceJason was really beginning to panic. Sowe focused on the reputation and other strengths of the firm, otherwise knownas Rouging the Pig, and minimized the current weaknesses.

In addition to the meeting with URS, Chanel and I soughtother connections for a possible acquisition. I reached out to an old acquaintance, Townes; barely an acquaintancereally. I had been introduced to him a couple years earlier when Mukeshintroduced Townes to the Purple management. Jason asked me to attend the meeting as a consultant to Purple. The guy was a moderately successful privateequity investor that was interested in returning to North Carolina where he could be close tohis kids. Two years ago, he and Mukesh wanted to buy the business back fromPurple. Purple, having almost nointerest in Radiance (other than the fact they owned 100% of the firm by thispoint) didn’t bother to work on the sales agreement and let the deal die – totheir latent chagrin. Townes also justhappened to be Monte’s father – a potential reason for him to want to keepRadiance afloat. Townes was a wheelerand dealer and nothing he did was simple, which was diametrically opposed to Purpleand why, as Scotch explained to me, that he let the deal die the first time –he thought it was just too complex for what should be a simple acquisition.

I had an hour long telephone conversation with Townes aboutRadiance. I am sure I told him too much, but at this point I really had littleto lose. Jason was breathing down my neck wanting to cut losses and run, so anysalvage value I could get out of the firm would make this a win. I also needed to be fairly up front withTownes so we would not go down the path of due diligence and have him uncover dealbreaking information – which the firm’s operations were transparent enough thatanyone with moderate business experience could quickly assess what waswhat. Most of our conversation centered onthe current financial crisis including how it was impacting our ability to getwork, and secondly the lack of interest and integration of Radiance intoPurple’s operations. I told him that Iwas the only person that had ever shown an interest or had the knowledge neededto integrate or leverage Radiance and Purple. Not only that, but I was not getting the chance to move the integrationforward since I had been fire fighting and trying to justify our existence morethan leveraging my relationships with Purple’s staff. All the relationship development required to keepthose relationships in place took significant time.

January 19, 2009 - Methodical Business Development, is it an Oxymoron?

2010-11-29T01:00:00.000-05:00

Rod was truly motivated by the Dale Carnegie training thatreinforced what he knew instinctively about business development – that youshould have a methodical approach to it and it is not about having a smarmypersonality. Plenty of business development or sales people out there have areputation for being smarmy (or too friendly by half) and that just doesn’twork on today’s jaded purchasing agents. Rod spent the weekend going through his list of Radiance’s past clientsthat were assigned to him with the goal of reconnecting over the next fewweeks.

Considering that Radiance’s customer list in the CRMdatabase was absolute garbage, here’s an email Rod sent to his fellow employees:

Of the 54 Past Clients on my listto call, the 24 listed below do not have Opportunities/Cases listed on SalesForce nor could I find any project history on the server.

Could you please take a quick lookat the list and let me know if you recall any of them being a past client?

Rod

This email exemplified how poorly Radiance’s businessdevelopment and marketing had been managed in the past by Teflon and Mukesh - theycould not keep simple customer information up to date. Radiance was plagued by frequent losses ofcorporate knowledge that were necessary for managing customers. Unfortunately,I believe this poor execution was typical in many firms and not justRadiance. If employees are busy onpaying projects, then they cannot be bothered to do those things that will helpmake themselves and the firm exceptional. Luckily, Chanel was very detailoriented and worked hard to ensure that any future information anybodycollected was captured. She also had to ensure that any existing information considered“lost” on servers or in hard-copy was converted and put into the Deltek CRM.

Lydia’s update this week on the result of calling pastclients shows a severely aged customer list. Not sure how much more I can beat this drum, but there was no real CustomerRelationship Management at Radiance in the past. That was sad commentary on a fifteen year oldsupply chain consultancy. Now for thestats: Of the phone calls made to date,sixty-eight were to people that were no longer with that company, thirty-sevenwent into voicemails and were likely to be screened, and only sixteen made itto the person they were trying to reach. A consulting firm cannot survive with such a low emphasis put oncontinuation of customer relationships.

January 16, 2009 – Conflicts and About Faces

2010-10-28T01:00:00.000-04:00

On Friday Scotch and I were told by our legal counsel thatthey had a conflict of interest in representing us against Dewey Cheatham andHowe. This meant that we had to go to another firm and everything would grindto a halt in the meantime. This was alesson for me in legal strategy. Ilearned that large companies spread legal work around in jurisdictions thatthey operate in so that they keep all the attorney firms (where the largecorporations have offices or operate) tied up with conflicts of interest. It is an interesting strategy to minimizelawsuits. As for a strategy to manage the spend on the attorneys, Scotch decidedthat we would propose a fixed fee of $5,000 to the new firm which was to beused to get us to a launch point on the lawsuit. We figured that a settlement would occurahead of any significant legal expenditures (before they burned a significantnumber of hours), and prove out that the lawsuit would hold water. I hoped they would work for such a slim fee.

Chanel had us lined up to make a presentation at the CFORising Conference in March and we had William slotted to make the presentation. But one afternoon Rod and I were casually talkingabout his experience managing a LEAN project working with Sara Lee in the Caribbean. As he wentthrough the project in some detail, I could actually relate to what he wastelling me – his description was not all technical mumbo jumbo and LEAN lingo. I told him this was exactly how we needed tobe talking with potential clients, STORY TELLING, without all the technicaldetail that typically went with our engineering sales presentations. After hearing Rod’s story, I immediately calledChanel and tell her we had to get Rod to tell this same story at the CFOconference. CFO’s are highlyoperationally focused, and with a much more strategic view in a company anddefinitely have purse string control over projects. Unfortunately, William would have to hold hispresentation for another day. Rod onlyhad a few weeks to hone his presentation for submission to the CFO conferenceorganizers.

Ed was having problems reconnecting with MarshallTeichert to assist them after their project manager died from a stroke. He found out they hired another consultant to lead the project - nowthat was very unsettling. Putting a new projectmanager on a project that was 75% complete is never good and add that to thefact he competes with us on projects was not a good combination. When I asked Ed about the situation, Ed’swords were “Martin has worked withRadiance before and I have worked with him on two projects where we brought himin as a sub. Hopefully the transition will be smoother since we know eachother.”

January 15, 2009 – Customer Visits

2010-10-27T01:00:00.002-04:00

Parker pulled off a coup and got us an interview at Amazonin Seattle. Thisgoes to show that these new hires (that Chanel and I made) had the rightconnections, we were just getting the shit kicked out of us by the financialcrisis. Keith suggested tying the Amazon meeting together with the BC Liquorproject we were chasing in Vancouver, British Columbia (BC Liquors required apre-bid meeting) and then we would reconnect in Wisconsin to visit Kohler,Harley Davidson, Johnson Controls, and Raytheon.

Keith and I had an interesting discussion about the trip andabout Parker more specifically. Parker apparently told Keith, but did not wantto tell me, that he did not have a passport and would not be able to get into British Columbia. Keith was not so sure that not having Parkeralong was such a bad thing. I told KeithParker was putting the project approach together and he absolutely needed to bethere. When I asked Parker about thisissue, he hesitated, but I reminded him he was integral to the BC project andhe needed to be there. I told him to gethis fucking passport and pay the $75 expedite fee. (They had been talking aboutgoing to BC since November and suddenly he realized he needed a passport!!!!) I relayed the message to Keith and told him tocoordinate with Parker. Keith sounded alittle disappointed that Parker HAD to go with him. Keith said he’d internalize his sorrow. I toldhim we can drink his sorrow away as we cross the “frozen tundra of Wisconsin in lateJanuary” to which he replied, “Cheese, beer, and freezing temps, what elsecould you ask for.” Now THIS was thekind of banter I wanted to have with my people - Upbeat and always looking toturn issues into opportunities – somebody had to look on the bright side.

January 13, 2009 – Creative Begging for Work

2010-10-26T01:00:00.000-04:00

Every time we came up with a variation on the work we werewilling to do, it required a marketing piece to be built around it. Chanel spent most of her time working with businessdevelopment and a few of the consultants on pieces that highlighted one aspect oranother. One service that was really asubset of work that we did was called Slotting. Of course nobody actually called it that in the privacy of our office –even I got in on it saying that I wish our consultants would stop “slottingaround”.

Sometimes, in fits of frustration, I wrote things that werequirky, but probably not the best things to send out to potential customers. Here is a draft letter that didn’t quite makethe cut that I was going to send to our past clients.

Dear XXX,

I can tell my board of directors that we are working on a success feebasis -- I cannot tell them I have highly compensated consultants countingpaperclips and ceiling tiles.

As CEO of Radiance, I know what it is like to have boards ask toughquestions and want solid answers NOW. Unfortunately, getting answers requires spending money on consultantsthat provide insightful, apolitical, and dispassionate analysis.

At Radiance we have had numerous projects pushed back, delayed, orcancelled the past few months. Thoseprojects were all opportunities to find where money was being wasted and shinea light on them so they can be improved. We need those projects! You need those projects! Let us show you wherewe think the money is and we'll talk compensation later. GIVE ANSWERS TO YOUR BOARD NOW, DON'T LETANOTHER QUARTER GO BY.

Please get these consultants out from under my feet, they are worse thantoddlers.

Sincerely

Paresh

While that letter didn’t lead to a mass mailing and phonecalls, it probably should have, because we didn’t have anything to losereally. However, that letter sparked asix foot tall grumpy old man cutout that we used at a few conferences. He did get some attention. That's were the image of Crusty came from.

January 12, 2009 – The Financial Crisis Moved My Cheese

2010-10-25T01:00:00.001-04:00

At the weekly meeting I introduced the Past Client Calls BarChart. I thought this document, would bring accountability tomotivate staff to make calls to contacts that were assigned. This was shown in the weekly meeting and wasposted in the office for all to see.

One of our past clients, Shaw, was actually enthusiastic and was veryinterested in talking with us again. They were going gangbusters with most of their work focused on oilrelated industries in the North Sea. The scopeof work we discussed would involve both Radiance and Purple, so I begancoordinating a joint meeting at their office in Houston.

This week was follow up week for all the firms that told usabout active projects that were being delayed until after Christmas. Most asked for a recovery week after the newyear, then followed up with them. Project after project was getting cancelled orgoing internal so the firms could justify keeping staff. Projects in Iowa, Wisconsin, Greensboro, Puerto Rico, Ohio, Georgia,New Jersey, Texas,Maine, Florida– they were dropping like flies. I could not believe the fallout!

From my perspective, I finally hired an experienced businessdevelopment person (Keith) and got him on board three months ago, then BAM! aglobal financial crisis hits and locks up spending within our customer base –manufacturing, distribution, and automotive firms. Keith, who beats the bushes like nobody Ihave ever seen to flush out projects – The old Radiance didn’t have a clue howto find projects like this – and we could not even get to the proposal stagebecause the projects were getting canceled left and right. I despaired, - How can I keep the companytogether in this atmosphere?

Luckily, even as projects fall off the list, Keith quicklyrefills the project chase list with new projects. He must have been making a hundred calls aday. One potential project for JohnsonControls looked like it might have been another tie in with Purple, where wewould do some work and could bring Purple expertise in as follow-on. That would have been another feather in ourcaps - if we would have started feeding Purple work. The issue holding us backat this point was the rates they were willing to pay, which we knew will bemiddling at best. But at least it was work and the rates were good enough thatthey could help cover overhead and BUY US TIME. Their offices also just happened to be in Wisconsin where we would be making a fewbusiness development stops later in the month, so we figured by then we couldsign off on a contract and begin work.

Chanel and I looked at the business development trip shapingup for the end of January and decided to insert a weekend in Minneapolis - when Transit could meet with usto talk more about the acquisition.

January 11, 2009 – Tempting Transit to Take Radiance on a Date

2010-10-21T01:05:00.001-04:00

With the changeover to Deltek, Chanel and I decided toharmonize Paid Time Off (PTO) policy as well as payout of earned PTO. It was easier to accrue PTO in the system inthis way and made it easier for Purple to administer our HR. This was just another little step we took toget the companies aligned – even though we were on track to divest thefirm.

I circled back with Simon on Primetime and catchingTransit’s interest. We attempted toestablish a call with him, but didn’t work out. Eventually, Simon and Scotch ended up talking very briefly with Transitand Transit wanted to see a customer list with types of projects and projectvolumes. Having prepared thisinformation for our own internal use, I turned it around that day with a littlehelp from marketing.

On Saturday, Tranist sent an email asking for a laundry listof items. Chanel and I worked on this allthe weekend, essentially updating the document from our last board meetingincluding proformas, salaries, and past clients.

Chanel and I continued to talk about Radiance’s options,which would be great if we were able to get more work in the door, enough tobecome neutral during this horrible crisis, and find a home for the firm withTransit or another firm. We were workingourselves to death, keeping the nature of what we are doing on a divestiturepath from our staff, trying to keep everyone upbeat and motivated, and at thesame time working to keep Purple at bay, Jason in particular. We needed to keep his “the sky is fallingemotional rollercoaster ride” minimized with positive news. That was a tough tightrope for Chanel and me towalk, living in two worlds at the same time and trying to not go bonkers or saysomething inappropriate.

January 10, 2009 – Turning up the heat on Dewey Cheatham and Howe

2010-10-20T01:03:00.001-04:00

Scotch followed up with the action against Dewey Cheathamand Howe and asked me if I consulted Jason on whether or not to pull thetrigger. I told Scotch that Jason gaveme confirmation and asked that I use him [Scotch] as a sounding board. Jasonfelt Scotch could provide guidance to determine when and if to cut bait should thelawsuit not look promising.

That really bothered me about the decision making processwhich is common in a majority of firms. When somebody is trusted with a green light to go make something happen- such as to save money, pursue litigation, chase projects, create a new market– why is it that people tend to continue to ask permission and wait for answersto go up and down the chain of command? It does nothing but bog down the whole company. That’s where a strong, clear, concisestrategic plan with lots of tactics and directives and regular follow upreports and meetings provide a clearer picture of decisions that support thebusiness versus decisions that do not. In addition, if decisions were addressed to a small team with a primaryleader, then the leader, assuming competence, would be able to consult the teamand make a decision. It is quick,responsive, and reliable.

Signed contracts – never work without one. Many of our clients send a simple lettertelling us to go to work. In my world(construction), it was part and parcel to have a signed contract before you“get out of bed.” One company that Radiancedid $30,000 of work for did not pay us, for whatever reason, and he neversigned the contract. I think that was astandard tactic of this firm and they simply switched firms that they workedwith in order to avoid payments. I was determinedto pursue the firm, after consulting with Scotch on his experience (write offversus pursue). It appeared that for thesmall sum of $2,000 we could pursue the firm, and since they had not declaredbankruptcy, we could get a judgment. Whether we would ever see any money or notwas another issue. I figured at leastother firms, if they checked credit, would see that this firm had outstanding judgmentsagainst them.

January 9, 2009 – Landed Another Project

2010-10-19T01:02:00.001-04:00

Ed, Sven and I met in Indianapolisalong with David from Purple. I had about a four hour drive from mygrandparents up to Indy for the meeting. It was supposed to snow so I was glad to get there before it brokeout. We met at the Hyatt then went for dinner at arestaurant nearby. I guided thediscussion to talking about everyone’s experience and worked on getting somefamiliarity going. By the time wefinished dinner I was convinced we could carry this off. However, just after midnight I awoke and spentthe entire night throwing up every hour and I slept on the bathroom floor. I thought to myself, this was ridiculous -getting sick the night before one of our most important presentations inmonths! At about seven in the morning, Icalled Sven and told him I could not make it and that I was not certain if Igot food poisoning or some kind of stomach virus. So Ed, Sven, and David got to go have allthe fun – I love making presentations – while I hurt and vomited the remainderof the day. Sven called after lunch andasked if I need anything. I asked him to go round up a bunch of Gatorade, TUMs,and headache medicine. He knocked on mydoor with the requested goods in short order and I started sipping Gatorade inbetween naps and trips to vomit. I knewI had to get my stomach settled and I had to stay hydrated. I extended my hotel stay and decided to drivehome instead of trying to fly. I drove tenhours, the first three in snow, to get back to Raleigh. I ached, my stomach was queasy. Imade it by nibbling saltines, sipping Vitamin Water, and eating Advil. It was the worst trip ever, almost as bad asflying overseas with the flu. At least ona plane I could sleep.

As for the presentation, Sven, Ed, and David did a great jobas was evidenced by the response from Diamond Chain. We just hoped it was good enough to get theirconfidence and hire us.

Late Friday we got word that Diamond Chain selected us and wouldmake a recommendation to the CEO. Theproject needed to be completed in six weeks, which we also really neededbecause of the accelerated cashflow. This cash would cover our entire overhead for a month. We were over the moon and crossed our fingersthat the project would be green-lighted immediately by the CEO early next week.

January 7, 2009 – For Whom the Bell Tolls

2010-10-18T01:00:00.001-04:00

This was the first week of tracking calls to pastclients. Marketing provided lists foreveryone to follow based loosely upon areas of interest or past relationships. Thefocus for the call was simply to ask what impact the financial crisis washaving on them and to reconfirm our connection to their company. I asked everyone to use Salesforce, our Software-as-a-Servicesolution that was replaced by Deltek, to find what information we had, then enterany additional information they gathered – including where to find project datasheets or other project information on the server – into Deltek. I was certain that this massive andmethodical approach in one fell swoop would prove once and for all that the CRMinformation touted by Radiance’s past leadership was absolute CRAP. That’s the thing about CRM information, ithas to be current, it has to be managed, and people have to be held accountablefor MANAGING their CUSTOMER RELATIONSHIPS. For a service company this task was paramount because this business isall about the relationships – we are not selling soap!

Rod updated us on a couple of outstanding opportunities heuncovered over the holiday – he was always on the phone making connections.

Early this week our main contact and supporter at a majorclient of ours (Marshall Teichart ) has a stroke and died. Ed asked if he could go to the funeral and Itold him to go ahead. We also had to decide whether we sent something directlyto his family or to his office. I let Eddecide that based upon how close his relationship was. Losing a big supporter like this was bad forus, because we knew that the next person appointed might cause us trouble forany number of reasons. Therefore, anythingwe could do to provide support to the firm during this transition period weneed to be involved in. The firm providedconsistent projects to us over the last two years and we needed to help themthrough this difficult period.

January 1, 2009 – Cross-Selling in Action with Purple

2010-10-15T00:55:00.001-04:00

Sven spent a couple days at Purple HQ with Steve’s team thenflew out to Texasto meet with the consumer goods firm for their big presentation. Steve said the presentation went well, butthey wouldn’t hear back until some time in February. What a long time to wait. But that was typical at this time of highuncertainty, we were in the midst of the financial crisis.

Even though he was on the road, Sven and I continued to makemodifications on the Diamond Chain proposal and Ed reengaged with us late inthe week. We had to go to Indianapolis to deliverthe live proposal next week. Late thisweek, with just a few days left to go, I FINALLY got Purple’s resource lined upfor the presentation – of course we wanted to present a united front - and he wasto meet us the night before the presentation at our hotel. I just could notunderstand why Purple dragged their feet instead of diving in to get involved.It wasn’t like we would not give them work out of it, but they drug their feetlike they were not interested??!! I evenmentioned this to Jason and he put it back on me saying that I have not “sold”the opportunity well enough within Purple. I asked why I have to “sell” Purple staff on possible paying work – butI knew the answer to that one already: Purplestaff had grown tired of the promises that Radiance made in the past and now WEwere paying the price for the past disappointments and disagreements.

On a positive note, through Hotwire, I was able to bookrooms at a four star hotel for $68 per night – that significantly reduced ourcosts for chasing this work – which we were now tracking religiously (cost ofclient acquisition). From the hotel it wasonly a short drive to the presentation location. I sent out an email agenda for our eveningbefore the presentation where I wanted us to get to know the Purple resource - Iwanted enough familiarity that we could banter back and forth a bit. This behavior would help ensure that in thepotential client’s mind we really werean integrated company that worked together.

December 31, 2008 – Work Never Stops in a Turnaround Situation

2010-10-14T00:53:00.001-04:00

The only certainty in life is change. Deltek was a change that everyone would haveto get used to. We wanted strict usageof the CRM and project management functions in the software and anticipated thenormal resistance to change which takes consistent enforcement – carrots andsticks. We know how some businessdevelopment people are with leads, they hide them, and we were crystal clear inour discussions about management of leads and sharing of information and wouldnot tolerate hiding leads or stealing leads from others.

Chanel spent all week on Deltek working with Lydia, Monte,and Debra inputting accounting information, creating reports, and transferringcustomer data. The whole data migration, even for our little firm, was a hugeeffort. I could not imagine having to dothis on a firm with millions of contacts, instead of thousands, and withcomplex accounting requirements with millions of data points. Creatingthe reports was also difficult because information you needed might have to betransformed in some way, but Chanel kept working with it until she figured outhow to get the reports that we needed.

Even now, our staff kept sending potential new hire resumesin for review – mainly because so many of their friends and company contactswere getting put on the street. Thereappeared to be a high number of quality people that needed to find work - toobad we didn’t have work yet.

BC Liquors

We really need to land this new project in British Columbia that was in preparation forthe Olympics. We had Parker and Keithriding herd on this project that was uncovered at the supply chain conferencein Floridalast month. We really needed these newguys to get us a win, because unless we got some of these new people engaged wewere just going to come to a halt and have no decision to make other than whatday to stop chasing work, lay them off, and potentially close the doors. I really did not want Purple’s board decisionto be a foregone conclusion, I was determined to find a buyer whether it meantany monetary reward for me or not. It was simply a matter of pride and concernthat my staff – people that I felt depended upon me for their livelihood – werenot harmed, or at least minimally harmed, by the transition at Radiance.

Utilization the week of 12/18 was down to 15%, roughly thesame as last year and just below years in the past.