Tuesday, July 30, 2019

The Change Train Needs More Than a Conductor

I caught a quick story in the Financial Post today about what companies do when things aren't going well, and they need a paradigm shift. The author focused on how one company - Best Buy - turned things around.

I found two planks kind of interesting. One plank,  is about a reorg -

"Putting a plan into action also requires the right people in the right places. Who gets brought in depends on whether the culture of the organization needs to be completely gutted or if a few tweaks will suffice. For example, in a situation of a complete reorganization, it may be better to change out entire teams under divisional leaders, especially if there is complacency and little buy-in. "

This strikes me, as I read this tweet this morning about Del Mar.
As most know, we've seen a couple things happen at Del Mar the last decade. They (along with others in California) raised juice, making payouts to customers worse; they replaced polytrack surfaces with dirt, which raised favorite win percentage, and resulted in (both in theory and practice) more breakdowns.

Now, let's say, like Best Buy, the culture was changed at the top.

Instead of switching surfaces, this new management said, we want fewer breakdowns, bigger fields, less chalk, and a better betting menu, and we'll reverse all those decisions.

I wish them luck. The existing stakeholders would want nothing of it.

Which brings me to the second plank, according to the author.

"A restructuring gives the company the opportunity to replace those shareholders who are not willing to support the company’s refocus. It is an important process to go through as capital partners need to be aligned with management and the plan about to be implemented."

The people who are giving you money need to buy-in as well. It's a house of cards without them.

In racing I find we often ask for change at the top; that management is bad; that they don't know what they're doing. Leaving aside if that's accurate or not, I'd contend it doesn't matter much. If someone was put in charge that demanded change, I highly suspect he or she would be run out of Dodge in two shakes of a lamb's tail.

Have a nice Tuesday everyone.

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