I’m assuming you’ve all seen the Quiksilver press release. Andy Mooney “…is no longer with the company.” President Pierre Agnes, the President has been promoted to CEO. Bob McKnight has returned as Chairman of the Board and APAC region president Greg Healy is now President of Quik. Former CFO Richard Shields has resigned, but will be around as a consultant to help new CFO Thomas Chambolle, who was formerly Quik’s EMEA region CFO, transition to his new job.
Out with the new, in with the old I guess.
We can, and no doubt will, all have a wonderful timing speculating how this all came down and what’s next. But people, let’s focus! I want to ask the same old question I’ve been asking about Quiksilver for years now, way before we’d ever heard of Andy Mooney.
Where are the sales increases going to come from?
A couple of days ago, when I wrote about Quik’s January 31 quarter, I said, “At some point, a weak balance sheet doesn’t allow you to continue reporting losses.” I also noted from the 10Q that Quik said, ““Year-over-year net revenue comparisons continuing to be unfavorable due primarily to the impact of licensing and currency exchange rates. Within this trend, we expect the rate of year-over-year net revenue erosion to decrease in the North America and EMEA wholesale channels.”
So it sounds like we’ll continue to see some “as reported” revenue declines in at least the next quarter.
In the press release announcing the changes, Bob McKnight is quoted as saying, “On behalf of the board, I want to thank Andy Mooney for his leadership in driving the organizational changes that were essential to restoring our product design leadership and globalizing many of our key functions.”
I don’t think that’s a throwaway line. Unless everything I’ve read is made up, Quiksilver had a lot of issues and opportunities in those areas and Andy Mooney was driving some critical operating improvements. I hope they continue to be driven.
If those changes were so “essential” why didn’t they happen before Andy Mooney got there? Fair question. Let me remind you what I said back on February 27, 2013.
“Remember when Burton cut The Program? In the press release, or in an interview, Jake said something like, ‘I didn’t want to do this, these people are my friends, I fought it and tried to figure out another solution, but the annoying and persistent finance people on my board wouldn’t leave me alone.’ From time to time, I am one of those annoying and persistent finance people, so I know exactly what he meant.”
“Organizations have momentum. People don’t like to change. Successful entrepreneurs have a high level of self-confidence and capability or they wouldn’t be successful entrepreneurs.”
“A founding entrepreneur or long time CEO is successful partly because of the values she has imbued the organization with and the consensus around what the company is about. There is a sense of “how we do things” that gives comfort not just to the stakeholders (of which the employees are one part) but to the CEO as well. People have an understanding of their place in the company and their responsibilities that goes beyond their box on the org chart. At its best, this can be liberating and create efficiencies.”
“But it only works as long as the competitive business environment it was created to function in doesn’t change too quickly or dramatically.”
A new executive in a turnaround is hired to do hard things the old executive couldn’t or wouldn’t do, and he has to do them with a sense of urgency. Sometimes, that just doesn’t win you friends or supporters. Sorry. Cutting expenses, letting people go or changing their roles, revamping organizations, processes and procedures is usually unpopular no matter how necessary.
I’m not sitting here going, “Poor Andy!” By all accounts (you could hear it in the conference calls) he had some difficulty understanding the market and connecting with it. It felt to me like he was a bit isolated.
But you might consider that if you’re the guy who has to try and jerk an under-capitalized, struggling company back to reality you may not be really popular if you do your job well. Sherman’s March to the Sea may have been necessary to ending the Civil War, but that doesn’t mean they speak fondly of the general in Atlanta.
I’ll go one step further. Just maybe it was his job, or the job of anybody in a similar situation, to do the nasty, dirty, evil stuff that had to be done and then move on. Not that he expected that outcome, and he clearly didn’t get a gold watch and told “job well done” as he rode off into the sunset, but it wouldn’t be the first time a hired gun in a turnaround did the tough stuff and left.
I can hear Bob McKnight saying, “You know, that Andy guy was kind of a lot of trouble and didn’t quite ‘get it,’ but he did some good things. As long as they’re done, we might as well keep them.”
At least I hope he’s saying that. And now back to finding that sales growth.