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The real tests of managers!

Bob Voorhees was the President of market leading golf course accessories  manufacturer Standard Golf when I had dinner with him  one evening in the late 1970's.  He made the statement that you get to be a real manager "when you lie awake all night wondering how you are going to make payroll the next day."  It was not too many years later that I had the opportunity to know the real meaning of what Bob said.



When times are tough, you find out if you are a good manager.   But too often, in this day of ever more highly regulated banking, with just the least little slip, a loan may be terminated (if you can get a loan in the first place).  Banks and managers never find out who can manage.  It has been more than 25 years since I was faced with such a crisis, but I still remember it well.  I was "working" a trade show at the Marriott Hotel on Michigan Avenue (the "Miracle Mile") in Chicago, when I called my office to check in.  This was long before cell phones.  Sometimes you had a phone booth, but often you were at a bank of phones with four to a dozen or more people able to hear your conversation.  I was given a message to call my bank lending officer, so I made the call as requested.  At the other end of the line was "D" who knew where I was and what I was doing.  Even so, he told me that he was "calling the loan".  I was in shock, but there was not much I could say right there.  I knew what I wanted to say, but could not, which was probably good.

We had held on until then (the late 1980's) through the struggles of the economy in general of the very early 1980's, which was followed by the even more difficult (for us) farm crisis which lasted into the mid-80's.  We had made our way back from having a negative net worth and now this guy wanted to call the loan.  I felt then, and still feel, that my management team and I had demonstrated our ability to manage in the face of a crisis, which should make us an acceptable risk, at least for that bank.  We ultimately were able to avoid having the loan called, but I have not forgotten that day.  We were not a very attractive potential customer for any other bank for a few years, but when our debt to equity ratio got down to just over 11% we left for a new bank.