When one is asked their opinion on whom one considers to be the best speaker at a conference, sometimes it’s an easy choice.
[1]It wasn’t an easy choice at the Digital Signage Investor Conference in New York last week, but one of several who stood out for me, was Brian Dusho, CEO of BroadSign, who gave a solid picture of the steps that led up to BroadSign declaring Chapter 11 bankruptcy [2] and the steps it took to come out of that situation as a strong, healthy and growing company.
And, if one had to put a word on what helped save the company, it was the transparency with which the deal was handled, making sure that employees, stockholders, clients, the potential buyer or buyers, and everyone else directly involved and/or impacted was kept up to date on each move as necessary.
Referring to his first day as CEO as seeing ‘an arranged marriage, heading to divorce’, he outlined each step taken in what was a short time frame – by necessity – and the plan to execute it. To say that the company was in dire straits on day one was putting it mildly with $10 million in debt; $2.1 million in trade debt; shares in bankruptcy; 118 shareholders with no cash; 42 debtors; employees wondering where their paycheck would come, and more.
And, incredibly, while each step was taken to deal with financial institutions, staff cuts, risks, investors and more, the company continued to operate, winning deals with LG [3], JC Decaux [4], and others.
“The market didn’t know the state we were in, because we were operating,” said Dusho. “As CEO, you have to be able to keep things moving. You have to instill confidence and motivation.
“But at one point, when venture capitalists, investors, financial institutions were not interested in helping us, and with our current investors ‘getting lonely’, we knew we had to ‘cut loose or double down.’”
Much time was spent with legal counsel, cooking up a plan of reorganization. When the Chapter 11 was announced, everything had to be transparent, but everyone also had to operate strictly to script. And each employee knew only what they had to know, so that there would be no variation from the script.
“There had to be a consistent communications strategy or all would be chaos,” Dusho said.
This also meant dealing with top line clients and investors, telling them what was going on and reassuring them. In two-and-a-half weeks, Dusho traveled to eight countries to deliver a transparent message, including meeting with key media.
Then, after a quiet period of about three months (during which the company actually grew), BroadSign emerged with financing in place with one buyer, the JEDFam Group. It then had to deliver on its plan.
The result is that today, BroadSign has a clean balance sheet, 100% of its clients and is considered a solid company.
Among the lessons learned that Dusho advised any other company facing similar problems are: “You can run but you can’t hide. A sick capital structure doesn’t go away. If you can solve your problems outside without Chapter 11, do it.
“Otherwise, surround yourself with a team; communicate clear and often; have a plan in place and execute it, and embrace transparency.
“For us, transparency saved the day. Chapter 11 was our Phoenix, not our Armageddon.”