Guest Post

What would you do when the bank says, “we’re freezing all your accounts?” Tell the truth.

by John Dame

I work intimately with CEOs. My consulting practice and my work as a Vistage Chair brings me "up close and personal" with over 30 CEOs every month. Since September 2008, when the economy changed forever how CEOs run their companies, I have had the good fortune to see how real leaders with extraordinary insight and nerve have met the daily challenges of the new economic reality.

Early in 2009 "Jeff" scheduled a meeting with his bank. 2008 had been a tough year. His company, already undercapitalized, had lost $250K. 2009 was shaping up as a better year, possibly break-even, but to continue to operate he had to extend his credit line with a local bank. Financially astute and enjoying a good relationship with his bank, Jeff met with his relationship manager and the regional executive in charge of lending. Jeff thought the meeting went well. The bank would get back to him in a day or two. The answer was unexpected. The local bank, long an ally, had frozen all his accounts. Jeff had broken his covenants, and the bank wanted more than just a "good story."

For Jeff there was no decision to make. His life-long dream was to own and operate his own company. He needed instant, decisive action. Without access to funds, he could not pay his employees or vendors. His company was on the brink of disaster. Jeff decided that the only possible solution was to address directly issues of trust and performance that were causing the bank to take such strong action. Jeff went back to the bank with his vision and a new financial transparency based on reality…not some sugar coated projections to "look good."

Today, Jeff is still fighting every day to make his company profitable. The economic realities of the marketplace have not changed, but the bank believes Jeff will make it. They extended his credit line for another year. Having the nerve to be honest in spite of the possible negative outcome classifies Jeff as a real leader.

John Dame, of Dame Management Strategies, works with CEOs and their senior management teams to help them become better leaders, make better decisions and produce better results.

  1. John – I’m a Vistage member and I’ve been hearing this story all year from my peers. It’s been a rough year for everyone and I love to hear/read stories of other CEOs who are finding their nerve to change the status quo and thrive in a down economy.

    Comment by Gini Dietrich — 11/08/2009 @ 3:39 PM

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