The International Turnaround Guru: Jim Martin on How to Save Your Business

0:02Jim Martin:So welcome back to Brave Bold Brilliant. I am Jeanette Linfoot and I am your host here today. And not only that, but my background of 30 years in business as an entrepreneur, an investor, a corporate CEO. You know, over the past 30 years, I really have led multi-billion pound businesses, scaled ventures across the globe. and now through my work at Brave Bold Brilliant and Jeanette Linford Associates, I help leaders and entrepreneurs unlock growth, embrace those bold strategies and achieve success that they truly deserve. So if you're looking to grow, get to the next stage, this podcast is all about bringing you those lessons and it's through conversations with extraordinary people who faced adversity, reinvented themselves, built remarkable lives and businesses.

0:55So today I am joined by Jim Martin, James Martin if we were telling him off like his mother, one of the world's leading turnaround experts. And, you know, Jim is the founder and managing partner of ACM Capital Partners. And Jim has restructured over$1.4 billion in debt and restored more than a billion dollars in value, advising hundreds of companies across industries like aviation, trucking, manufacturing, food service. You know, and his career has taken him from scaling Burger King and Domino's in Poland to stepping in as CEO or CRO to rescue distressed companies in the US and beyond. So before we begin, if you're enjoying Brave Bold Brilliant, make sure you hit that subscribe button and leave us a review.

1:45It really does help us continue bringing you world class conversations like this one, but also allows us to reach more people so we can help more people. Welcome to Brave Bold Brilliant. Jim Martin, all the way from across the pond in lovely USA. How are you?

2:06Jim Martin:I'm doing well. How are you? I am excellent. I've been looking forward to this all morning, Jim. So I'm really going to be fascinated by what you're working on and all the businesses that you've helped over the years. because we have a little bit in common over in terms of sort of restructuring businesses, turning around businesses. And I know that's an area of great expertise for you. So, yeah, we're going to have a really, really rich conversation, Jim. I can't wait. It's going to be great. I look forward to it. Amazing. Now, Jim, you are known as the International Turnaround Guru. That is quite a title.

2:44I like it.

2:47Jim Martin:Well, it's brought me across multiple continents in over the last 35, 40 years. So perhaps a little bit of his earned. Excellent. Well, yeah, we're going to talk about that because you're over in the States. But as you say, it's the international businesses that you've helped. And, you know, what I'm really fascinated about, Jim, is, you know, you've obviously got a passion for what you do. You've been in the industry a long time. You've helped hundreds of companies. you've restored gosh over billion dollars in value to organizations but what drives that passion that you have specifically for helping companies which are maybe in distress and in need of turnaround where does that passion come from sure i think for my it for my career it started um early on where uh there were a lot of jobs at stake and there was a company that um we ultimately had to take into bankruptcy.

3:43Jim Martin:And this was early in my career. And this company was 150 year old company in a lot of company in 50 minutes from where I am right now. Just incidentally. But that company had 1800 employees. And we ended up having to lay off 1700. So we effectively had to gut the company and then sell the remaining assets to a competitor. And that experience has driven me more than any other experience to do everything I can to preserve jobs and to help grow the employee base back. Yeah. And listen, this is it. Because business isn't easy. And I mean, you know, you and I have both been around the block, shall we say, when it comes to businesses at different stages of growth.

4:44But of course, what, you know, in my experience, what it takes to start a business is different to what it takes to scale a business is then very different again to having longevity. And then maybe ultimately when we're exiting or we're sort of rejuvenating a brand, all those different life cycles that we go through as a business, that they are different, aren't they? And, you know, it's heartbreaking, I think, when you see a business that has been around for a long time, maybe done very well up to a certain point. And then all of a sudden that formula is not working anymore. Something has shifted.

5:17And so I think you're absolutely right. That sort of purpose led around protecting jobs, creating value is a really a great place to come from. And Jim, when you start working with a business, because you are the partner at ACM, a managing partner at ACM. So, you know, you're quite a large organization. You niche down into sort of more mid-size organizations, don't you, rather than the huge, huge conglomerates. But when you're working with a business, when they come to you, either they're in need of maybe a finance restructuring, Maybe they've got lots of debt that needs sorting out or they're in real distress.

5:55And it's a case of, well, we might be, you know, going bankrupt if we don't do something. What's the sort of approach that you tend to take, Jim, with you and your colleagues when you when you're starting out on that journey of helping the business? How do you how do you go about it? What do you approach it? Sure.

6:12Jim Martin:Great question. I think for me, when we step into a situation, you want to look from outside in. So are we in an industry that is, you know, are we in the copier business, right? Are we in an industry that is absolutely dying and therefore we have to find other solutions that perhaps management is not even thinking about? Management is so myopic and have been for many, many years, and so they can't get out of their own way because of that. And so for me, I like to start from outside and then look in to determine whether or not the business has a future. So I can give you a couple of cases in point.

7:07Jim Martin:One was a business that was doing safes and vaults and things like that. Well, and it was a very large business, but, you know, then they they they migrated to drive in machinery and and and repairs and things, but they didn't do it fast enough. So they were behind their competitors. And then what made it worse for them was Y2K came in. And in their case, they did a poor job of integrating new software in anticipation of Y2K. So that idea of a company that has an outdated business model then is working towards a common challenge for all companies, which was Y2K. Now, all of a sudden you lay that in and the company is in really deep trouble.

8:12Right.

8:13Jim Martin:So, again, for me, I always look outward first to figure out whether or not we have a business to save. Yeah, it's a great perspective. And it's interesting as you were talking, I was thinking, oh my God, Y2K. I remember those years in the travel industry and like, oh my gosh, it's all going to end and all the huge, huge armies of project teams working on Y2K. It seems like a distant memory now, but at the time it was a big deal, wasn't it? Very big deal. Very big deal. Yeah. And in this particular case, as I said, this company had They were doing drive-ins and ATM machines and the like. And they had teams all over the country doing installations, repair, upgrades, etc.

9:02Jim Martin:Well, because of Y2K, because of their failure to integrate new software, the people out in the field were tasked with invoicing on the spot in handwritten invoices. Can you imagine? And so they're issuing all these handwritten invoices to these various banks around the country. And what happened was that the main office was also doing invoicing. And so by the time we got there, we realized that they had double invoiced millions upon millions of dollars. So at the risk of getting too deep here. But but what happened then was the lender was advancing on all of those invoices. So I had the, you know, an enviable job of telling the lender you're over advanced by 15 million dollars.

9:58Jim Martin:You don't have the collateral you think you have, right? And so all of that goes back to Y2K. It goes back to an industry that was dated and needed to be rejuvenated, if you will. So, you know, it's kind of a self-fulfilling prophecy for some of these companies that find themselves in that position. Yeah. And I mean, listen, we're talking about tech, right? We're talking about tech of 20 years ago, but look at how fast paced tech is today. AI, you know, is disrupting pretty much every sector. And you either embrace that and say, OK, well, how can I lean into it to make my business more efficient, go further, faster?

10:44It's not necessarily about taking costs out. It could be about, you know, diverting resources into more, you know, other customer facing roles where the human touch can really add value or increase, you know, the price of the service, etc. But what are you seeing at the moment, Jim, with sort of tech disruption, you know, whether it's AI or other things at the moment with the businesses that you're working with at the moment? Is it an opportunity or is it a threat? How are most businesses looking at it, do you think?

11:11Jim Martin:Well, I think we're still, you know, at the risk of sounding old fashioned, I think we're still at the infancy of AI, right? And I think a lot of companies, particularly companies in the lower middle market, don't quite know what to do with AI and don't quite know what to do with the tiger tail, so to speak. And do I embrace it? What can we do with this? And I think there's also, as you know, a lot of misconceptions about AI and the dangers of AI, if you will, which I think some of that is founded. But at the same time, you know, I think people are acting out in fear just because of the unknown.

11:57It's interesting. I think I was listening to there's a great show over here, a business show in the morning on the radio, on Radio 5 Live called Wake Up to Money. And it's on at 5 a.m. So it's for all the early people that are heading to the city or whatever. And I'm crazy. I'm up early. Right. So so I often listen to this, but you can get it on a podcast. but I think there was something the other day and it was saying, I think it was 50 % of jobs that exist today did not exist eight years ago. And this isn't just about AI. This is just about, you know, evolution, business improvement changes.

12:31So it's an interesting lens, isn't it? The glass is either half full or half empty when it comes to these situations. But when you're working with a business, I am assuming that some of the businesses you help, Jim, are founder-led businesses. that have started and they've scaled okay that's right great so so how do you because business you know people say oh business is just business it's not personal I personally think that's bs right because it's always personal and it's about relationships and you know whether it's a relationship with your customer with your team with your client whatever so so I don't believe that at all as a saying I think it's rubbish um but when you're working with a founder that has you know they they started their business it's their baby they've grown it maybe they've got into some challenges and they need your help now or they all do you just want to grow and catalyst it's not just about risk of going bankrupt is it how do you support the more emotional side of working with a founder and not just the numbers and the strategy and all the you know the finance side of things but you know getting them in the right headspace to be able to deal with change and take take on you know the reality of their situation because I think a lot of it is around the trust and the relationship with the founder that you must build no it is and um it typically

13:55Jim Martin:my relationship with the founder is solid it's the relationship with the founder's children that's not solid got you so that is where i have come across challenges and in in some cases where the business has absolutely failed because the founder brought their their their son in let's say um and had all the faith in the world in that in the son um and you know it's a fine line for someone like me from the outside saying, are you really sure you want to do this? Right. Because I just don't think he's up to the to the task. And in one case, the company went bankrupt. They were doing exceptionally well.

14:45Jim Martin:And I'll never forget it going into 2017 and looking at the numbers. I was on the on the phone with with the founder, his son, the president of the company and some others, and I just blurted out, what are you guys doing? What are you doing? I mean, you had a great business model, and now you've pivoted to an area that you have no business being in. Well, that was the brainchild of the sun, right? So not only did I insult the sun on this board call, but it illuminated a challenge that, candidly, was never addressed properly. And so the business went out three years later. It was gone. So, you know, in that case, it's so important for there to be a solid transition plan from one generation to the next and a solid transition plan that may include outside parties in addition to the family, if that makes sense to you.

15:55Jim Martin:100%. I mean, you know, I've done lots of mergers and acquisitions myself over the years, and some of those, you know, mainly in the travel, leisure, hospitality sector, but very often they have been founder-led businesses that then have maybe we've acquired as a corporate, you know, to bring them in and taken us almost like a buy and build approach or, you know, a portfolio approach. And it is, it's a tricky balance, isn't it? Between having, you know, the DNA, if you like, of the founding family, but at the same time, when you bring in external talent to kind of get that balance right, because the friction can exist sometimes.

16:30And it's not an easy path to tread. So you're a diplomat as well, Jim. You're a politician.

16:36Jim Martin:You have to be. A diplomat, a counsellor, therapist, strategist, all of that. Yes, you do. You have to be. You know, my hometown is Miami. So it's really interesting when you get into the idea of founders and startup businesses and the like, because we had a predominantly Cuban population, right, when I was growing up. and that first generation was just amazing when they came over. They would do anything to succeed and they would do anything to help their kids succeed. So they would put their kids in private schools and they would be sweeping floors at night, right, to make sure that happened.

17:27And many of those people started businesses and became incredibly successful.

17:34Jim Martin:Well, the kids that went to those private schools and those kids that had what the parents didn't have didn't necessarily have the same work ethic, right? Didn't have the same drive. And so you saw a disconnect upon the transition to that second generation. So we can go on and on about, you know, different different parts of the world where you have that type of situation. But it's it is one of the most interesting areas to explore when you when you look at founding business. And by the way, when I say founding businesses, I mean, I'm talking two, three, four, five hundred million dollar companies that have really done exceptionally well.

18:21Jim Martin:I could name five public companies to you that were all Cuban. They began as small companies. And Masatech is one, which is a big public company, George Masconosa, huge, huge company. And that started in the early 60s. Now, it was public and it didn't have that, call it second, third generation challenge perhaps. But the point being that that you can't you can't replicate the drive of a first generation immigrant, I don't think. Right. Very easily. It's it's it's it's challenging. And and so that's been one of my challenges over the years is is to help guide that that process. Yeah. So, so, you know, I mean, regardless of sort of nationality and culture, because obviously I'm speaking to you from over in the UK, but I've done business internationally.

19:28You're in the States and you do business internationally. What, what would, what advice would you give to, to a founder that is looking either to pass it on to the next generation or to exit? because again i i think you do exits as well don't you jim as well as a turnaround you know you're kind of at all those different phases of a business life cycle as we were talking about because i often find uh with some of the businesses that i advise as well is that you know almost it should be the happiest day you know the founders that you know they finally sold it they've got the big paycheck the money's gone in the bank it's been the lead up to this and then they're like what do i do now and it can often be the worst thing actually because maybe they've not prepared you know emotionally they haven't they've lost their purpose all of a sudden they're a bit sort of out there in the dark not knowing what to do so so when you work with a with a founder that's looking to exit how do you what advice would you give to someone that's in that position today and maybe they don't want to exit tomorrow they might want to exit it in five, 10 years time, but how can you have a successful exit when you're a founder, do you think?

20:43So you enjoy the fruits of your labor, but you also are ready, you know, you're ready to go on to whatever might be next in your life. What advice would you give to a founder to prepare for an exit?

20:54Jim Martin:That's a great question. I mean, there's so many areas that you would hope to be able to touch on for them and with them. I will tell you, interestingly, I have said more on multiple occasions to founders who are successfully exiting, don't lose your passion. Don't lose your passion. If you think you're going to go from this type of hard work and drive and then go out and start playing golf, right, you're kidding yourself because you don't have that personality. Now, obviously, many have done that and they've done it successfully. But, you know, passion doesn't necessarily mean that you have to go start a new business.

21:43Jim Martin:But I think passion also means what can you do to help your fellow man? What can you do to create, you know, nonprofits that will benefit, that, you know, those that are less fortunate than you around your area, your community, etc., don't lose your passion. And that is something I think many, many fail to heed, if you will. I think you're right. And it comes back to purpose, I think, doesn't it? Passion, purpose, reason to get out of bed in the morning. I think everyone needs a purpose. And even if you're not a founder and, you know, you've had a career and you've been in a job, whatever level of an organization that is right you hear it so often that you know they retire someone retires and then like they bloody drop down dead in a couple of years you know and it's really high i know don't be slightly slightly dramatic but it's and i think it is because they're lost they don't have a purpose they don't know what's next even if you're in your 80s or your 90s and also right in 80s and 90s i mean well i mean 80s certainly i mean i see people that are incredibly successful that have transitioned to again non-profits what have you in their 80s and they're and they're they're doing quite well um so you're right it is it's it's that lack of purpose right that that will cause you to see the other side so to speak yeah yeah yeah absolutely and obviously Jim you know reading through or you know a lot of the your background and kind of what you've you know the sectors you've worked on you've worked in such a range of different sectors aviation fast food medical devices you know a lot of different sectors there so if you look at say a turnaround in different sectors let's just take aviation versus manufacturing for example is it the same or is it the principles are the same but what what are some of the big differences say when you're between different sectors when you're looking at turnaround um no it's a great question.

23:46Jim Martin:Again, when we talked early about looking from outside to inside, aviation, you mentioned, well, in my case, aviation, I stepped in right after 9-11, right? So I stepped into a company that was very successful. And September 12th of 2001, the revenue dropped more than half overnight because they couldn't work on specific aircraft because those specific aircraft were parked for good because of the fuel consumption that they had. So all of a sudden, you're looking around and I'm looking around and I've got 900 mechanics that can no longer service aircraft, right? And so in that case, what are you looking at?

24:37Jim Martin:Well, you're looking at, you have to downsize and you have to downsize quickly. And then you also are looking at a business because let's face it, and particularly back in, you know, call it a couple of decades ago, you always had a leveraged balance sheet, right? And you always relied on strong cash flow to support that leverage. Well, this company was no different. They had a highly levered balance sheet, but they had great cash flow. Well, that cash flow stopped one day to the next. And now all of a sudden you got to go out to a consortium of lenders internationally and say to them, you need to give me one, two, three years of time for this industry to turn around.

25:27Jim Martin:And that's a tough, tough question or tough demand, I would say, on lenders. So in that case, it was industry driven, you know, a catastrophic event within the industry. In the case of the fast food, it was, candidly, it was just an inexperienced group of entrepreneurs that wanted to plant the American flag over in Eastern Europe and call it a day saying, okay, I've got the brand here, so I'm done, right? Well, obviously, that's not the case. And obviously, you know, you now have to source product that in America you're sourcing from another state. Now you're sourcing from Denmark or you're sourcing from Germany or you're sourcing from elsewhere on the continent.

26:19Jim Martin:And oh, by the way, you're doing so with multiple currencies. There was no euro at the time. So therein lies a whole set of different challenges. Right. And so it's not industry specific. in that case, right? But it's really geographical and where you are politically in the world, because we're talking 1993, four years after the wall fell. So, you know, so it provided a whole different set of challenges than what the aviation company had. so if you're enjoying this conversation with Jim Martin now is the perfect time to hit subscribe to Brave Bold Brilliant and every week I bring you stories strategies and insights from leaders who have faced challenges head-on and created incredible results and by subscribing you'll not only stay inspired but you'll also gain the tools to scale your business and your career unlock new opportunities and of course live life on your terms so don't miss out join our community of ambitious leaders today

27:38yeah there's huge huge variety in what you've done over over all these many years isn't there and um have you still got the same passion for everything jim you you still seem very energetic and kind of loving what you do. But, you know, how do you keep yourself, like, you know, energized and purpose-led and focused? What is it that makes you get out of bed in the morning?

28:01Jim Martin:Well, I mean, I still have a teenage daughter. So if nothing else, that energizes me. But in all candor, I just, again, it goes back to passion. It goes back to, you know, wanting to wake up every morning and go and do something positive for the people around you, for the businesses around you. They're relying on you. They are looking to you as the answer. And it's a big responsibility not to let those people down. what's the most difficult difficult deal you've worked on jim into or organization that you've helped that maybe didn't go the way you wanted or it was more you is more emotionally connected or you know what what's what's been the most difficult sort of thing you've worked on over these years would you say yeah it's a great question um i uh i was in the um i was in the the juvenile business where we were providing healthcare, or excuse me, we were providing care 24-7 to kids that had been, had gotten in trouble with the law, but they were adolescents.

29:16Jim Martin:And so we, we provided care to, to those kids across a particular state. And, and so we, We were successful because the business was in real trouble right after COVID. If you can imagine, I mean, COVID, I mean, the kids were, they couldn't go outside. These are teenagers. And so, I mean, it was just really an unruly situation. And we're talking, you know, at the time we had 400 kids in three different states. And 750 employees. Well, so the most difficult and the saddest part of that situation was the state, in one particular state, the secretary of the department started to make decisions that were not the right decisions for the business, for the kids.

30:28Jim Martin:and for the industry. And it was a very unilateral series of decisions that all the people around him were afraid to challenge him on. And unfortunately, it caused us to bleed cash because all of a sudden we were effectively made to provide better services at a fixed contract cost, right with much higher wages much higher workers comp much higher food costs um and and the business never never really rebounded um so so that was the most difficult because it was it was um i would say it's it was ego driven but by this particular this particular professional um wanted to do it his way and didn't really see the ramifications despite, you know, one-on-one meetings that I had with him, you know, but he was at first an educator and not at all a businessman.