When Tim Wakefield made the American League All-Star team in 2009, it marked the first All-Star appearance for the veteran pitcher famous for throwing a knuckleball. Although Wakefield’s statistics before the All-Star break were deserving, an argument could be made that he also was being rewarded for his long and storied career with the Boston Red Sox. Wakefield was in his age-42 season at that point and would retire just two years later.
Carl Lane may not be that close to retirement, but the managing director of Willow Tree Consulting Group and recent winner of the Turnaround Management Association’s award for Outstanding Individual Contribution might be in a similar position compared with where Wakefield was in 2009.
“I’m a little worried that it was a hint that my career is on the downswing, but I was extremely proud of receiving both the TMA Global and the Chicago/Midwest Chapter outstanding achievement awards in 2019,” Lane says.
Lane is a veteran of the turnaround community and of the TMA itself. He began as a committee volunteer and rose to become president of the Chicago/Midwest chapter and a member of TMA Global’s executive committee. Lane’s dedication to the industry stems from his passion for the turnaround process itself.
“I enjoy the combination of technical analysis and negotiated business solutions,” Lane says. “I also appreciate working with all the really smart people in the turnaround industry as you are constantly challenged to be at your best and can learn from their experiences.”
One pillar of Lane’s approach to turnaround is gaining a client an “early win.” This can build support early on and build momentum for the overall process right away. He also advises turnaround professionals to focus on relationships.
“I try to carve time out to meet individually with senior management to build deeper relationships,” Lane says. “Ultimately, better relationships result in better communication and more thoughtful solutions.”
These building blocks are at the core of Willow Tree Consulting Group, which Lane founded nine years ago, even if he can still remember designing the company’s logo and preparing for launch like it was yesterday. Lane designed Willow Tree’s initial business plan around serving smaller companies that might not appeal to larger-scale turnaround firms.
“Willow Tree’s strength is the niche it serves — bringing ‘tier 1’ experience to middle-market companies with more complex issues or other unique situations,” Lane says. “While all turnarounds and restructurings are challenging, there are a subset of situations that are too small for the large teams from large consulting firms but still need a few professionals with the deep experience from working on large complex projects.”
However, over the course of nearly a decade in business, Willow Tree’s reach has expanded, particularly through opportunities to serve in independent director positions for distressed companies.
Built for This
Lane’s career parallels Wakefield’s at the beginning as well. Wakefield was originally drafted to play the infield for the Pittsburgh Pirates. He couldn’t hit well enough to stick at the position but started experimenting with a knuckleball pitch and made his way to the mound where he built a 19-year MLB career.
As for Lane, he came out of business school and began his career at Ernst & Young. While working in the litigation consulting practice, he drew the attention of the reorganization services practice where his skill set seemed like a better fit.
“I was working in the litigation consulting practice at Ernst & Young and was considered to be a bit too strong minded by one of the partners,” Lane says. “The partners in the reorganization services practice thought that my personality was better suited for their practice and asked me to work on one of their projects and I never looked back.”
Lane parlayed his success with Ernst & Young into a position in corporate finance, but that wasn’t the right fit either.
“While my corporate position provided me with management experience, it lacked the challenges of consulting and the excitement of learning about a different company or industry with every new project,” Lane says.
With his sights set on returning to those challenges, Lane took a position at Deloitte Financial Advisory Services where his career in turnaround management really took flight. Lane led the reorganization services group in the Midwest and eventually became a partner at the firm. At Deloitte, Lane benefited from what he calls “an outstanding learning culture.” In addition, the company’s focus on cross-selling and risk management made a serious impression that has stuck with Lane to this day.
“As I advanced from manager to partner while at Deloitte, I realized the benefits of continuous learning and the progression from technical skills to people skills,” Lane says. “The cross-selling environment taught me how to combine multiple skills and varied experiences to solve more complex issues. While the risk management processes at Deloitte could be perceived as overly burdensome, they did instill a strong risk management mindset that is extremely helpful on the boards of directors I sit on.”
Despite the important lessons he learned at Deloitte, Lane eventually moved on, citing limited engagement opportunities due to the independence requirements of the firm, which were only heightened when the Sarbanes-Oxley Act was passed in 2002.
As he sought new opportunities, Lane made his way to AlixPartners, where he took a managing director role. Lane says the most important experience he gained at AlixPartners came when he was given chances to serve as a chief restructuring officer or in other interim roles.
“While the actual difference between what I call a ‘heavy handed consultant’ and a CRO may be small, the perception is large,” Lane says. “One aspect of being an officer that can impact your effectiveness is the cooperation of other senior leaders who may feel threatened by a CRO. This issue reinforced the importance of building a strong relationship with the other officers.”
An entrepreneur at heart, Lane’s time with AlixPartners was always finite, and when the landscape appeared steady enough in 2011, he opened Willow Tree Consulting Group. As the managing director, Lane guides the company using the principles he gained at Ernst & Young, Deloitte and Alix Partners as well as those he has developed himself. Once again, one of the most important is emphasizing relationships.
“There were many relationships that I built while at Deloitte and AlixPartners, and even E&Y, that never generated any work while at those firms but did while at Willow Tree,” Lane says. “As the return on investment may take some time, you really have to enjoy business development and marketing, so figure out what you enjoy and go with it.”
COVID-19 and the Future of Turnaround Management
Relationships are particularly important right now, as Lane and the rest of the turnaround management industry contend with the COVID-19 pandemic. The virus has created excessive disruption across the world and the turnaround management community is not immune. The speed of such developments will play a large role in how turnaround companies attempt to help struggling businesses.
“The COVID-19 pandemic is so rapidly impacting companies and the downturn is so dramatic, that well performing companies moved into crisis management mode within just a few weeks or even days,” Lane says. “Given the rapid and dramatic downturn, many companies will not survive, and many other companies will be severely financially impaired and take years to recover. As with the healthcare industry, the turnaround industry will likely be pushed to its limits in dealing with the impact of the COVID-19 pandemic.”
The pandemic is now the primary culprit for distress, but trade wars and Brexit already had created an environment where companies needed turnaround and restructuring services. However, Lane says that those factors were felt more in the subsectors of industries, whereas COVID-19 has had more far-reaching effects. Despite this, Lane expects the turnaround industry to make it through the current crisis and remain consistent over the long term, particularly if the lessons from recent economic slowdowns stick.
“The key to success will continue to be staying busy during good economic times and responding rapidly when the economy turns downward,” Lane says. “Based on the nature of [the] last two downturns, the ability to rapidly respond will likely be the key to success.”