The MBA Meathead: The Business Restructuring Cycle

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elitefts™ Sunday edition

The Business Restructuring Cycle

A Different Kind of Cycle

The Holy Grail for a Wall Street analyst is a company that produces earnings he or she can predict. It is OK for a company to miss the predicted numbers, so long as it is to the upside and always by the same percentage. This makes the analyst look tough, but reasonably accurate and makes the company appear to be effortlessly outperforming expectations. Unfortunately, 99% of organizations aren't going to display such steadfastness. The process that ensues is when these expectations are not met is pathetic.

It starts when times are good. Margins are strong, growth has a positive sloping trend line and bonuses exceed target. Sales meetings are at four star hotels, Wall Street analyst gatherings are full of back patting and ball holding and all is good in the world – then it hits. Raw material prices increase just as the competition finally gets that new plant online, increasing industry capacity by 20%. Margins squeeze, profits evaporate, sales meetings are put-on-hold and that trip the CFO was taking to New York is cancelled.

Senior management then disappears for a week to an undisclosed location that costs more per night than an average employee’s weekly wage. A retreat is held to redefine strategy and re-prioritize corporate resources. They may even take a look at re-wording the good old vision or mission statements if the agenda allows.

This meeting of the minds results in decentralizing the supply chain (or centralizing it, depending on what you did after the last retreat) and streamlining corporate resource groups (which is really just a way to offer early retirement buyouts and fire people who decide not to take the early buyouts in order to claim headcount reductions that are inevitably back filled with new headcount within three years). Divisions once merged together in the name of leveraging cost structures are separated in order to be more market-focused (or vice-versa depending on what was done last time around). As a bonus, the phrase ‘customer-centric’ is somehow inserted in the vision statement that nobody in the company has ever read or knows exists.

This activity yields what the accountants refer to as 'restructuring costs,' which are marketed to analysts as one-time items and not counted when developing long-term share price models. Analysts go along with a wink in return for continuing to get those one-on-one meetings with management in the future, where real dirt might be dished in advance of informing the market (the market, by the way, is what average investors are called). The accountants are then asked to scour the financial statements and reclassify every last expense they can possibly argue with the auditors to be a restructuring costs. As you might guess, many of these costs have nothing to do with one-time restructuring and are a ruse to mask the real problem of deteriorating business fundamentals.

If management is good, they will boldly state that these complex game-changing initiatives will take three years. Coincidentally, this is also the time it will take for forecast industry demand to catch up with existing supply. After three years of one-time costs, macro factors of the industry create a more favorable environment. Margins eventually fatten again, management credits their own genius, bonuses exceed target and all is good with the world. Then the cycle begins anew like springtime on the prairie.

Training and Meet Time

The meet for which I’ve been training has come and gone since the last MBA Meathead article hit the Sunday Edition. The back half of the program is shown below. The training program was solid, I was supposedly ready, then went out and promptly bombed for the first time ever. I badly underestimated the difficulty of training alone in a garage for a geared competition and what that meant for meet planning. By straying from the program more often than I should and not taking heavy weight consistently enough leading up to it, I left myself unprepared. I opened too high, missed and blew away months of preparation.

I still have difficulty articulating why I do this – especially after the utter failure that was my last meet. Why I compete. Why I train hours on end enduring torn callouses, bloody shins, blown blood vessels, pulls, tears, strains, and near death experiences that come with moving heavy weights for zero money and sometimes significant out-of-pocket costs. I touched a bit on this in my initial article in December, but the best I can come up with is a two-part answer.

First, I enjoy lifting heavy weights and being big. When I look around at the general public, I cannot fathom how they choose to go through life at such a physical disadvantage. Weak individuals who have difficulty with simple tasks in life that involve moving things or even themselves. These are the people who spawned the rolling briefcase, the ultimate surrender of the human race. God dammit, carry your laptop from your car to your cubicle – you lazy bastard. Not to mention how their lack of self-confidence from being frail leaves them vulnerable to those who derive pleasure from acting the bully many years after high school has passed (also known as senior management).

This is not how our species was meant to evolve. We should be bigger, stronger and faster than our ancestors. Hell, a large chunk of the training population does so with a goal of being small and weak. Our society refers to as an ‘Ironman’ is an all-day activity with a slew of 130 pound men swimming, pedaling and running at a moderate pace. There is a name for animals in the wild that move in a straight line at medium speed for long periods of time – LUNCH. You ever see a Silverback gorilla run a marathon? I didn’t think so. They don’t need to.

Second, I enjoy progressing in whatever I'm doing. I don’t read fiction books because I feel they're a waste of time. If I'm going to take time to read, it's going to be something that will cram a few extra pieces of data into my head to help progress in whatever I'm interested in at the time. With respect to training, I want an independent method of measuring my progress. That is what a meet is. I couldn’t give two squirts about beating some random dude who happens to approximately weigh the same as me. Similarly, I don’t much care to hit some arbitrary number deemed by someone else to be elite or whatever. I will determine for myself what is an elite performance. I just need a reasonably credible organization to provide judges to tell me if I performed a lift properly.

Then, I will be able to judge whether my standards were met from a performance standpoint. And even though my last performance was an abject failure, I will get up, dust off and be back on the platform again.

Before someone says that they can’t understand why I would be risk my health by carrying the extra weight of a big bloated sweaty back-pump-having powerlifter, I call B.S. My health metrics check out better than 90 percent of the population and even if they didn’t, I’d rather live a higher quality life by my definition and die at 60, than be weak and live to be 100 years old.

WEEK

DAY

EXERCISE

9

DE Lower

·       Dimel Deadlifts - 44% for 8 sets 3 reps plus 2 sets 15-20 reps using no more than 275 pounds

·       GHR - 4 sets 10-12 reps (use weight)

·       Legs Raises on Bench with Chains - chains around ankles and keep your lower back flat and pressed into the bench

·       Reverse Hypers - 4 sets 8 reps as heavy as you can with loose form

DE Upper

·       DE Bench - 35% for 9 sets 3 reps (2 chains per side) - use three different grips  - <45 seconds rest

·       Dumbbell Extensions on the floor - pyramid up to 2 heavy sets of 8

·       Machine Rows - 3 sets 8 reps - heavy

·       Face Pulls - HEAVY - 3 sets 12 reps with elbows high

·       Free Time - 15 minutes

ME Lower

·       Reverse Band Squat (light band) - work up to a PM (perceived max) then drop down and do 85% for 2 sets 3 reps - Full Gear

·       Pulls Standing on 3 Mats - work up to heavy triple

·       GHR - 3 sets 15 reps

·       Reverse Hypers - 2 sets 15 strict and tight

·       Pull Down Abs  - 3 sets 8

ME Upper

·       2-Board Press with Shirt - Heavy set of 3 raw and then put your shirt on and work up

·       Vertical Pulls - heavy for 3 sets 8 reps

·       Light Side, Front and rear Delt Raises

·       Free Time – 15 minutes

10

DE Lower

·       Dimel Deadlifts  - 44% for 8 sets 3 reps - 2 sets 15-20 reps using no more than 275 pounds

·       GHR - 4 sets 6-8 (use weight)

·       Legs Raises on Bench with chains - chains around ankles and keep your lower back flat and pressed into the bench

·       Reverse Hypers - 4 sets 6 reps - as heavy as you can with loose form

DE Upper

·       DE Bench - 30% 8 sets 3 reps with Regular Band tension (100-120 lbs for a 600-700 lb BP)

·       Dumbbell Extensions on the floor - pyramid up to 2 heavy sets of 8

·       Machine Rows - 3 sets 8 reps - heavy (one rep shy of failure)

·       Face Pulls - 3 sets 12 reps with elbows high

·       Free Time – 15 minutes

ME Lower

·       Box Squat with Bands  - briefs and suit with straps down - 47% for 6 sets 2

TENSION SELECTOR:

  301-500 Pounds – Strong Band

  501-700 Pounds – Strong and Light Band

  701-900 Pounds – Strong and Average Band

  900 Plus Pounds – Strong and Strong Band

·       Pulls against bands – work up to a moderately heavy single (on a scale of 1-10 around a 6) and then do 5 sets 1 rep

·       GHR - 3 sets 15 reps

·       Reverse Hypers - 2 sets 15 strict and tight

·       Pull Down Abs - 3 sets 8

ME Upper

·       1-Board Press with Shirt - work up to a heavy set of 3 raw and then put your shirt on and work up.

·       Vertical Pulls - go heavy for 3 sets 8 reps

·       Light Side, Front and rear Delt Raises

·       * nothing real heavy (under 35 pounds). Do one or two sets of each type of raise.

·       Free Time – 15 minutes

11

DE Lower

·       Dimel Deadlifts - 2 sets 15-20 reps using no more than 275 pounds

·       GHR - 2 sets 20-25 reps

·       Hanging Leg Raise - 50 total reps

·       Reverse Hypers - 4 sets 6 reps - as heavy as you can with loose form

DE Upper

·       DE Bench - 20% 6 sets 3 reps with Circa – Maximal Band tension - 135 + 200 pounds of band tension at the top of the lift

·       Barbell Extensions - pyramid up to 2 heavy sets of 10

·       Machine Rows - 3 sets 8 reps - heavy

·       Face Pulls - HEAVY - 3 sets 12 reps with elbows high

·       Free Time - 15 minutes

ME Lower

·       Box Squat with Bands - 701-900 Pounds - Strong and Average Band - briefs and suit with straps down - 51% for 5 sets 2 then work up to a heavy double with the bands still on

·       Pulls against bands - moderately heavy single (on a scale of 1-10 around a 6) and then do 5 sets 1 rep

·       GHR - Work up to 2 heavy sets of 5 reps using a heavy med ball

·       Reverse Hypers - 2 sets 15 strict and tight

·       Pull Down Abs - 3 sets 8

ME Upper

·       Shirt Work - use the same weight you did last week on one board but touch it for a single off your chest

·       Vertical Pulls - heavy for 3 sets 8 reps

·       Light Side, Front and rear Delt Raises

·       Free Time – 15 minutes

12

DE Lower

·       Dimel Deadlifts - 3 sets 15-20 reps using no more than 275 pounds

·       GHR - 4 sets 8-10 reps

·       Hanging Leg Raise - 50 total reps

·       Reverse Hypers - 3 sets 15 reps

DE Upper

·       DE Bench - 30% 6 sets 3 reps with Circa – Maximal Band tension

·       Barbell Extensions - pyramid up to 2 heavy sets of 8

·       Machine Rows - same machine as last week - 4 sets 12 reps - heavy (one rep shy of failure)

·       Face Pulls - light – 2 sets 30 reps with elbows high

ME Lower

·       Box Squat with Bands - briefs and suit with straps down - 53% for 5 sets 2 - after these sets increase box height 2 inches, put straps up and work up to a heavy double

·       Pulls against bands - moderately heavy single (on a scale of 1-10 around a 6) and then do 5 sets 1 rep

·       GHR - work up to 2 heavy sets of 5 reps using a heavy med ball

·       Reverse Hypers - 2 sets 15 strict and tight

·       Pull Down Abs - 3 sets 8

ME Upper

·       Shirt Work - work up to max double off three boards

·       Vertical Pulls - heavy for 3 sets 8 reps

·       Light Side, Front and rear Delt Raises

13

DE Lower

·       GHR - 4 sets 8-10 reps (these should be to failure)

·       Hanging Leg Raise - 50 total reps

·       Reverse Hypers - 2 sets 15 reps

DE Upper

·       Light Tricep and Lat work - nothing hard at all

ME Lower

·       Squats with Full Gear - work up using triples until it feels heavy then jump one more time for a single

·       Deadlifts - 2 sets of 1 with the weight you want to open with at the meet

·       GHR - work up to 2 heavy sets of 5 reps using a heavy med ball

ME Upper

·       Shirt Work - work up to max single off two boards

·       Vertical Pulls - heavy for 3 sets 8 reps

14

DE Lower

·       GHR - 6 sets 6  reps (these should be to failure)

·       Hanging Leg Raise - 50 total reps

·       Reverse Hypers - 4 sets 8 reps

DE Upper

·       Light Tricep and Lat work - nothing hard at all

ME Lower

·       Squats - Full Gear - work up to a feel good weight with straps up and wraps - this should be around 70-80% - 2 or 3 sets of 1 rep.

·       Deadlifts - no more than 315 for 5 sets of 1

·       GHR - work up to 2 heavy sets of 5 reps using a heavy med ball

·       Reverse Hypers - 2 sets 15 strict and tight

·       Pull Down Abs - 3 sets 8

ME Upper

·       Shirt Work - if you don't have your shirt dialed in you will need to do shirt work to your chest - if you are good with your shirts than use 40% of your best bench with 2 chains per side and do 4 sets of 3 reps

·       Hit the triceps hard and call it a day

15

Meet Week

·       Stretching, foam rolling and weight cut

Looking Ahead

I need to work for a few months on conditioning and tons of accessory work to bring up weaknesses. Luckily for me, there are plenty of weaknesses to bring up right now...kind of like low hanging fruit. Then, I will pick a meet and outline a training cycle that is more garage-friendly and includes more trips to the elitefts™ compound. As always, I welcome any suggestions on what to cover in the next MBA Meathead edition.

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