Leadership - Doing The Right Thing

I was having lunch with a good friend today and our conversation broached the differences between good people and people who behave poorly. It is a well-known trait that when the environment around people degrades so does human behavior. Likewise, when a company has problems the environment declines and you see difficulties ensue. When the leaders of those companies make poor choices or simply do not "do the right thing" it affects everyone. Many employees are keen to this and feel their leaders lose integrity and credibility by letting the problems make decisions for them. In the end, poor choices lead to losing more than you know and that loss centers on respect.

I have had numerous discussions about leadership with a good friend and colleague who is the Corporate Principal Project Manager at Arkema. He has decades of experience, is tough on expectations and generous to help or advise those with problems. I agree with him about company progress - that it is all about the team. Moreover, that it is our responsibilities as leaders to set examples for others, become mentors and pass forward the the knowledge you gained.

If you are in a leadership position, I encourage you to always do the right thing and set an example. After all, our environment changes and difficulties resolve themselves, leaving you with the reputation you earned with your own actions. The best practice for enduring problematic times is teamwork. That teamwork will depend on respect and trust. This is why leaders need to choose wisely and respect everyone down to the youngest employees. Resist speaking negatively about others and seek a positive way to resolve issues. If you cause someone harm or loss, make good on it no matter what the cost. Repay the loss and learn to apologize.

In a recent administrative position I became aware of one of my direct reports being hurt by a coworker. As a concerned leader I confronted the coworker carefully and with respect alerted this person to the problem. I was so impressed by the quick apology and desire for this person to make a personal apology that I knew the problem was solved. This person earned respect in spite of the problem caused. Never underestimate the power of apology. I have learned to go out of your way to take responsibility for problems even if they are not directly caused by you. This will build your character and others' trust in you.

We will all make mistakes. I like to tell people that I try to learn from my mistakes and I plan "to do a whole lot of more learning". It is not a person's values that make them a better person - it their behavior. For a moment, reflect on how you treat others and if you are a leader to "always do the right thing". If you see a problem occurring at home, at church, a gathering or in the office and you don't think you are a leader, then, you are missing the opportunity to become one.

In parting, I leave you with one of many examples "of doing the right thing" as an inspiration:

19 year old Joey Prusak is the manager of a Dairy Queen in Minnesota.  He was working during the lunch rush when a blind man in line dropped a $20 bill on the floor.  The woman in line next to the blind man quickly picked up the $20 and put it in her purse.  Joey was shocked.  When she got to the counter to order her lunch Joey told her that she would not be served until she returned the $20 to the blind man.  She refused and Joey asked her to leave. She did so only after creating a ruckus.

Not done with being a good person, Joey gave the blind man $20 out of his own pocket.  Equal to two hours of his gross pay.

Now watch the video. Pilot Out.

http://www.youtube.com/watch?feature=player_embedded&v=xQwF3KtXxXA

ENGlobal Corporation: 3Q 2013 Results

HOUSTON, Nov 08, 2013 (GLOBE NEWSWIRE via COMTEX) -- ENGlobal, a leading provider of energy-related engineering and automation services, announced today its financial results for the third quarter ended September 28, 2013.

Third Quarter 2013 Highlights Compared to Third Quarter 2012:

• Breakeven earnings per share, an improvement from a loss per share of $0.83 
• Revenue of $43.3 million, a decrease of 24.7%
• Gross profit margin of 12.0%, an increase from 5.7%
• Overall SG&A decreased from $7.1 million to $5.2 million
• Reduced bank debt from $29.4 million to $1.1 million

ENGlobal reported a net loss of approximately $50 thousand, or $(0.00) per share, from both continuing and discontinued operations for the quarter ended September 28, 2013. This compares to a net loss of approximately $22.3 million, or $(0.83) per share, and a net loss from continuing operations of approximately $18.7 million, or $(0.67) per share, for the quarter ended September 29, 2012. Third quarter 2013 revenues decreased to $43.3 million, 24.7% lower than the $57.5 million for the third quarter of 2012, primarily due to the sale of the Gulf Coast Engineering and In-Plant operations on August 30, 2013.

"ENGlobal has come a long way in fundamentally reshaping its Business over a relatively short period of time," said William A. Coskey, P.E., Founder and Chief Executive Officer of ENGlobal. "ENGlobal's management team has been almost completely reorganized, a move which has proven to be effective in terms of improving margins and reducing expenses. In addition, the Company has sold or discontinued four non-strategic businesses since my return as CEO."

Mr. Coskey, continued. "Through these and other measures, we've been able to significantly reduce dependence on our working capital credit facility and have now returned to being in full compliance with its covenants required by our facility. These actions of divesting certain assets have been important to ENGlobal - both in terms of financial liquidity and for our higher value engineering and automation focus going forward."

The Company's gross profit margin as a percentage of revenue increased to 12.0% in the three months ended September 28, 2013 as compared to 7.1% for the prior year period. The primary reason for this increase is the implementation of our profit improvement plan, which reduced the risk profile of our project mix, reduced variable costs, and improved efficiencies in the Automation segment.

The amount outstanding under the Company's credit facility was $26.8 million at December 29, 2012, $1.1 million at September 28, 2013 and $567 thousand at November 8, 2013. These decreases were primarily due to the release of restricted cash related to the expiration of the Company's Ex-Im Letter of Credit Facility and the liquidation of the working capital of its divested business units.

The following table illustrates the composition of the Company's revenue and profitability, inclusive of discontinued operations, for the three months ended September 28, 2013 and September 29, 2012, respectively (click on link for article and table):

http://www.englobal.com/profiles/investor/ResLibraryView.asp?ResLibraryID=66293&BzID=702&Nav=0&LangID=1&s=0&Category=64


Overall, selling, general and administrative ("SG&A") expenses decreased $3.5 million, or 40.2%, from $8.7 million in the three months in 2012 to $5.2 million for the current quarter. As a percentage of revenue, SG&A remained steady at 12.0% for the three months ended September 28, 2013 when compared to the prior period.

In the three months ended September 29, 2012, the Company recorded goodwill impairment in the amount of $17.0 million of which $14.6 million was attributable to continuing operations.

The Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 2013 will be filed with the Securities and Exchange Commission later today reflecting these results.