Turning physics into a successful career in turnarounds

Brian Kushner has made a career of getting companies out of hot water. After earning his bachelor’s, master’s, and PhD degrees in applied and engineering physics at Cornell University, he got a job with a systems integration and defense consulting company. Pretty soon he was helping solve technical and project problems, and within a few years he was turning around companies full-time.

In late 2001 Kushner and two partners founded a consulting company, CXO LLC. “We were going into companies and serving as the interim CEO, CRO, CFO, COO, CTO, CIO, etc., so we decided to replace the middle initial with an X,” he says. In 2008 CXO was acquired by FTI Consulting, which has about 4200 employees worldwide. Kushner stayed on as a senior managing director in the company’s corporate finance segment. He now co-leads technology, aerospace, defense, and government contracting there.

Kushner originally went into physics, he says, “because it was easy and I enjoyed it.” He chose applied physics because he was “a bit of a tinkerer and because I had heard it was the hardest major at the university, so I figured it would be something meaty to tackle.” Was being a turnaround expert his intended career path? “Not even close!” he says. “It’s light-years away from what I expected to be doing.” In between his frequent flights and conference calls, Kushner gave Physics Today a glimpse of his life as a turnaround guy.

PT Describe your career path.

KUSHNER: In graduate school, I realized I was not going to become an award-winning physicist. I was a better Tom Sawyer than I was an Albert Einstein. I found that I could organize people and get them to do things and work collaboratively. I found I was better as a leader of projects and teams than I was as a creator of new advances in physics. When I got out of graduate school, I went to work for BDM, a defense contractor. I had done a lot of computer programming and had also done a lot of work with lasers.

I started off as a member of the technical staff on a DARPA [Defense Advanced Research Project Agency]-sponsored laser countermeasures project. The goal of the project was to figure out, as you put materials on the sides of missiles, how hard could you make them? How resistant could you make them to laser penetration? How long did it take to have a failure? Then, in early 1983, about three weeks after we had presented our results to DARPA and others in the Defense Department, the program shifted after [President] Reagan went on television to tell the world that we were going to do Star Wars.

PT: The Strategic Defense Initiative . . .

KUSHNER: There was a big shift for almost everybody [at the company], and the specific program that I was involved with was stopped while they figured out whether they wanted to do something with it or not. So I was on the beach, working for a company without having anything to charge my time to. That’s not good.

PT: How did you get into consulting?

KUSHNER: BDM had been having difficulty on another project, called the strategic computing program. I think they had had five program managers in six months. They came and asked me if I would like to take on that job, and essentially do a turnaround of a project that was having difficulty. I was 24 years old at the time. They teamed me up with a more experienced individual, Bob Dunderville, who described himself as a seasoned “gray hair” and knew all the right things to say—as opposed to me, being the young impetuous physicist. And we ended up being able to successfully turn around the project. Shortly thereafter, BDM asked me to do another turnaround. Then another. And then another. It just kind of grew.

We got bought out by Ford Motor Company in 1988, and I got to do even bigger projects and turnarounds there. Several years later, I went to work for one of my former clients, Craig Fields, the former director of DARPA. He brought me in as VP of corporate development at MCC in Austin, Texas, and then, a few months later, asked me to take over as CEO of the software division. By the end of the first year—I joined in April of 1992—they were making a profit on lower revenues. The next year, they had an uptick in revenues and a profit.

PT: How do you define a turnaround?

KUSHNER: Fixing something where a company is having a problem, or for which the company had invested activity and for which it was not getting its desired result. At a project or division level, it could be a software problem, product acceptance problems, a set of customer problems, project performance problems, or a liquidity problem. At a company level, they may have a liquidity challenge, a balance sheet issue, sales, marketing or technology difficulties, or a company viability problem. Things need to be fixed. I went in and did that.

PT: What does doing a turnaround entail?

KUSHNER: Every situation is pretty unique. Generally, you follow the flow of the money. If a company is having some difficulty, they may not even know where their money is going. The real issue is, if you go into an organization, how do you help them? You look at activity levels, operational reports, and financial packages, and try to quickly understand what the people are doing. And you ask a lot of questions. What is the company’s objective and its strategy in the market? What is its competitive posture, target markets, and customers? What are the key performance indicators for its sales, marketing, distribution, R&D, products and G&A [general and administrative] functions? Are its processes efficient and does it need all the people it has, given its current revenue and cash flow trajectory? Is there a way to do it better or more efficiently? What have been the barriers to success in the market?

If the company thinks you are just going to fire a bunch of people, that is not much of a help. Anybody can do that. Very often, we are not solving fundamental physics problems, we are solving leadership and organizational problems. If we are performing an advisory role, very often we are conducting diligence on the company, or on an acquisition, or on a carve-out or merger. We spend time looking at what a company is doing and interviewing the key people in order to understand how the business operates. It involves a tremendous amount of travel and a lot of meetings, and trying to focus on a fairly extensive set of diligence and operational performance questions. My day is usually taken up with conference calls and some travel.

PT: How long does a turnaround typically take?

KUSHNER: I’d like to say there is a magic formula, but sometimes it’s more a function of how long do you have before the money runs out. Or sometimes you are given 30 days or three weeks to come up with a viable turnaround plan. And you figure it out. Or if you don’t, the next guy they bring in will. In some cases you move in and out quickly, in just a few months. In other cases you stay around until the situation is resolved. I was the CEO of one company, Pacific Crossing, the former Pacific assets of Global Crossing, for three-plus years, until they got out of bankruptcy and then we recruited a replacement CEO. At another, Stage Telecom, I was CEO from 2007 to 2012, until we sold it. Very often, when we get involved with a company, we either work to clean it up and sell it, or we bring in new management to replace ourselves.

PT: Have you had any flops?

KUSHNER: Yes. You don’t hit home runs all the time. I’ve hit a lot of singles, a couple of doubles. I can’t say anything was a total disaster, but there have been some that have been inordinately gnarly to deal with.

PT: What do you like most about your work?

KUSHNER: The thing I like most is that it’s a lot like solving a very complex, multidimensional problem.

PT: Are you making an analogy to physics?

KUSHNER: Yes. One axis is your product set. One axis is your go-to-market strategy. One axis is your consumer base. One axis is your people. One axis is your systems and processes. How can you take it apart and reassemble it so that it’s more efficient and performs better?

PT: Is there some aspect you dislike?

KUSHNER: Personnel issues can get thorny and they can be incredibly time-consuming. The thing that is most challenging is dealing with the litigation that is brought on by people upset about how their position ended up and they feel that the way to resolve it is to litigate against their prior company.

PT: How does your physics background help you as a consultant?

KUSHNER: I would say it has helped in that I have a fairly good capability for deductive reasoning. Also, by having had the opportunity to work with a lot of different people over 30-plus years, you develop the ability to read people. That’s kind of loosely associated with physics. The other main thing is that because physics gave me a very good technical background, I can ask pointed, detailed, very granular questions of employees at my client companies. A lot of these questions end up being in relationship to the company’s products or services in the technology or aerospace or defense or systems or software industries. Because they know that I have been the CEO of companies in each of those sectors, I think it leads them to be a lot more honest. Finally, because I have a PhD in applied physics and a minor in electrical engineering, when I go into a technology-related company, there is a lower propensity of people in those companies to BS me.