Recently, in America, a new kind of financial hero has been getting some good press: the turnaround artist. The hired gun goes into an older, faltering company and just starts firing. The marketing and advertising department, bang. Corporate jets and country clubs, bang, bang, bang. Middle management, bang. Senior management, bang.

By the time he’s finished, nobody except a few Joes on the assembly line, wearing earplugs to block out the shooting, are left standing. The company is profitable. (Of course, it probably has no long-range viability other than to be merged into a real organization, but that’s another story.) The stock price soars and the hero is interviewed for the cover of Business Week.

“Well,” he says, “it was a hard job letting all those people go. Really hard, but someone had to do it. Someone had to save the jobs for everyone else. It was rough. It was horrible. I’m so emotionally drained, I need to take off six months [and write a book about it] before my next turnaround.”

Then the hero gives his best General Grant (“Yeah, my heart is heavy for all the boys lost at Gettysburg, but at least their families know they didn’t die in vain”) pose for the camera and goes off to cash in his millions in options.

What a crock! He loves firing everyone. That’s what he gets paid for. He doesn’t even know the people he fired. He has no idea what went into building the divisions he just dismantled. He’s shown no more courage or determination than the Mafia’s made man. If he really wants to prove something, why not try it the Japanese way? Give up the options and quick-exit strategy. Make a long-term commitment to the company and then decide what or who to shoot. Not really interested in the job? I didn’t think so!

With cash flow running millions of dollars negative and our nest egg rapidly shrinking to nothing, it was clear I was going to have no choice but to cut. There simply wasn’t time to grow our way out of the problem. I was not a hired gun, though, brought in to start recklessly and heartlessly blasting away. This was my company. I built it. My soul was poured into it. These were my people. I had hired them. They had faith in me. Soon a lot of the company would be gone, and a lot of the people would feel abandoned and betrayed. I was going to have to go through a Japanese-style initiation, and I wasn’t looking forward to it. This was a time for serious consideration and surgically precise moves. How did I get into this situation in the first place?

The answer to that question would be the key to extracting us from our current problems. Like Hansel and Gretel, the key to getting out of the forest was to retrace our steps going in.

Our telephony business had always been profitable. The close to 100 percent markup we were able to charge on callback virtually ensured that. True, in order to meet Wall Street’s growth expectation we’d let the division grow fat, recently hiring too many salespeople and spending too much on direct consumer advertising, but this could be cut back. The installed customer base and strong worldwide rep network would then be generating good profitable cash flow again.