The Big Bang Effect

This theory came up while I was reading the Corporate Finance section of CFA Level 1. What it basically says is that companies report large losses when a new management team takes over and report large profits once the management has been in place for one or two reporting periods.

I experienced this same effect recently. There was a software project where a new project manager took over. She came and started criticizing everything. She spent a lot more time proving that the system is bad than coming up with solutions or improvements. The effect is not complete as her team is yet to produce anything tangible where she can claim a win or a large profit.

Which makes me realize that true leaders are the ones that come in, see the problems, look for solutions and motivate the staff to implement those solutions. It's really easy to criticize when there are issues but much harder to motivate and solve those issues.