Turn Around Management
Recent studies suggest every business will require the services of a turn around expert. The ideal of legacy businesses is a fallacy as we have been recently reminded. Bulwarks like GM, AIG and Wachovia have endured to restructuring, bankruptcy and mergers and acquisitions to survive. In most cases there is a path back to profitability. No one can guarantee the organization will look the same, it certainly won't act the same as it did before turn around.
There are five basic stages to turn around and we are experts at delivering results. Turn around is not easy and your organization's ownership and board of directors must carefully consider all alternatives before selecting a turn around specialist.
- Changing Management: Even if existing management is willing to stay and recognizes the need to make major changes, they will have a difficult time establishing credibility and attracting true believers. Handing the helm to someone new is the top priority and first step to recovery.
- Analyzing the situation: We must determine a baseline and ground truth for the organization. The first days of a turn around will be spent understanding every aspect of your company. We need to know what you do and how you have been doing it. Data is collected and analyzed moving us to step three.
- Implementing an Emergency Action Plan: When a country is at risk its leader may institute martial law, a nurse performs a triage and in turn around we implement the EAP. In this phase we stop the bleeding, salvage cash flow, and build profitable units. Dead units, drains to cash flow and unprofitable business lines are repaired or restructured.
- Restructuring: In this step we eliminate waste, improve cash position, and assess the business continuously. The organization must now be restructured to improve profitability and sustainability. Personnel must be aligned and core business units fully repaired or eliminated. This is the most painful step for many as withdrawal from business lines may be appropriate.
- Return to normal: In this step the health of the business is good. Managers now once again begin to expand products and services. New business units may begin to appear but the focus will remain on profitability. Many businesses will not make it to this step as they are often bought through mergers and acquisitions in the earlier stages.