Recognizing When Turnaround is a Must
The most important part of the whole exercise is to
recognize when / if a turnaround is required or if some path adjustment will do. Doing frequent turnarounds may not be good for an organisation as it has some disruptive effects also.
In my opinion when the
profit is continuously going down for more than three terms or is
contrary to the general business trend, there is a need for turnaround.
Another method could be using control chart techniques of SQC to recognise if the deviation in profits is significant and needs a turnaround.