
What is Turnaround Management? Description.
Turnaround Management involves the formulation
and implementation of a strategic plan and a set of actions for corporate
renewal and restructuring, typically during times of severe corporate financial
distress. Often with the help of outside turnaround consultants or
strategy consultants, a Root Cause
Analysis is made and a turnaround plan is devised and executed,
assuming that the firm still offers the potential to return to financial solvency,
profitability and strategic viability.
Root Causes of Strategic distress
There are just a limited number of root causes for corporate
strategic distress:
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"Acts of God" - Certain risks may occur and cause irreparable
damage (despite proper anticipation and thorough preparation).
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Poor Vision / Understanding of the Market
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Poor Strategy
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Poor Business Model / Execution
More Immediate Causes of Strategic distress
Typically, when these root causes are not dealt with properly,
they will cause a range of problems, which can then trigger a corporate crisis:
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Lack of expertise, experience or education, weak management
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Market circumstances, weak economy
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Business economical reasons, earnings crisis
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Bankruptcy of holding company
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Board level arguments
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Fraud, insufficient financial controls
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Overly optimistic sales projections
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Financing problems, liquidity crisis, excessive
debt burden, undercapitalization
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Operating cost levels too high
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Very strong, successful competitor
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Overinvestment
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Insufficient resources, underinvestment
Often these triggers are interrelated, and several causes
are involved. Slywotzky and Drzik have categorized these triggers in
7 Classes of Strategic
Risk.
Steps in a Turnaround Process
The first step in a turnaround process is
often to change the top management or leadership of the business and to appoint
an experienced turnaround manager. Often strong,
Commanding Leadership
or even Charismatic Leadership
is exerted. The turnaround process typically consists out of the following
key steps (in approximate chronological order):
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Assess the situation and future business viability
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Implement emergency steps ("stop the bleeding")
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Develop strategic survival plan
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Implement the plan, restructuring the business. Survive
the crisis
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Return to normal operations, profitability and growth
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Prepare for departure of turnaround management
Forum discussions about Turnaround Management. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.
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Turnaround Management in India
I am impressed by the method. Probabily in India this method can be widely applied by outsider intervention in a company, coz my personal experience with few companies make me say so....
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Two Dimensions to Turnaround Management
There are two dimensions to turnaround management; who leads it and what are the process stages. We may put who leads on x-axis and put insider at 0 and outsider at 10. Put process stages on y axis wi...
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Turnaround Management and Culture
TM is a challenging process that depends of leadership of the manager and the organizational context to engage success and profitability.
But the cultural context of turnaround management is the most...
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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 i...
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NEW Financial Distress in Hospitals
FINANCIAL DISTRESS IN FIRMS
The financial managers of a firm in financial distress do not have the financial ability to meet scheduled payments, due to cash flow problems caused by declining asset va...
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Start with Call to Action
I support the idea that turn around mgt be considered a method.
I would highly recommend that the first step be a call to action section - enabling the managers to determine the urgency of the situat...
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Recovery and Turnaround
It is my impression that most recovery and turnaround scenario's are too complex. The true challenge comes trying to charter and implement a desired course based on inherent complexity. What are your ...
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 1 comments
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The best, top-rated topics about Turnaround Management. Here you will find the most valuable ideas and practical suggestions.
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Turnaround Management is like Surgery
If an organisation is viewed as a person and its health is taken as its condition then management is the sum of its good practices to keep it healthy, and a turnaround is the treatment when it has fal...
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 21 comments
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Advanced insights about Turnaround Management. Here you will find professional advices by experts.
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Required Skills of a Turnaround Manager Turnaround Management In his book “Corporate Turnaround: How Managers Turn Losers Into Winners”, D. B. Bibeault mentioned four skills r...
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What Change Agents Should I Use? Change Management, Organizational Change, Turnaround Management When choosing between internal or external change agents, organizations should consider following advantages and disadva...
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Driving Factors for a Turnaround Analysis of Causes of a Turnaround In the management consulting practices 6 key factors have been identified that are very likely to lead a Company towards...
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What Turnaround Strategy is Appropriate? Turnaround Stages and Strategies Model Hoffman described 5 turnaround strategies in 3 stages in a turnaround:
Source: Harlan D. Platt, Principles of Corpor...
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Turnaround Management Best Practices Turnaround Management Implementation Today's complex competitive scenario is stretching the survival abilities of many companies. Meanwhile certain skills an...
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Turnaround Management Diagram Corporate Renewal and Restructuring Download and edit this 12manage PowerPoint graphic for limited personal, educational and business use.
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Compare with Turnaround Management:
Strategic Risk
Management | Root
Cause Analysis | Business Process
Reengineering |
Acquisition
Integration Approaches |
Leveraged Buy-Out |
Management Buy-Out |
Liquidation Value |
Commanding Leadership
| Charismatic Leadership
| Interim Management
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