Turnaround Management

Knowledge Center





Corporate renewal and restructuring during times of financial distress. Explanation of Turnaround Management.


Turnaround Management

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:

  1. "Acts of God" - Certain risks may occur and cause irreparable damage (despite proper anticipation and thorough preparation).

  2. Poor Vision / Understanding of the Market

  3. Poor Strategy

  4. 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:

  • Lack of expertise, experience or education, weak management

  • Market circumstances, weak economy

  • Business economical reasons, earnings crisis

  • Bankruptcy of holding company

  • Board level arguments

  • Fraud, insufficient financial controls

  • Overly optimistic sales projections

  • Financing problems, liquidity crisis, excessive debt burden, undercapitalization

  • Operating cost levels too high

  • Very strong, successful competitor

  • Overinvestment

  • 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):

  1. Assess the situation and future business viability

  2. Implement emergency steps ("stop the bleeding")

  3. Develop strategic survival plan

  4. Implement the plan, restructuring the business. Survive the crisis

  5. Return to normal operations, profitability and growth

  6. Prepare for departure of turnaround management

Special Interest Group - Turnaround Management


Special Interest Group (177 members)


Forum - Turnaround Management  

Discussions about Turnaround Management.


  Turnaround Management is like Surgery
If an organisation is viewed as a person and its health is taken as its condition then management is (...)
 
 
 
 
  Does TM Apply to Organizational Departments Also?
Does the concept of "turnaround management" only applies to organization as a whole, or is it also a (...)
 
 
 
 
  What is Turn Around Time?
Can anyone explain me turn around time (...)
 
 
 
 
  Turnaround Management in India
I am impressed by the method. Probabily in India this method can be widely applied by outsider inter (...)
 
 
 
 
  Two Dimensions to Turnaround Management
There are two dimensions to turnaround management; who leads it and what are the process stages. We (...)
 
 
 
 
  Periodic Health Check of Organization and Turnaround Management
In my opinion the sickness of the organization can be pre determined if a health check is periodical (...)
 
 
 
 
  Recognizing When Turnaround is a Must
The most important part of the whole exercise is to recognize when / if a turnaround is required or (...)
 
 
 
 
  Turnaround Management and Culture
TM is a challenging process that depends of leadership of the manager and the organizational context (...)
 
 
 
 
Hot Financial Distress in Hospitals
FINANCIAL DISTRESS IN FIRMS The financial managers of a firm in financial distress do not have the (...)
 
 
 
 
  Whatever the Name Tag, Turnaround Management is Desirable
In Kenya, the method goes by the name tag restructuring (often used by the media. Now this 'restruct (...)
 
 
 
 
  Linear Programming and Turnaround Management
In business speak, as I understand it, Turnaround Management (TM) also involves strategic decision m (...)
 
 
 
 
  Turnaround Professional Certification
Does someone know any certifications for shutdown or turnaround professionals other than the PMP. Th (...)
 
 
 
 
  Turnaround Management in Upstream Oil & Gas Facilities (FPSO Specific)
I am interested in the upstream Oil & Gas facilities turnaround management. This is a major maintena (...)
 
 
 
 
  Start with Call to Action
I support the idea that turn around mgt be considered a method. I would highly recommend that the f (...)
 
 
 
 
  Recovery and Turnaround
It is my impression that most recovery and turnaround scenario's are too complex. The true challenge (...)
 
 
 
 

Best Practices - Turnaround Management

Here you find the most valuable discussions from the past.


  Use an Insider or an Outsider as a Turnaround Manager?
I wonder, what is preferable? Use an insider for a turnaround, because (s)he knows the complexity of (...)
 
 
 
 
  Role of Marketing in Business Turnaround
What is the role that marketers can play in the turnaround of a business? Thanks for your ideas. (...)
 
 
 
 

Expert Tips - Turnaround Management

Here you will find advices by experts.


 

Required Skills of a Turnaround Manager

Turnaround Management (...)
 
 
 

What Change Agents Should I Use?

Change Management, Organizational Change, Turnaround Management (...)
 
 
 

Driving Factors for a Turnaround

Analysis of Causes of a Turnaround (...)
 
 
 

What Turnaround Strategy is Appropriate?

Turnaround Stages and Strategies Model (...)
 
 
 

Turnaround Management Best Practices

Turnaround Management Implementation (...)
 
 

Resources - Turnaround Management

Here you find powerpoint presentations, micro-learning videos and further information sources.


Turnaround Management Diagram

Corporate Renewal and Restructuring (...)
 

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  |  General Management


Return to Management Hub: Change & Organization  |  Finance & Investing  |  Leadership  |  Strategy


More Management Methods, Models and Theory

Special Interest Group Leader

You here? Sign up for free


 


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2019 12manage - The Executive Fast Track. V15.2 - Last updated: 12-12-2019. All names of their owners.