Corporate Turnaround: How to Guide a Company Out of a Crisis
Succeeding in business requires things to go right, most of the time. And when they don't - you need to turn it around fast. For every innovation there's a spanner in the works, for every acquisition, there's a pothole. Avoiding them is what business is all about. But even the most successful businesses can fall out of favour or grow too quickly, they can get left behind or get lost in the game. Catching it before it is too late is crucial. And that is what corporate turnaround is all about.
Consulting a corporate turnaround specialist doesn't mean a business has failed - it merely means it is failing or it is heading off course - it is losing money. Some of the most successful businesses in the world have changed their CEO or worked with an expert to turn their fortunes around. As long as there is an open conversation happening to acknowledge why a business is failing - the good news is it might not be too late.
What can bring on the need for a corporate turnaround?
A list of 65 common reasons why companies fail was published by The UK Insolvency Helpline. Some of these include:
- A change in market conditions
- A failure to control costs
- Poor management
- Failure to produce a team with appropriate skillsets
- Insufficient capital
- Poor planning
- Lack of technological integration and media usage
- Not focusing on customers
Turnaround Services: How to change a company's fortunes
Whether a company has experienced poor performance or needs financial recovery, it is important to sure up its future. The focus of any corporate turnaround strategy should be on removing the company from the threat of liquidation and building a plan for restoring its value. Strong leadership is required, and in most cases is found in someone with prior experience in turnaround management - either taking on an advisory role or in a senior position within the company. Only 20% of turnarounds survive - meaning the process needs to be meticulous.
In most cases, the person charged with turning the business around is from outside of the company - a corporate turnaround specialist. This allows them to freely explore the company's failings without any attachment to members of the business hierarchy. It could be that part of the strategy is a change of leadership at all levels of the business or to facilitate a complete change of management structure. The board and turnaround expert will work closely to review the business performance at all levels to discover the underlying problems, the full situation and severity of, so they can establish the chances of survival.
What does a corporate turnaround specialist look at?
An entire independent business review will leave no stone unturned. It is required to prevent further damage to the company and knowledge of the causes can be essential to business recovery. A specialist in corporate turnaround will look at:
- Strategy - To establish new tactics and goals to boost performance
- Business Operations - Highlight overspend and review the production process
- Finances - Investigate the financial affairs of the business to enable a recovery plan with appropriate cash flow
- Corporate Culture - Outlining a business' capacity for change
- Infrastructure - Reviewing the problems in the current business structure.
Developing a Restructuring Plan
The restructuring plan should be configured with the goal of improving the overall performance of a business long term. It should feature debt restructuring, reducing costs, a streamlining of product lines and the accelerated growth of high-potential products. The implementation may include taking out departments and staff members to drastically reduce expenditure, keeping just the critical items for growth.
Once the initial changes are implemented, a business must stabilise. This requires a focus on improving the efficiency of all business operations. In this time, it is important to see some swing in the financial health of the company. Once the business is beginning to bounce back, it is then essential to deal with the damage that may have been done and capitalise on new markets. This, as you will see, is what these three turnaround success stories did brilliantly:
Turnaround Success Stories
If you are looking for some successful corporate turnaround examples, you're in luck. It has happened to some of the best.
Jessops is an example of a remarkable UK corporate turnaround. For years it was falling victim to its digital competitors, namely Amazon, and was unable to manage costs. This would see Jessops acquire the nous of, Dragons' Den investor Peter Jones. Jones overhauled the digital offerings and built strategic partnerships with stores such as Sainsbury's supermarkets. They employed experts on cameras and in-store equipment, as well as revamped the stores to include fast photographic processing. It returned to profit soon after Jones' large investment in 2013 and today revenues are closing in on £100 million a year.
You may not believe it, given its remarkable success in recent times, but Apple began freefalling after Steve Jobs left in 1985. Unable to keep up with the cheaper alternatives on the market such as Microsoft, and not differentiating itself in the way it had done before, Apple was on the brink of bankruptcy. Luckily Steve Jobs was able to step out of the shadows to lead the most successful turnaround in history, as Apple today make £300 billion in revenue every year.
General Motors was rescued from bankruptcy by the US Treasury in 2009, saving 1.2 million jobs and one of the world's biggest vehicle producers. The turnaround proved hugely successful, with the Treasury recouping the majority of its investment the same year. General Motors makes $150 billion in revenue today.
Book a Turnaround Specialist Speaker Today
If you need to employ the services of a specialist speaker in corporate turnaround - look no further. With former CEOs, executives, consultants and business management speakers with significant experience in strategic leadership and turnaround management, we can pair you with the best match for your event or conference.
For more information or to book one of the established speakers that we work with - get in touch today via our online contact form. Alternatively, you can call today on 0207 1010 553.