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The
Turnaround
-- Is the Goal to Sell the Company or to Make
Changes
that Offer Sustainable Growth and Development?
When is a turnaround used? Turnarounds are not merely a course correction
for a business that needs a new direction. The turnaround is only used
when the company is in real danger of failure and time is of the essence
to make the necessary changes.
Preparing a Company for Sale. The emphasis is concentrated on correcting
the cash position of the company and returning the cash flows to a level
that both the lender and the vendors are comfortable that regular timely
payments will occur. Typically, this is done by cutting overhead expenses
and reducing head count to align the expenses with the revenue dollars.
While this sounds simple in concept, the CEO often has a difficult time
assessing the needed talents for the company in the future versus the
recognition of loyal employees who have been with the firm for a long
period of time. Interim managers can be hired to implement or even make
those difficult decisions on behalf of the well meaning but reluctant
CEO. Once the company is stabilized, it can be readied for sale if that
is the preferred option.
The Sustainable and Holistic Turnaround. Restructuring debt and improving
the cash position of the company is certainly a major goal in any turnaround.
However, if the goal of the turnaround is to reorganize the business
to put it on the road to growth and sustainability, then other things
must be considered:
- Strategic
Management Focus. Sometimes the immediacy of the financial
issues mask the larger problems associated with the struggling
company. These usually include a frustrated senior management that
goes from being growth oriented and strategic when times are good,
to hands on, tactical and micromanaging when times are tough. As
a result, the problem is compounded by the egos of the senior management
group who are reluctant to admit that hiring a team of interim
management turnaround specialists is necessary. They typically
believe that the need for turnaround expertise somehow signals
a weakness in business acumen. That could not be further from the
truth! Turnaround specialists from Pilot Management only offer
the experience necessary to “stay the course” on strategic
decision making during those times when the economy has “thrown
the management a curve ball”.
- Executive
Coaching. Pilot Management incorporates an executive coaching
process specifically designed for CEOs and others in the “C
suite” by focusing their efforts on strategic issues, leading
versus managing, identifying and maintaining the vision of the
CEO, the mission of the company and the brand for your customers,
suppliers, employees and stakeholders. This also includes substantial
improvement in communication performance with all of those groups.
In short, get the CEO’s head out from under the business
so that he or she is free to work on the business. While the CEO
is learning new ways to think, the turnaround specialists are critically
reviewing existing processes and making strong and quick decisions
for improvement.
- Sustainability
Through Renewed Sales and Marketing Efforts. Cutting operational
expenses, restoring the cash position of the company, and renewing
the emphasis on strategic issues are certainly paramount to the
success of a turnaround. Nevertheless, sustainability is the key
to the long term success of the turnaround company. A new focus
on top line revenue through marketing, sales processes, and customer
service ensure that the turnaround is sustainable. Pilot Management
accomplishes this by conducting an audit of the sales and marketing
functions to make sure that both the correct processes are in place
and the right people are developing new business for the company.
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