Turnaround Management

        In the past ten years, a decade of unprecedented corporate prosperity, there were tens of thousands of business failures reported, including dozens of public companies with assets in excess of a billion dollars each.  Many more companies just quietly ceased to exist.   Yet a company does not have to cease existence to be an economic failure or fail to meet the needs of employees and customers. 

        The work that customer’s value requires certain elements.  Imbalances in those elements impairs the productivity of both the worker and the organization.   Imbalances occur naturally during the evolution of a product.    Maintaining balance requires making changes in both the value-added work and supporting elements. 

Change Management 

        Making a change is sometimes difficult. Self-interests become intertwined with perpetuating the status quo.  The resistance to change lends both a stability and rigidity to the organization.  Stability keeps the company from going off in unwise directions.  Rigidity causes delay, requiring larger corrective steps when the need for change becomes overwhelming.  In this way, rigidity can make the consequences of required changes more severe. 

         Listed below are events that often signal declining organizational health. 

Symptoms of Declining Corporate Health

Adverse Sales Trends

Declining Margins

Declining Market Share

Rapidly Increasing Debt

Working Capital Decline

Excessive Management & Employee Turnover

Excessive Growth Without Proper Controls

Slipping Quality

Inability to Pay Competitive Wages

Decline In Information Flow

Failure to Keep Pace with the Market

Lack of Operating Controls

Lack of, or Failure to use, existing Data

Sales to Increasing Numbers of Poor Customers

Growing Leverage

Declining Margin for Error

Consistently Late or Inaccurate Information

The  "Coup de Grace"  a.k.a.  " The Big Project

        Favorable and unfavorable fluctuations fill every workday.  Negative signals are often wrongfully explained as self-correcting fluctuations.  Managers and employees can be lulled into as sense of well being by the lack of attention to these warning signs.   Even when decline appears obvious and threatening, there can be delay in acting. 

Denial 

        Randy Wright Patterson, a fellow Turnaround Professional, works almost exclusively with companies in late decline.   When asked about helping companies earlier to avoid a decline into crisis, Patterson observed, “Companies go through stages much like those recognized in individual counseling. The First Stage is Denial.  The Second Stage is Bargaining.  The Third Stage is Anger.   The Fourth Stage is Depression.  The Fifth Stage is Acceptance.  Only when leaders get to the Fourth or Fifth Stage are they ready to initiate the necessary changes.“

        When a company postpones adjustment until a crisis develops, the pain is greater and more visible. Downsizing and other major acts of renewal are typical of the large steps implemented by Turnaround Professionals at companies in distress. Often, these large steps merely catch up with what others have already done.  Too often, they happen after clinging to outdated structures, practices and products that drain the company’s resources.  With resources drained, the downsizing company is unable to create adequate income streams necessary to profitably employ their most important assets, their trained workers.

Certified Turnaround Professional

        As a Certified Turnaround Professional, Richard Johnson can provide guidance to existing management or serve as an interim manager when existing management has been compromised or a crisis exists.  Often a new face can become a catalyst for resolution of previously hardened positions.   His affiliations with the Turnaround Management Association and Institute of Management Consultants provides unique access to a nearly infinite talent pool when a project requires multiple in depth skill sets.  

        Certification of Turnaround Professionals is relatively new, but in this era of rapid change, any company is vulnerable to crisis.  When a crisis occurs, industry experience is often less important than the knowledge to make critical survival decisions quickly.  Who you trust to make critical decisions wisely can make the difference between future prosperity and corporate failure.  

        Through the designation of Certified Turnaround Professional, the Corporate Renewal industry follows in the footsteps of other professions that have established stringent criteria that create a benchmark of practical experience, knowledge and ethical integrity.   The result is an elite group of less than 200 professionals nationwide that struggling companies can engage with confidence.

        Certification requires meeting standards of education, experience and professional conduct, as well as passing examinations in Management, Law and Accounting.  The examinations test relevant theory and practice involving workouts, insolvency and troubled businesses.  The faculty for the Certification process is composed of practicing professionals and notable staff members of leading Colleges and Universities in each of the three disciplines.

Turnaround Process

        Though no two situations are exactly alike, Turnaround Professionals quickly establish whether the key elements for a turnaround exist.  If convinced that a viable turnaround is possible, they analyze the current situation and take what ever steps are prudent to assure the company can move past the existing crisis.  While the crisis is being stabilized, a plan is developed to  return the company to normal operations.  Once formulated, the plan is presented for approval to all key parties both inside and outside the company.  Upon approval, the plan is executed and the company is returned to normal operations as quickly as possible.

        If you would like to discuss a situation with Richard Johnson or his associates, click on the feedback button at the top of this page and leave us a message on the feedback page of this website.