The Essentials of a Successful Corporate Turnaround

Corporate turnaround is a complex set of actions meant to restore a company to profitability, following, in most cases, a period of underperformance. This complex set of actions involves, quite often, business process reengineering strategies and tactics for most business processes, a comprehensive business transformation executed under the pressing schedule of immediate corporate recovery. Although the specifics of the company rescue plan are quite different from one company to another, due to the particulars of each business, there are four essential stages for a successful turnaround, regardless of industry, company size, or particulars.

Corporate turnaround is a complex set of actions meant to restore a company to profitability, following, in most cases, a period of underperformance in sales revenue. This complex set of actions involves, quite often, business process reengineering strategies and tactics for most business processes, a comprehensive business transformation executed under the pressing schedule of immediate corporate recovery. Although the specifics of the company rescue plan are quite different from one company to another, due to the particulars of each business, there are four essential stages for a successful turnaround, regardless of industry, company size, or particulars.

Step 1: Evaluation. Essential for obvious reasons, thorough evaluation is needed to assess the depth and breadth of the restructuring challenge, as well as the timeline. In this stage, leaders quantify cost reduction targets, as well as identify the quick wins for the overall productivity improvement initiative. The complexity of a corporate turnaround is brought by the 360-degree approach in actions needed to successfully ensure stable, long-term company rescue: cost reduction, cost avoidance, increased efficiency, effectiveness, innovation, customer-centric actions targeting an increased customer loyalty and referral, numerous business process improvement initiatives throughout the organization, as well as numerous process reengineering opportunities in environments such as manufacturing, sales, service, and supply chain.

Step 2: Turnaround Planning. Once the evaluation has been completed, the next critical step in a corporate turnaround in turnaround planning: which actions will be executed, by whom, in which time frame, needing what resources, and expecting which results. A good business turnaround leverages existing success stories, winning formulas, and exceptional talent. A successful company rescue plan revolves around the core values of the organization, its mission and its vision, and embeds ways to increase the company’s competitive edge.

Step 3: Communication. This is the stage when leaders take the time to “sell” the corporate turnaround plan to the workforce, achieving a dual benefit of utmost importance: to address employees’ fears and concerns regarding the financial stability of the organization, thus mitigating potential turnover risks, and to get their full support and engagement in executing the complex, change-intensive company rescue plan. Communication is a key factor for success in a business turnaround, because it ensures that the complex changes and managed carefully, therefore eliminating the dreaded resistance to change that could cause delays and other issues with execution.

Step 4: Execution. Finally, armed with a thorough plan, good communication strategy, and selected resources, the execution of the corporate turnaround plan is the last key item on the list. Laser-sharp focus and execution as per schedule will ensure the success of the company rescue endeavor.

The complex undertaking that is corporate turnaround requires talent and skills that might not be readily available on company payroll. This is where securing the services of a turnaround consultant proves to be a beneficial idea, for many reasons: knowledge and expertise in the challenging field of business restructuring, unbiased view of the organization’s strengths and weaknesses, experience in driving change in environments geared towards operational excellence. (I. R., 2010)

The corporate turnaround you have in mind needs the assistance of expert turnaround consulting services, to bring you knowledge and experience in company rescue strategies and tactics, and to ensure long term success and immediate return to growth. I.R. is the author of this article.

Subjects