For turnaround managers, the best-case scenario is when the
owner or CEO of a troubled company recognizes that it's time
for a change — and he makes the call before it's too late.
Usually this realization comes about after completing a process
very similar to the five stages of grief — Denial, Anger,
Bargaining, Depression and Acceptance. He's gotten past blaming
everybody else — his bank, his creditors, his employees
— and now realizes that it's up to him or her — and
no one else — to find a way to fix the business NOW!
Of course it rarely happens this way. Usually, management —
and its advisors and creditors — are all at different stages
in the process with little or no agreement on the next course
of action. There are significant differences of opinion among
the parties as to the severity of the situation. In an attempt
to resolve these differences, a creditor or advisor often presents
management with a list of consultants and strongly suggests
that a turnaround firm be retained. It's understandable that
the executive is reluctant to go down this path, but he knows
he has to make the call. He wants to know how I can help. Here's
what I tell him.
We work for you. The lender or your attorney gave you
a list of consultants to call. You want to know who I'm working
for: am I working to help them or to help you? A reference by
a lender or other trusted advisor usually indicates previous
experience with the group and positive results. When your business
is in a troubled situation, the ability to quickly regain credibility
with your creditors (secured and unsecured) is one of the keys
to success. Working with an experienced, known firm can sometimes
facilitate a positive outcome. Regardless of who recommends
us for an assignment — your attorney, CPA, banker or other
professional — we work for you. You want to make your business
profitable again. It's our job to help make that happen.
You are right — we don't know your business. Though
we have experience in hundreds of industries and potentially
have a good understanding of yours, our experience has shown
that, in a distressed situation, specific industry knowledge
or experience is not as important when choosing a turnaround
professional as is the firm's experience in dealing with crisis
situations. Specific knowledge of creditor relations, out-of-court
workouts, and bankruptcy proceedings are the skill sets required.
We will never know your particular industry as well as you do,
but we know how to put a troubled company back on the path to
profitability.
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We are not a Swiss-army-knife consulting firm. Our
practice concentrates solely on financially and operationally
challenged businesses, regardless of industry. Working with
troubled companies is the only thing we do, allowing us to
provide a level of expertise that other multi-practice or
industry-specific firms cannot match.
We know when to go home. Our job is to perform to the
best of our ability and in the most expeditious manner to
return your company to financial and operational health. We
understand the term "time is of the essence" and
our analysis is focused, with clearly defined objectives allowing
a quick resolution. We know when to leave!
If you need help later, we'll show you how to get it.
When your turnaround advisor completes an engagement, that
doesn't guarantee clear sailing for your company. It is often
wise to assemble a new team of advisors to help guide your
business in the right direction. We can help you set up an
advisory board of experts who can assist you in the areas
where your business needs the most support.
Marc Kramer, a faculty member at the Wharton School of
Management, has written an interesting article on the value
of turnaround consultants. Read
it HERE.
Write to me.
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