A Turnaround Is About Making Large Moves
The turnaround is about changing direction. It’s about making major moves, not minor adjustments. Minor adjustments are made frequently as you manage your business, but a turnaround is about changing direction, making major moves. It also frequently requires implementation of crisis management strategies, usually around secured and unsecured debt obligations now in default and threatening your ability to operate. The mandate is to reverse your cash flow negatives in various ways, then track new directions, change course, think outside “normal” standards. This may even mean doing the impossible of turning loss into profit, negative cash flow into positive cash flow – alchemy of a sort.
Requiring a turnaround implies that whatever you’ve been doing is not working, and the result is a significant downturn now requiring a serious intervention. This typically requires crisis management first to settle the attack on your business or your inability to operate, to work your way out of the emergency your upside down cash flow has caused. This calls for confronting unyielding barriers as you fight for survival.
Typically, the small business owner has lost all credibility as he has broken his word repeatedly and thus can no longer be trusted or relied upon. Creditors are forcing liquidation, refusing to supply and ship necessary goods and services and the business is brought to its knees, unable to operate, a challenge to its very existence. At this point, new management is required as with the credibility gone, there is no way to operate.
Enter the crisis management team, the turnaround expert who makes new promises and keeps them, creating new credibility instantly. The crisis management team downsizes and creates better cash flow, convinces the suppliers and the secured banks to work with them in order to get paid or everyone loses, letting them know your business can succeed and that a new day is here. First, crisis management intervenes and stops the attack and then the turnaround effort begins in earnest. This is what it is all about. The one-two punch. The team performs emergency ward heroics to stop the hemorrhaging and then the operation to cut out the infection and repair the broken bones, saving the patient to live another day. Then begins the healing, the rebuilding.
The turnaround is about making large moves that make large differences to the entire operation. Sales and marketing and finance strategies are all to be examined and changed dramatically and significantly, rebuilding a new company that can not only survive, but can prosper in this new age. This is what a turnaround is all about, not making minor adjustments but instituting major changes. It’s not done internally, but rather through intervention by an external team with the credibility and experience to rebuild your business successfully.
This works and nothing else does when a business is in crisis.
