Regardless of its specific configuration, every successful turnaround is based on three conditions: a restructuring concept with growth prospects, an experienced turnaround team and consistent implementation management.
Realistic timescales and measures that lead to results are the essential cornerstones of success in each stage of the turnaround. The three steps are as follows:
- Profitability analysis with a focus on product market segments
- Providing transparency about the use of resources
- Deriving value generators / value destroyers
- Identifying turnaround levers
- Initiating strategic realignment with a focus on market opportunities and competitiveness
- Adapting market strategy
- Repositioning organizational and cost structure
- Creating and implementing a turnaround roadmap
- Initiating and establishing the growth phase with a focus on balanced revenue and earnings growth
- Developing a concept for profitable growth from the core business
- Implementing a growth programme
- Using new growth potential through the expansion of core areas
More about the turnaround management process
A turnaround is typically divided into the following four phases: the phase of initial aid, the initiation of the turnaround, the concept implementation and the consolidation of the company.
In the crash phase , the focus is on ensuring liquidity: All cash reserves of the company are to be exhausted. In addition to liquidity-related activities, the major challenges of this phase include the coordination of the interests and activities of all stakeholders, confidence building and the creation of transparency. At the same time, the core functions and essential business relationships of the company have to be maintained. It is therefore often unavoidable to consult external specialists.
The actual restructuring begins in the next phase, the initiation of the turnaround. A turnaround concept is created based on an extensive analysis of the company. Initial emergency measures are also introduced at this stage.
In the third phase, the concept implementation, the developed measures are put into practice and necessary structural changes introduced. This is where the company's products and services are specifically aligned with the markets and customer groups, and the company's activities and processes closely attuned to each other. Building on that, the organizational structure is redesigned in terms of functionally.
In phase four, the consolidation of the company, the reorganization has to be secured in the long term. This is where it has to be ensured that the restructuring that has taken place is not undone by relapsing into old patterns of behaviour. In this phase it is often useful to concentrate on the core competencies of the company. In order to further enhance profitability, additional potential for success must be identified and mobilized.
For more information please refer to our standard reference and bestseller,
‚Turnaround-Management – Crisis Survival for German Mid-Caps‘, www.turnaround-bestseller.de.