Turnaround Management is a deliberate strategic process of formulating a strategic action plan and series of aligned development initiatives focused on measureable outcomes for business renewal, revival and realignment. Unfortunately, it is most often acted on when the business is already in some stage of financial and operational stress.
In order to address the issues of business turnaround it is effective to garner an independent perspective of the current situation and to include relevant staff and stakeholders to assist in quantifying the plan and go forward strategy.
A series of steps logical steps should be considered and utilised in order to create new life and sustainability into a business. To help understand how turnaround management works, having a good understanding of the following 5 step process will make it easier to create, implement and adapt the plan to achieve the planned outcome for the business.
Step 1 – Define the Current Situation
This is about understanding and defining actually what is going on now. At this stage it is key to identify and define the performance issues and what the potential causes are likely to be for the situation being encountered.
It is important to consider all areas of the business and the consequential impact on other areas and also the financial health of the business. Hence look at sales, marketing, customers, distribution, manufacturing and financial management of the business.
The objective of this stage is to clearly identify issues that exist and put in place actions that will limit the potential for further decline in the business whilst to continuing to maintain business in a manner consistent with the duties and responsibilities of the Directors and to avoid trading insolvent.
Step 2 – Create Alternative Solution Strategies
Once you have clarified the current situation develop and scope a number of alternative strategies to drive the business forward. In developing the alternative strategies it is good to use a variety of tools including a SWOT analysis (whilst basic when applied just as a SWOT, use the dynamics of Importance and Urgency to define those aspects that are key to survival).
Key here is to identify short, medium and long term strategies and define those that are key to taking the business forward and then prioritise them in terms of importance and impact to business growth.
Step 3 – Select Actions and Implement
With the planning done you now need to select and implement those actions that are required into practice. Stephen Covey (7 Habits) calls this putting first things first. Now that you have identified the issues developed the alternative solution outcomes you need to act. But do what you need to do in a defined and processed approach. Ensure that you know what has to be done, why it has to be done, how it has to be done and most importantly who and when it has to be done.