How the right turnaround management specialist is a viable solution for struggling businesses.


How the right turnaround management specialist is a viable solution for struggling businesses.

Turnaround management is not often used for struggling small businesses.   When otherwise good businesses experience financial difficulty, they have limited options for help. Most would simply opt for voluntary administration or liquidation.

There is a softer approach to addressing this business issue. It is turnaround management, which focuses primarily on the strategic, financial and operational management of a struggling but viable business. Turnaround management is a method aimed at returning a business to profitability through business restructuring. In these cases, directors often know what’s going wrong with their business, but struggle to make the necessary changes.

Why engage a turnaround management specialist?

By engaging a turnaround management specialist, you are engaging an external advisor who is not caught up in the politics and emotion of running a business. This enables turnaround management specialists to provide clear, concise and creative solutions for business difficulties, which thereby allows owners to focus on the business rather than reacting to its pressures.

Typically, the steps a turnaround management specialist may take will include:

Analysing the current status of an organisation;

  • Pinpointing areas that require immediate action;
  • Identifying areas that will benefit from longer term strategic change; and
  • Putting a business plan in place to secure long-term growth and sustainability.

When seeking a turnaround management expert, here’s a few qualities you should be looking for.

Complete objectivity

A professional turnaround management expert should enter a company with a fresh eye and complete objectivity. They must be able to spot issues and create solutions to problems that may not be visible to company insiders. The turnaround leader should have no political agenda or other obligation to bias the decision-making process, allowing them to take the sometimes unpopular, yet necessary steps for business restructuring and survival.

They should bring business skills, not necessarily industry specific skills.  Often people from outside the industry can better question certain behaviours.

Leadership qualities

During the turnaround process, it is essential that the consultant has the ability to help lead and control the process. They must show excellent negotiating and interviewing skills at all levels of business. They must also possess the ability to quickly grasp key concepts within the business and take action in a confident, authentic and inspirational way.

Sector expertise not required

In many cases, having a leader from outside of your industry is an advantage as they bring a different perspective and can generally work better with management and staff.  The problems in business are rarely sector specific. They usually centre around management, leadership or financials issues.

Business and technical skills

The turnaround management leader needs to be able to examine one element of the business after the other and understand how that element balances with
the overall business picture. The consultant must have the business and technical skills to apply sound practices of turnaround management to successfully navigate distressed businesses through the business restructuring process.

Boldness and trust

Trust is often in short supply at the start of a turnaround process. A turnaround management professional needs to develop trust with the directors and management team quickly in order to be effective. They also need to be bold in order to provide the right advice. This boldness needs to be tempered with a temptation to become a bit reckless, which is perhaps why an organisation is in trouble in the first place.

The key objective for any business restructuring via turnaround management is to achieve the survival and future profitability of the business or, if that is not achievable, to find and achieve better financial outcomes than liquidation.

Should you or one of your clients wish to talk to us about the state of a business while we can still help, contact Riad Tayeh on 02 9633 3333, email or complete our online contact form  to find out more about how we can help you.