Turnaround Feasibility

Turnaround Feasibility

Turnarounds are always risky, but can equally provide a highly attractive investment provided that there is a basis for a sustainable turnaround capable of realising lasting value.

Driving out cost, regaining financial and management control, and frequently refinancing are all typical elements in the crisis management phase. But what then? How do you ensure sustainability, particularly when the underlying cause may be rapid market and competitive changes which the business has failed to anticipate and react to?

In nearly all turnarounds there is a need for a Strategic Change phase, in which the business substantially changes its engagement with the market and it business-operating model. Without this the benefits of cost reduction and tightened cash-flow management will be short lived.

The key question in turnaround analysis must therefore relate to the scope for a sustainable turnaround with the consequent ability to create lasting shareholder value.   But since the scope for a sustainable turnaround informs both whether a turnaround should be attempted and the decisions to be taken during the crisis stage, it is essential start developing this thinking early. Ideally this should be before selecting turnaround route at all and this is where our turnaround feasibility service is designed to come in.

With our turnaround feasibility service, we rapidly analyse the underlying problems causing the strategic under-performance of the business. Very often these are masked by the attendant financial and management crisis which, understandably become the primary focus of the operational management team.    We will work to understand market demand, competitive analysis and the dynamics of the whole. And we will look at the operation of the business in total.   Based on this we will diagnose the real and often underlying issues that led to the strategic decline, and thus establish the scope for sustainable turnaround.

Fresh thinking, unencumbered by entrenched views is key to this process.

Market Engagement: Based on market and competitive analysis, we will seek to identify opportunities for improved market engagement and effectiveness. We will seek means of refining existing propositions and exploiting existing capability more effectively through new propositions. Our objective being not only to regain market strength, but where possible to leapfrog existing competitors, through more effective market segmentation, proposition targeting and operational effectiveness.

Business Operating Model: Similarly based on analysis of the business operations, capabilities and activities, we will seek to identify those activities providing greatest competitive differentiation and customer ‘value’. We will focus attention on service improvement (where part of a market engagement/proposition enhancement) and process re-engineering to deliver both enhanced competitive effectiveness and operational efficiency. In the case of activities with low competitive differentials, we will seek direct means of cost reduction or through outsourcing, improved procurement effectiveness, or activity redesign/elimination.

This is our core business: Using our fresh-thinking approach, coupled with our proven operational track record we are well positioned to be able to identify the real issues, value and potential in turnaround candidates. Very often the resultant business will be operationally radically different as a result – but will have the ability to be successful going forward. It is this need for more radical change “changing the game”, rather than simply refining existing approaches and models which is key too most successful turnarounds. Yet without independent fresh thinking, it is frequently not possible to identify this opportunity.

Of course, if you want we don’t just stop at the feasibility stage. We are able to support all the way through the turnaround, and indeed provided ongoing support services thereafter.