Many underperforming companies face seemingly insurmountable challenges. What is the best way forward–a turnaround, restructuring or liquidation? The right information and approach can help company leaders make better-informed decisions.
Any business organization, at some point in its lifecycle, may grapple with financial distress. Market conditions, a paradigm shift in the industry, a stressed supply chain or other disruptions (such as a global pandemic) can happen at any time. In a best-case scenario, companies can quickly pinpoint the issues, shift course, and even thrive.
Of course, this is always easier said than done.
The first step on a path to transformation is conducting an objective, thoughtful inquiry to spot liabilities and reduce risk. Such a turnaround assessment can determine the root cause of underperformance and the best course of action.
But where to start?
Turnaround and Restructuring Advisors
Seasoned financial and operational professionals who can handle the initial assessment, strategy, and implementation–such as turnaround, restructuring or other alternatives like liquidation–can make the process more efficient. Here are four qualities to look for in a turnaround and restructuring advisor:
1 | Comprehensive service
Look for an end-to-end provider to evaluate the issues, develop a strategy and implement actionable solutions.
2 | Real problems, real people
Bring on professionals who can speak candidly with stakeholders across the organization – including workers on the frontline. This process, while business-focused, can be personal for company owners and others. Some may feel as though they have invited a turnaround advisor into their own living room. Professionalism and empathy is key.
3 | Expertise from every angle
Look for professionals who regularly work with multiple parties outside of the company, such as lenders, investors and creditors, boards of directors, suppliers, and others.
4 | Define successful outcomes
Be sure to negotiate a defined statement of work, including a punch list of action items, whether that includes a strategic plan, specific metrics or other goals. This ensures that everyone is on the same page.
