Evaluating a business’ situation and what should be done to further its best interests requires dedicated time, objectivity, emotional detachment (those latter two are different — objectivity comes from clear vision, and a grand, experienced perspective while emotional detachment comes from not being emotionally constrained from sacrificing any sacred cows, or offending anyone), and the experience and expertise of someone who has lived through a large number of these types of situations previously.
You need a tactical and strategic specialist upon whom you can truly rely. And you are already frightened that a stranger will compromise or destroy things which you have emotionally invested in. Interestingly, this very fear and attachment are the factors that keep leaders from leading the great businesses which they’ve built in moments of either crisis or critical decision.
Your business is in dire straits. You don’t know quite when it happened but your business is hurting: cash flow is very then, both fixed and variable costs seem to be on the rise, and your regional managers no longer seem motivated beyond their biweekly paycheck. You wish that you could stop everything that you’re doing and spend a few weeks examining the business in detail, but you are 1) too busy and involved in the business process and 2) not at all objective. You lack time and objectivity — and to top it off you are too emotionally involved with the business to make the changes that might have to be made. You and your attorney conferred with me, and came to the conclusion that you needed a Turnaround Consultant, and asked if I had an interest in the engagement. I am at your offices this morning, because as good a visionary, leader and hands-on manager as you are, you lack time, objectivity and the emotional detachment necessary to be effective in doing what must be done.
It requires time, objectivity and emotional detachment to do what has to be done for a business at any critical point in its evolution: whether that is averting financial disaster; contemplating adding a new product or service; thinking about outsourcing or using virtual office services to cut your staffing requirements (and the expense which comes along with having a full-time employee — now close to 37% on average of the employee’s base salary in most corporate cases); contemplating developing a virtual export or import division; evaluating a merger opportunity with a competitor in your industry who is significantly larger than you are; evaluating combining your business with you largest supplier; thinking of recapitalizing through either a private placement of equity interests, a public offering of securities, a deal with a private equity firm; a “guaranteed” public offering of your company‘s common shares through an investment banking firm; or, signing on for a large line of credit at seemingly good terms with an overseas firm out of the Middle East which only wants a 7% equity stake in your company.
When a business is at a critical inflection point in its evolution, life cycle or critical path, the key individual cannot necessarily trust or confide in anybody except for his or her lawyer or his or her accountants — but these professionals are limited in their scope of practice and expertise. The person whom you seek is usually referred to you by your legal counsel or perhaps by your independent accounting and auditing firm — and he will have those attributes necessary to guide you past that inflection point that we spoke of earlier:
It’s at these times, whether the decision involves avoiding a disaster or acquiring another firm in order to make a giant step in your business volume and diversification (not to mention the increase) in revenue sources that I feel delighted to be needed.
Thank you for reading me, and for circulating my posts through your ever-growing social media channels.
- Restructuring Debt In A Business Turnaround (douglasecastleblog.com)
- Turnarounds,Restructurings,Bankruptcies:Checklist (douglasecastleblog.com)
- Main Syracuse ambulance company files for bankruptcy; change won’t likely … – SU The Daily Orange (subscription) (douglasecastleblog.com)
- What is the role of marketing and sales effectiveness in turnaround performance? (seanfburns.com)
- Cure “Cash Crunch”: Increase Cash Flow And Liquidity (douglasecastleblog.com)
- Oprah Winfrey’s OWN is now turning a profit (smartbrief.com)
- Fixing Broken Businesses: Workouts And Turnarounds (douglasecastle.com)
- How to turn around a failing company (telegraph.co.uk)
- Why does BPM matter? (ebizq.net) – They Invent New Acronyms Every Week. And When They’re Not Doing That, They’re Finding New Uses For Existing Acronyms Just To Create Confusion – I Thought That “BPM” Stood For “Beats Per Minute”. That’s Why I’m One Of Those SOBs Who Avoids Acronyms.
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