10 Best Practices for Working with a Turnaround Consultant

Learn 10 best practices for working with turnaround consultant including understanding objectives & assessing strategy tailored towards unique needs.

10 Best Practices for Working with a Turnaround Consultant

Our list of the 10 best ERP programs highlights the vendors that our ERP experts have found to be innovative and have solid functionality. This is an overview of those ERP systems. Our time management consulting services include discoveries, financial restructurings, cost reduction, and revenue improvement opportunities. This involves identifying the key areas of the crisis, defining business needs, and gathering information on why those business needs are not being met. Business crisis consulting helps define the objectives of the operational restructuring program.

During this time, it's important to look for strategic and operational gaps, as well as issues related to company culture, that need to be addressed to support the new business model. M&A integration involves creating a framework for pre-merger analysis and planning and executing post-merger integration, all within the first 100 days. Restructuring often refers to financial and operational restructuring. In a financial restructuring, cash is king. The focus is on managing cash flow through forecasting, restructuring obligations and strictly managing finances.

The goal is to restructure the entity to survive and determine what it will need to change. Operational restructuring, on the other hand, focuses on determining how to continue operations and, at the same time, meet debt and operating expenses in the short term. Basically, for a company to move from poor financial performance to solid financial performance, it will have to undergo financial and operational restructuring. If you're an organization, lender, or private equity firm interested in turning your business around, request a free consultation below to learn more about our financial restructuring and operations management consulting services. It's almost impossible to find a valid definition of a company in distress, and it's dangerous to think that you have one for your own company. Depending on the situation, there are probably 25 different signs of possible distress (illustration).

However, the problem is rarely comprised of just one or two of these things. Rather, it is the result of more of them interacting with each other and with other external factors. The tendency of most managers is to put all their focus and resources on three or four big bets to turn the company around. That can be a high-risk approach. Even if big bets are sometimes necessary, they take a lot of time and effort and don't always pay off.

For example, let's say you decide to switch raw material suppliers so that you can source from a low-cost country and expect a 30 percent reduction in direct costs. If six months later you realize that the material specifications don't meet your needs, you'll have spent time that you don't have, maybe you've interrupted your entire production program, and you've probably spent a lot of money on something that hasn't paid off. Experience tells me that most successful changes involve changing one or two core team members. In my 20 years of doing this, I've only seen a small handful of managers who I thought were really incompetent. But it's a practical reality that there are managers who must be masters of decay.

And most of the time, they are incapable of the mindset change necessary to make fundamental changes to the operating philosophy that they have believed in for years. Whether they realize it or not, they block that change because they are determined to defend what they believe to be true. Although it's difficult, eliminating those people sends another signal to stakeholders that there will be changes and that you're not afraid to take difficult steps. Renewal consultants are experts at helping you quickly change your company's processes to increase profits, reduce costs, and improve cash flow. Companies use their services when something in their business is very unbalanced.

Many business owners who hire renovation consultants don't even know what part of their company needs help, and many of them can't prioritize what needs to be done first. Understand your objectives and assess whether the strategy will be designed with your company's unique needs in mind. A good rotation consultant can more than offset your cost by increasing efficiency, increasing profits, and improving business practices. A change specialist is someone with a broad set of skills and a track record of successful business transformation. During these phases, it's important to position the company for growth so that growth can begin as soon as recovery is achieved. Typically, a good restructuring consultant can evaluate and help implement 15 to 20 ways to immediately make a positive difference in your company.

Doug Yakola is a senior partner at McKinsey's RTS which focuses on companies in crisis and financial difficulties. Change management is important because none of the previous work is worth anything if employees don't understand what they are responsible for. When you meet the team study their reports and meet with customers and suppliers you'll begin to form a clearer idea of the challenges that exist within the company - the problems that need to be addressed - the path forward - and the people who can help you lead the process. If your organization is considering using a turnaround consultant there are certain best practices which should be followed in order to maximize benefits while keeping costs low. Although you may understand concepts related to transforming a business it's always helpful to have an outside perspective from an experienced business restructuring consultant. Restructuring companies will also acquire a minority shareholding while keeping costs minimal in order to achieve an alignment of objectives with owners. The functions of a restructuring specialist vary from company-to-company but having an experienced person is key in identifying areas of concern as well as improving cash position. As director of restructuring or financial director over nearly two decades Yakola has seen how managers slip back into crisis without acknowledging their situation worsening - this helps build relationships with employees while establishing new commitment levels. When working with turnaround consultants there are certain best practices companies should adhere too in order for them reap maximum benefits from their services while keeping costs affordable. These include understanding objectives - assessing whether strategy will be tailored towards unique needs - having complete experienced person - changing one or two core team members - eliminating people who block change - acquiring minority shareholding - building relationships with employees - establishing new commitment levels - positioning company for growth - evaluating ways for immediate positive difference - studying reports - meeting customers & suppliers - understanding challenges & problems - creating path forward - leading process.