What is the Role of a Turnaround Consultant? - An Expert's Perspective

Turnaround consultants are experts in business restructuring tasked with analyzing the seriousness of a company's situation and determining whether it can be reversed. Learn more about their role from an expert's perspective.

What is the Role of a Turnaround Consultant? - An Expert's Perspective

Turnaround consultants are experts in business restructuring, tasked with analyzing the seriousness of a company's situation and determining whether it can be reversed. This analysis requires a deep understanding of what is wrong, how to resolve the issue, and the key strategies to guide the organization in a positive direction. It also includes a cash flow forecast to understand the use of cash. This analysis helps answer questions such as “Is this business viable?”, “Should we keep it?”, and “Do we have the cash resources to jump-start the recovery?” It is an essential element of organizational success and must be a fundamental part of any valid restructuring model.

In today's world, turnaround consultants are becoming a one-stop shop that helps companies obtain funding (in close collaboration with banks and venture capital) and professional services firms (such as lawyers and insolvency professionals). This allows them to access the full range of services that are normally needed in a restructuring process. Restructuring managers are also known as “restructuring professionals” and are often interim managers who stay only as long as necessary to achieve the restructuring. Therefore, if a public organization is undergoing transformation, it is subject to performance dimensions (restructuring management does not only apply to companies in difficulty, but can help in any situation where it is necessary to implement a direction, strategy or general change in working practices).It is an accepted practice for lenders to ask their troubled borrowers to hire recovery consultants to help them fix things by reducing expenses, developing strategies to increase revenues, and informing the lender about the borrower's financial progress in a meaningful and timely manner. Turnaround consultants play an important role in helping businesses succeed.

They provide valuable insight into how to best manage resources and develop strategies for success. They also provide guidance on how to obtain funding and access professional services firms. Additionally, they can help organizations undergoing transformation by providing performance dimensions. Finally, they can help lenders by providing assistance with reducing expenses, increasing revenues, and monitoring financial progress.