A corporate turnaround is defined as a process to improve the financial, operational, and/or market performance of an underperforming company. In other words, it’s turning around a sinking business so it can get back on its feet.
While not every struggling company will be able to revive itself, there are several ways in which businesses can attempt to turn things around. Let’s take a closer look at the different approaches taken during a turnaround:
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Management Change
This approach involves removing key executives from their positions within the company. For example, a new CEO may be brought in who has more experience in that particular industry or has had previous success with similar companies. The idea here is that this change will strengthen the way the company operates and has an effect on its overall performance in a positive way.
Different Business Plan
Some businesses will change their business plan to better suit the current market conditions and/or customer needs. For example, if consumers are spending more money online instead of visiting retail stores, some companies may completely get rid of their brick-and-mortar locations or close down all underperforming stores. Doing this allows them to focus more on attracting new customers who prefer shopping online rather than establishing new physical storefronts that aren’t meeting expectations.
Restructuring Assets
Sometimes, struggling businesses will also restructure parts of their assets to make up for previous bad investments or poor management decisions. For example, they may choose to reduce expenditures by lowering costs or by selling off less profitable divisions of the business.
No matter which approaches a struggling business takes, they need to have viable solutions in place before beginning their turnaround efforts. This way, they are more likely to turn things around and improve their overall performance instead of just doing some damage control.
While some companies eventually fail even after taking one of these approaches, others will experience success with turning themselves around more often than not. Therefore, there are several factors that determine whether or not a company will be successful during its turnaround efforts including management efficiency, current market conditions, and timing, among other things.
How Can a Corporate Turnaround Expert Help?
If your business is struggling and you feel like you need professional help to revive it, you can hire a corporate turnaround expert like Michael Canzian. These professionals can offer the advice and guidance necessary for companies who want to bring about change within their organizations. In most cases, these consultants will work with struggling businesses as advisers or board members to provide them with the knowledge they need to improve their company’s performance as well as increase profitability.
While it’s true that not every business will successfully turn things around, there are many strategies available that can allow for this improvement. The main idea is that a struggling company must have management changes made if they expect to improve upon its current condition. It’s only through implementing innovative ideas and strong leadership that a company can hope to recover from a serious setback such as poor performance within an industry or lack of consumer interest.