Turnaround Management
Despite the best-developed strategies and business plans, a company may face a crisis due to unforeseen events: a drop in demand for a core product, the emergence of a new competitor or marketing channel, poor management, inflating costs, excessive growth in inventories, the loss of a key executive, etc. If not confronted quickly, the erosion of profitability and liquidity can create a financial crisis that threatens a company’s survival.
Companies entering a crisis stage too often delay the actions necessary to protect their competitiveness and profitability. Once in crisis, they are forced to engage accountants and attorneys to develop a financial restructuring plan. These experts frequently take a narrow focus, often to satisfy lenders and not shareholders. As a result, they commonly ignore the root causes of a highly complex situation and neglect the solutions that can restore business performance.
C3’s approach to turnaround management involves a close and timely collaboration with the company’s leadership team to develop an operating plan that defuses business risk and restores profitability. We rapidly develop a market-driven plan that addresses the cause(s) of a business crisis and prioritizes the decisions to buttress liquidity and enhance profitable performance. We ask and answer fundamental questions such as:
- What are the root causes of weakened performance?
- How can the company quickly adapt to a changed business environment – what will the end-state be?
- What business activities need to be retained and what needs to be jettisoned?
- What is the most prudent operating plan for a company to quickly execute in order to stabilize a business that is entering a crisis phase?
- How can the long-term economic value of a revitalized company be maximized?
Our approach typically produces a Stabilization Plan with the following deliverables for shareholders and management to act upon:
1. Threat Assessment including root causes of a business crisis
2. A Stabilization Plan with alternatives and recommendations
3. Detailed Financial Projections reflecting the financial impact of key decisions
4. Urgent Next Steps for management to jump start the turnaround process
5. Interim C3-level management support to execute the Stabilization Plan, including C3 resources if necessary
An early start (before the crisis is irreversible) and a compressed timeline for a consulting intervention are paramount. C3’s turnaround services bring a highly experienced team of executives with extensive skill bases and proven track records to develop, communicate, and assist the execution of a fact-based Stabilization Plan to restore profitable and sustainable growth.
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