Quite typical, many distressed companies turn for help only at the brink of belly-up. At that stage, the means of a turn-around are scarce. However, for a change consultant the old rule of thumb, 100 days, matters. In 100 days you must be able to make a difference.
We recently finished a turn-around. When we arrived at the scene, the discussions of throwing in the towel had already started. The cash flow was highly negative, key people were leaving the ship, the management was next to total burn-out, the focus was gone and so were the business inquiries, and, on top of all, the owners were far from being on the same page. The business as such was healthy, a good product and a good service that could be sold with a decent margin. Nevertheless, a quite recent foreign acquisition at a ludicrous price, combined with a minimal order intake due to a significant decline in the main market, had pulled the rug out from underneath any business rationale. The company suit was not even close to slim fit. The management was reluctant to take the tough decisions of serious down-sizing as it was still hoping for a miraculous business take-off.
The 100 day project was an act of balancing cash flow, reshaping the company and generating orders. The early days were a matter of negotiating with the financers not to pull out the plug, but instead remaining confident that the company can be saved, motivating the staff and the management to hold on at the same time as financial benefits were cut and colleagues had to go, convincing subcontractors to continue deliveries and that payments will be paid once temporary hick-ups stop, and offering incredible deals to existing customers to keep the factory going at break-even levels. Eventually the focus moved to strategic issues like re-branding and re-positioning, that is, blowing new air into an outdated look and focusing all efforts into one business category. It needed to be shown to all parties involved that there is an afterlife, once the short term distress is managed the future starts to look bright. Then internal processes were built from scratch, including sales processes, delivery processes and after sales processes. The sales tool box was introduced, including issues like argumentation, policies, targeting, reporting, CRM, customer charter and sales material. At the end of the project, new business models were initiated, new sales people were recruited, management structures were set and restructuring discussion were initiated with outside parties.
Today the company is doing alright. Work still remains to be done, but the business is on solid ground. The order intake is better than in many years, the new sales management is fully trained and equipped with good sales tools, the geographical scope has changed to more lucrative areas, the financing is secured, numbers are back in the black, and the new visual brand looks fresh and appealing for new customer segments. We pulled out after 85 days and feel happy to say that another turn-around was concluded. Experienced outsiders can help, assuming they get a real mandate to initiate and manage change.