Weathering the storm <ul><li>Restructuring to turn struggle into success  </li></ul><ul><li>by Alex Boyd </li></ul><ul><li...
What is  ‘restructuring’? <ul><li>The news programmes are all about the economic downturn and how we are gripped by the wo...
Aim <ul><li>The aim of this presentation is to explain the phases of restructuring in order to provide a platform for furt...
When to  ‘restructure’ <ul><li>Have you lost contracts? </li></ul><ul><li>Is there a change in your management? </li></ul>...
Phases of restucturing
Purpose
Stabilise – listen to the cash flow <ul><li>Analyse overall cash position – create timely reports </li></ul><ul><li>Review...
If in doubt, adopt Weinstock ’s ratios <ul><li>Arnold Weinstock took GEC from a turnover of £100m to £11bn in his tenure. ...
Improve – refine processes and procedures Adopt transparent reporting – ensure all know position and current phase of orde...
Strategise – action will change circumstances Getting it wrong will ensure you drop short of desired goals but getting it ...
Can you design the new paradigm? <ul><li>The economies of supply and  demand will never  </li></ul><ul><li>change, but the...
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Restructuring

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Restructuring

  1. 1. Weathering the storm <ul><li>Restructuring to turn struggle into success </li></ul><ul><li>by Alex Boyd </li></ul><ul><li>Dalton Byrne </li></ul>
  2. 2. What is ‘restructuring’? <ul><li>The news programmes are all about the economic downturn and how we are gripped by the worst recession since the 1930 ‘s. Having enjoyed enormous growth over the past decade, a new approach is now required to address these challenges. Talk of ‘restructuring’ is common but what is it? </li></ul><ul><li>Although it is a relatively new term, the approach is time-honoured and has been used by various parties over the years, be they ‘company doctors’, ‘turnaround specialists’ or many others of that ilk. </li></ul><ul><li>It is an approach that is designed to place the organisation back on a firmer footing in order to continue trading to the next phase in its lifecycle, be it sale, acquisition of others or merely profit growth. </li></ul>
  3. 3. Aim <ul><li>The aim of this presentation is to explain the phases of restructuring in order to provide a platform for further discussion </li></ul>
  4. 4. When to ‘restructure’ <ul><li>Have you lost contracts? </li></ul><ul><li>Is there a change in your management? </li></ul><ul><li>Do you feel that your current management isn ’t delivering? </li></ul><ul><li>Do you rely on a key supplier? </li></ul><ul><li>Have your customer relations worsened? </li></ul><ul><li>Are your margins turning downward? </li></ul><ul><li>Do you suffer from a recently restricted cashflow? </li></ul><ul><li>Is the market leaving you behind? </li></ul>
  5. 5. Phases of restucturing
  6. 6. Purpose
  7. 7. Stabilise – listen to the cash flow <ul><li>Analyse overall cash position – create timely reports </li></ul><ul><li>Review customers – credit delineation and societal shift </li></ul><ul><li>Working capital – reduction of receivables and inventory </li></ul><ul><li>Overall financial structure – reduction of debt and choice of funding </li></ul><ul><li>War on cost vs. efficiency – take position on tolerance and inform staff </li></ul>
  8. 8. If in doubt, adopt Weinstock ’s ratios <ul><li>Arnold Weinstock took GEC from a turnover of £100m to £11bn in his tenure. He managed over 180 companies by ensuring they all worked to the same ratios: </li></ul><ul><li>He also paid attention to the return on equity and capital, amongst others. </li></ul><ul><li>Today he has been knocked for being too dogmatic but he knew how to build a strong cash position, which might prove helpful in times of constrained credit. </li></ul>
  9. 9. Improve – refine processes and procedures Adopt transparent reporting – ensure all know position and current phase of order (sales  development  delivery  invoice) Implement accountability – define allocation of tasks, clear handover procedures and overt acknowledgement of order status Make staff responsible – instill team effort to achieve restructuring on downside (pay freeze?) and upside (share options?)
  10. 10. Strategise – action will change circumstances Getting it wrong will ensure you drop short of desired goals but getting it right will steal the necessary march on competition Is your product range or price structure robust for a longer recession? Can you use alternate marketing methods? Have strategic partnerships yielded positive results? Can the media assist and if so, how to get their attention? Have you ridden the explosion of Web 2.0?
  11. 11. Can you design the new paradigm? <ul><li>The economies of supply and demand will never </li></ul><ul><li>change, but the world has. </li></ul><ul><li>There are more than ten times the amount of </li></ul><ul><li>searches on Google than thwider ere were three </li></ul><ul><li>years ago. People have far access to </li></ul><ul><li>information than every before and thus their </li></ul><ul><li>attention to one product is considerably shorter. </li></ul><ul><li>It took radio 38 years to reach an audience of 50 </li></ul><ul><li>million, Facebook only 2. </li></ul><ul><li>Everyone with experience of restructuring will acknowledge that there isn ’t a ‘one size fits all’ approach. We all need to be flexible in our methodologies providing an objective diagnostic review and involving the current management. </li></ul><ul><li>But will it be enough? </li></ul>

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