I would like to share with you the 12 most important lessons for carrying out corporate restructuring or recovery assignments. The lessons are based on many years of experience and, to be quite honest, learned through bitter experience. I will now briefly summarise the key lessons in the white paper for you.
Strategies for weak & crisis ridden businessesApoorwaJaiswal
A firm in an also-ran or declining competitive position has four basic strategic options:
a. Offensive turnaround strategy – If it can come up with the financial resources, it can launch an offensive turnaround strategy keyed either to low cost or new differentiation themes
b. Fortify-and-defend strategy – Using variations of its present strategy and fighting hard to keep sales, market share, profitability, and competitive position at current levels
c. Fast-exit strategy – Get out of the business either by selling out to another firm or by closing down operations if a buyer cannot be found
d. End-game or slow-exit strategy – Keeping reinvestment to a bare bones minimum and taking actions to maximize short-term cash flows in preparation for an orderly market exit
CORE CONCEPT: The strategic options for a competitively weak company include waging a modest offensive to improve its position, defending its present position, being acquired by another company, or employing an end-game strategy.
Welsh Consultants publishes- Many firms today face with organizational declines at some point in their life cycles because of both external and internal factors. Most often organizations enter the state of decline when they fail to anticipate, recognize and adapt to external and internal pressures that threaten the organization’s existence. As one of the important factors leading firms to decline, crises represent a significant threat to firms’ high priority values and demand a time-pressured response. As an alternative response to the times of crisis, operating turnaround strategies are targeted to enhance a firm’schances of ending the threat and achieving sustainable performance recovery. Operating turnaround strategies can be defined as the set of consequential, directive decisions and actions aiming to reverse a declining business as quickly as possible through asset reduction, cost cutbacks and revenue generating The conceptual scope of this article is determined as examining operating turnaround strategy and its variants in a theoretical frame by reviewing literature. Author, Founder- Manish P
Companies have traditionally sought to create shareholder value through the process of addition. They build broad-based business portfolios via growth strategies or product innovation, and bulk up through mergers and acquisitions. In this market cycle, however, investors seem to prefer simpler and clearer business models to complicated stories. As a result, there is rising pressure — and increasing opportunity — to add value through subtraction. In an effort to provide more compelling value propositions, many companies have pursued a broader and less traditional range of structural options that simplify matters and clarify business priorities: divestments, and the spin-outs of business units or assets into real estate investment trusts, master limited partnerships, or yield companies (“yieldcos”), which provide stable and more predictable cash flows.
Each of these “carve-out” mechanisms has a place in the portfolio of strategic reconstruction, depending on its applicability to the asset base or business. In recent years we have seen their adoption in transactions such as Duke Energy’s spin-out of Spectra Energy, CenterPoint Energy’s and OGE Energy’s IPO of Enable Midstream Partners, and NextEra Energy’s formation of its yieldco, NextEra Energy Partners. The positive market reception to these carve-outs when they occurred highlights how nontraditional restructurings can unlock value in unique ways.
But restructuring or separating business units to match investor sentiment is often neither simple nor certain. Smart companies are finding that the early recognition and consideration of the challenges that accompany a carve-out can avoid unwelcome surprises later.
Strategies for weak & crisis ridden businessesApoorwaJaiswal
A firm in an also-ran or declining competitive position has four basic strategic options:
a. Offensive turnaround strategy – If it can come up with the financial resources, it can launch an offensive turnaround strategy keyed either to low cost or new differentiation themes
b. Fortify-and-defend strategy – Using variations of its present strategy and fighting hard to keep sales, market share, profitability, and competitive position at current levels
c. Fast-exit strategy – Get out of the business either by selling out to another firm or by closing down operations if a buyer cannot be found
d. End-game or slow-exit strategy – Keeping reinvestment to a bare bones minimum and taking actions to maximize short-term cash flows in preparation for an orderly market exit
CORE CONCEPT: The strategic options for a competitively weak company include waging a modest offensive to improve its position, defending its present position, being acquired by another company, or employing an end-game strategy.
Welsh Consultants publishes- Many firms today face with organizational declines at some point in their life cycles because of both external and internal factors. Most often organizations enter the state of decline when they fail to anticipate, recognize and adapt to external and internal pressures that threaten the organization’s existence. As one of the important factors leading firms to decline, crises represent a significant threat to firms’ high priority values and demand a time-pressured response. As an alternative response to the times of crisis, operating turnaround strategies are targeted to enhance a firm’schances of ending the threat and achieving sustainable performance recovery. Operating turnaround strategies can be defined as the set of consequential, directive decisions and actions aiming to reverse a declining business as quickly as possible through asset reduction, cost cutbacks and revenue generating The conceptual scope of this article is determined as examining operating turnaround strategy and its variants in a theoretical frame by reviewing literature. Author, Founder- Manish P
Companies have traditionally sought to create shareholder value through the process of addition. They build broad-based business portfolios via growth strategies or product innovation, and bulk up through mergers and acquisitions. In this market cycle, however, investors seem to prefer simpler and clearer business models to complicated stories. As a result, there is rising pressure — and increasing opportunity — to add value through subtraction. In an effort to provide more compelling value propositions, many companies have pursued a broader and less traditional range of structural options that simplify matters and clarify business priorities: divestments, and the spin-outs of business units or assets into real estate investment trusts, master limited partnerships, or yield companies (“yieldcos”), which provide stable and more predictable cash flows.
Each of these “carve-out” mechanisms has a place in the portfolio of strategic reconstruction, depending on its applicability to the asset base or business. In recent years we have seen their adoption in transactions such as Duke Energy’s spin-out of Spectra Energy, CenterPoint Energy’s and OGE Energy’s IPO of Enable Midstream Partners, and NextEra Energy’s formation of its yieldco, NextEra Energy Partners. The positive market reception to these carve-outs when they occurred highlights how nontraditional restructurings can unlock value in unique ways.
But restructuring or separating business units to match investor sentiment is often neither simple nor certain. Smart companies are finding that the early recognition and consideration of the challenges that accompany a carve-out can avoid unwelcome surprises later.
Retrenchment strategy - A retrenchment strategy is a corporate-level strategy that aims to reduce the size or diversity of organizational operations. At times, it also becomes a means to ensure an organization’s financial stability. This is done by reducing the expenditure. A retrenchment strategy is a design to fortify an organization’s basic distinctive competence.
In other words, the strategy followed, when a firm decides to eliminate its activities through a considerable reduction in its business operations, in the perspective of customer groups, customer functions, and technology alternatives either individually or collectively are called a Retrenchment strategy.
Retrenchment meaning - A cutting down or back; reduction.
A curtailment of expenses, A retrenching; esp., a reduction of expenses, A rampart or breastwork within the main fortification.
Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees.
Types of Retrenchment strategies - 1. Turnaround 2. Disinvestment 3. Liquidation.
Turnaround - Turnaround strategy means backing out, withdrawing, or retreating from a decision wrongly taken earlier to reverse the process of decline.
Certain conditions or indicators point out that a turnaround is needed if the organization has to survive.
Divestment - Divestment strategy involves the sale or liquidation of a portion of the business, or a major division, profit center, or SBU. Divestment is usually a restructuring plan and is adopted when a turnaround has been attempted but has proved unsuccessful or ignored.
Liquidation - Liquidation strategy means closing down the entire firm and selling its assets. It is considered the most extreme and the last resort because it leads to serious consequences such as job loss, termination of opportunities where a firm could pursue any future activities, and the stigma of failure.
This presentation gives the author's views on why he became an interim manager, what interim management means as a career and the current status of interim management in the UK.
Creating a business continuity plan so that your business can survive in a crisis and develop mitigation strategies that they can use to get back to normal as quickly as possible
The scope of governance's concern naturally exceeds the scope of production performance, representing a need to protect opportunity above and beyond performance targets. Innovation targets the expansion of opportunity, but inappropriate performance management will hold it back.
Highly experienced no-nonsense Interim Managing Director, operating for over 25 years at Board level in small to medium sized companies based in the UK and Europe. Proven "hands on" turnaround, rescue and refinancing expert with successess in manufacturing and process industries.
See my blog for commentary
http://www.e8consulting.com/blog/practiceareas/projectgovernance/boardroom-readiness-for-business-project-governance?preview=true&preview_id=307&preview_nonce=666c7f0fa3
Retrenchment strategy - A retrenchment strategy is a corporate-level strategy that aims to reduce the size or diversity of organizational operations. At times, it also becomes a means to ensure an organization’s financial stability. This is done by reducing the expenditure. A retrenchment strategy is a design to fortify an organization’s basic distinctive competence.
In other words, the strategy followed, when a firm decides to eliminate its activities through a considerable reduction in its business operations, in the perspective of customer groups, customer functions, and technology alternatives either individually or collectively are called a Retrenchment strategy.
Retrenchment meaning - A cutting down or back; reduction.
A curtailment of expenses, A retrenching; esp., a reduction of expenses, A rampart or breastwork within the main fortification.
Retrenchment is the termination of employment initiated by the employer through no fault of and without prejudice to the employees.
Types of Retrenchment strategies - 1. Turnaround 2. Disinvestment 3. Liquidation.
Turnaround - Turnaround strategy means backing out, withdrawing, or retreating from a decision wrongly taken earlier to reverse the process of decline.
Certain conditions or indicators point out that a turnaround is needed if the organization has to survive.
Divestment - Divestment strategy involves the sale or liquidation of a portion of the business, or a major division, profit center, or SBU. Divestment is usually a restructuring plan and is adopted when a turnaround has been attempted but has proved unsuccessful or ignored.
Liquidation - Liquidation strategy means closing down the entire firm and selling its assets. It is considered the most extreme and the last resort because it leads to serious consequences such as job loss, termination of opportunities where a firm could pursue any future activities, and the stigma of failure.
This presentation gives the author's views on why he became an interim manager, what interim management means as a career and the current status of interim management in the UK.
Creating a business continuity plan so that your business can survive in a crisis and develop mitigation strategies that they can use to get back to normal as quickly as possible
The scope of governance's concern naturally exceeds the scope of production performance, representing a need to protect opportunity above and beyond performance targets. Innovation targets the expansion of opportunity, but inappropriate performance management will hold it back.
Highly experienced no-nonsense Interim Managing Director, operating for over 25 years at Board level in small to medium sized companies based in the UK and Europe. Proven "hands on" turnaround, rescue and refinancing expert with successess in manufacturing and process industries.
See my blog for commentary
http://www.e8consulting.com/blog/practiceareas/projectgovernance/boardroom-readiness-for-business-project-governance?preview=true&preview_id=307&preview_nonce=666c7f0fa3
An estimate of the value of IT Project Governance based on the best available research data. The suggestion is that between performance can be improved by 4-8 times which is the equivalent to 1-3% of GDP at a national level.
A tightening of funding, new owners, changes in technology, pressure on performance or a struggling business model are all very different scenarios but they often lead to the same conclusion: the need for restructuring.
Rapid and significant improvements in business performance are elusive. Restructuring can easily go wrong or fail to achieve the results hoped for at the outset. This book, published by management consultancy Collinson Grant, contains many tips on how to avoid the common pitfalls.
It has been written from the point of view of an agent of change who wants to lead a turnaround in profitability. Examining in detail the commercial and managerial skills needed, the text provides a stage-by-stage blueprint covering diagnosis, planning and implementation, illustrated by numerous diagrams.
Written by Collinson Grant's consultants, it draws on their experience of restructuring large businesses in Europe, the USA and worldwide, including projects to integrate acquisitions or merge operations, change the organisational structure, reduce costs, improve profit, and manage transition.
Find out more at www.collinsongrant.com or get a hard copy of this book by emailing pmackenzie@collinsongrant.com
Interim Management Managing For Profits During Trying TimesCarl Cassidy
The market place has changed. It's no longer business as usual, North America is now following Europe and the UK in hiring Interim Managers. These are fully accredited Executives and Mid Level Managers working on an interim assignment or project only basis. Extra Help when needed, none of the costs when businesses don't!
Turnaround and succession planning methodologies, including business recovery pre-insolvency. This guide is part of the MF Turnaround Manual. The manual is designed for accounts and professionals wishing to develop operational turnaround skills.
St -rregy for the critical first 90 days of leadershipMi,ae.docxdessiechisomjj4
St -rregy for the critical first 90 days of leadership
Mi,\ael Watkins
Strate gt & Leaders hip ; 2004; 32, l ; ABVINFORM Global
p g . l 5
Adapted with permission of Harvard
Business School Press. The First 9A
Days: Critical Success Strategies for
New Leaders at AII Levels, by Michael
Watkins. O 2003 Michael Watkins.
All rights reserved.
he actions you take during your first three months in a new job will largely determine
whether you succeed or fail in the long term. Estimates of the direct and indirect costs to
: a company of a failed executive-level hire range as high as $2.7 millron[1]. But the goal of
every new leader should be transition acceleration not just failure prevention.
Think about the implications of more effective transition management not just for you but also
for your organization. ln a survey of company presidents and CEOs, I asked for their best
estimate of the number of people whose pedormance was significantly compromised by the
arrival of a new mtd-level manager. The average of their responses was 12,4 people[2]. ln effect,
all the people in the "impact network" of the transitioning manager are in transition too.
Every minute you save by being systematic about accelerating your transition is a minute you
gain to build the business. This article offers a proven blueprint for addressing the linked
challenges of personal transition and organizationaltransformation that confront leaders in their
first few months in a new job.
From observing new leaders and experimenting with methods of accelerating transitions, I have
developed a number of conclusions about the challenges of transitions and what it takes to
successfully meet them. These can be summarized in five propositions:
(1) The root causes of transition failure always lie in a pernicious interaction between
the situation, with its opportunities and pitfalls, and the individual, with his or her
strengths and vulnerabilities. Failure is never just about the flaws of the new leader.
Transition failures happen when new leaders either misunderstand the essential demands of
the situation or lack the skill and flexibility to adapt to them,
(2) There are systematic methods that leaders can employ to both lessen the likelihood
of failure and reach the breakeven point faster Consider, for example, making a
transition from functional vice president to general manager, Every leader who makes this
leap encounters similar challenges, such as the need to let go of reliance on functional
expertise.
(3) The overriding goal in a transition is to build momentum by creating vinuous cycles
that build credibility and by avoiding getting caught in vicious cycles that damage
credibility. The new leader, to be successful, will have to mobilize the energy of many
VOL. 32 NO. 1 2004, pp. 15-20, Emerald Group Publishing Limited, ISSN 1087-8572
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
P A G E 1 5
P A G E 1 6
others i.
In this paper author Nicholas Assef covers the benefits of private companies adopting a private equity mindset to consider strategies that should be adopted and actions that should be taken in planning to sell their company.
In particular this encourages the Private Company directors & shareholders to step outside of their day to day operations and reflect on the way the Company will be seen by external parties. Once this assessment has been made then adjustments can be made with plenty of time in order to optimise the business case.
Driving a business to a successful exit is a matter of science and not good fortune.
On March 30, the Corporate Learning Network held its long awaited Drucker Master Class Day – led by celebrated Drucker management guru, Dr. Bernard Jaworski, Professor at the Peter F. Drucker and professor at the Peter F. Drucker and Masatoshi Ito Graduate School of management.