How to Implement Turnaround Strategies PDF

How to implement Turnaround Strategies? [**Prashanth P.**](https://ng.linkedin.com/in/prashanth-puthran?trk=pulse-article_main-author-card) **Prashanth P.** **Prashanth P.**   3rd degree connection3rd Head of Finance - West Africa (Regional CFO) \| Executive Leadership \| Turnaround Strategist...

How to implement Turnaround Strategies? [**Prashanth P.**](https://ng.linkedin.com/in/prashanth-puthran?trk=pulse-article_main-author-card) **Prashanth P.** **Prashanth P.**   3rd degree connection3rd Head of Finance - West Africa (Regional CFO) \| Executive Leadership \| Turnaround Strategist \| Transformation enabler \| Corporate Finance \| FP&A \| Process Optimisation \| Risk & Compliance \| ESG \| Pharma & FMCG \| Retail Head of Finance - West Africa (Regional CFO) \| Executive Leadership \| Turnaround Strategist \| Transformation enabler \| Corporate Finance \| FP&A \|... Published Mar 10, 2022 [**[+ Follow]**](https://www.linkedin.com/signup/cold-join?session_redirect=https%3A%2F%2Fwww%2Elinkedin%2Ecom%2Fpulse%2Fhow-implement-turnaround-strategies-prashanth&trk=pulse-article_main-author-card__cta-button) ***One of the most common mistakes in business is the failure to realize that the future belongs to the competitor who is the first to identify and seize the new opportunities offered by emerging technologies.*** -- Peter F. Drucker This is one of the quotes I've pulled from Peter F. Drucker. I've read a lot of his books, and they are really well-written and very insightful. I like the quote because of its emphasis on innovation. Businesses, whether small or large, go through ups and downs. When a business is experiencing a downturn, it is important to implement turnaround strategies in order to get back on track. There are many different turnaround strategies that can be used, depending on the situation. Some of the most common turnaround strategies include cutting costs, increasing revenue, and restructuring the company. **What is a Turnaround Strategy?** A turnaround strategy is a set of strategies that are designed to rescue a failing business. This is a strategy that is implemented when the business is going into a spiral and is in a situation where it is at risk of closing. The turnaround strategy is a set of strategies designed to rescue a failing business. This means that you have to increase sales, reduce expenses, and increase profits. In order to successfully implement a turnaround strategy, it is important to first understand what caused the downturn. The current economic environment presents numerous challenges to manufacturers that have become acutely aware of the value of operational excellence. As manufacturers are forced to navigate an unpredictable, dynamic operating environment, they are increasingly implementing a variety of strategies to enhance their performance and increase efficiency. Companies must do more than simply react to the current conditions to avoid having their plans for future growth and profitability disrupted. Instead, this article will review examples of businesses that implemented strategies to generate cash, improve operational flow, and better position their businesses for the long term. In particular, we will analyze the steps taken to implement turnaround strategies. In my mind, there are five principles that should drive all turnaround strategies. -- The first is that you need to know why you're in trouble. -- The second is that you need to have a clear understanding of what you're trying to do. -- The third is that you need to understand what you're trying to achieve. -- The fourth is that you need to have a vision that defines what success looks like. -- The fifth is that you need to commit to being a high-growth company. -- The first one is your problem, the second one is your strategy, the third one is your purpose, the fourth one is your vision, and the fifth one is your culture. **Examples of Turnaround Strategies** Turnaround strategies are being used in different industries. **20 Questions -- A Global Franchising Company** A fast-food franchise company, 20 Questions, decided to expand internationally in 1991. 20 Questions' expansion strategy was to focus on countries that had high growth potential, good economies, high literacy levels and well-established networks for fast food. 20 Questions marketed fast food in 10 countries with their strategic plan being to expand into additional 10 countries. 20 Questions used the twenty questions as their main sales tool and focused on bringing in international franchisees. 20 Questions used franchising to overcome language barriers. **3M Company** In 1990, 3M Company was faced with declining demand for their products. 3M Company concentrated on its technological future of research and development and formed 3M Ventures which focused on developing new products and new markets. 3M Company also focused on new products and services and formed a marketing department. The marketing department was responsible for new product development and market development. **The Thermo King Corporation** The Thermo King Corporation faced declining demand for its truck trailer refrigeration equipment. Thermo King Corporation focused on two strategies to improve its financial position and market share. The first was to diversify into new product lines. Secondly, Thermo King Corporation needed to improve its research and development capabilities. **Aerospace Components** Aerospace Components faced declining demand for its space shuttle components. Aerospace Components then concentrated on product development and marketing. Aerospace Components also focused on diversifying into new markets. **The Ford Motor Company** Ford Motor Company faced declining demand for its cars. Ford company focused on manufacturing new products and developing new markets through diversification. Ford Company also focused on new product development and new product development. **The Deloitte & Touche Firm** Deloitte & Touche faced declining demand for their services. Deloitte & Touche focused on developing new products and developing new markets. Deloitte & Touche also focused on new product development. **Ford Motor Company** Ford Motor Company was faced with declining demand for their car factories. Ford Company concentrated on research and development. Ford Company also focused on new product development. **The Kimberly-Clark Corporation** The Kimberly-Clark Corporation faced declining demand for their product tissues. Kimberly-Clark Corporation focused on product development and market research. Kimberly-Clark Corporation also focused on developing new products. **The Canada Company** The Canada Company faced declining demand for its cigarettes. The Canada Company focused on creating new products and diversifying into other markets. The Canada Company also focused on new product development. **The Hershey Company** The Hershey Company faced declining demand for their product chocolate. The Hershey Company focused on expanding its product line. The Hershey Company also focused on diversifying into other markets. **The Eastman Kodak Company** The Eastman Kodak Company faced declining demand for their photographic films. The Eastman Kodak Company focused on diversifying into new markets. The Eastman Kodak Company also focused on new product development. **Types of Turnaround Strategies and its implications.** Turnaround refers to a set of actions aimed at rescuing a troubled organization from bankruptcy. Turnaround strategies include; mergers, acquisition, management buyout, refinancing, management change, personnel cuts, and re-organizing. Based on different circumstances, all turnaround strategies aim at overcoming difficulties, difficulties faced by companies because of mismanagement, excessive debt, low productivity, and asset decline. **Acquisitions, mergers, and takeovers **are transactions used to change the business of an organization. This transaction is either carried out to acquire control or to buy all or part of a company. Acquisitions happen for many reasons such as; a company may be facing financial difficulty, the management is corrupt, or the company is dying. Management buyouts are similar to acquisitions. This transaction takes place when shareholders buy out the management. This transaction takes place when the management buys out the shareholders. ; This transaction takes place when a group of investors buys a company\'s shares. This transaction takes place when a group of investors buy a company\'s shares. **Restructuring **is the process of reorganizing a business\' resources so that it can operate effectively. Restructurings are carried out when a business experiences financial difficulty when a company needs to change its strategic direction, when a company\'s profitability is declining, or when the company\'s management needs to change. Restructuring can be carried out through both financial and non-financial measures. Financial measures include reorganizing the business\' debt, reducing labour costs, reducing expenses, and boosting productivity. Nonfinancial measures include reorganizing the business\' human resources, reorganizing the business\' distribution channels, and improving the client base. **Management change **occurs whenever an organization makes changes in the composition, structure, and responsibilities of its top managers. This transaction takes place when a company\'s managers change, or when management restructures itself. The management change is carried out to improve the company\'s performance, when the management is not performing well, or when the business is facing financial difficulty. Personnel cuts take place when an organization reduces its workforce, or when it keeps some employees on a higher salary than is necessary. This transaction takes place when a company reduces its workforce, or when it keeps some employees on a higher salary than is necessary. Personnel cuts are carried out when a company faces a financial crisis, when a company\'s performance is falling, or when a company\'s management is not performing well. **Re-organizing **involves changing the structure of an organization so that the organization fits the needs of the business. This transaction takes place when a company is forced to change the structure of its operations, or when the organization restructures itself. Re-organizing is carried out when an organization faces a financial crisis, when an organization\'s performance is falling, or when an organization\'s management is not performing well. Re-organizing can be very costly. Re-organizing usually involves; shifting of responsibilities, moving resources, and exiting non-performing employees. Other types of turnaround strategies include; Going private transactions, Company Going Public, and the High Dividend Policy. **Value creation on the road to profit through Turnaround strategies.** Value creation is essential for any organisation looking to achieve and sustain profitability. The ability to create value for customers, employees and other stakeholders is a key factor in driving successful turnaround strategies. There are various ways to create value, but typically it involves finding new or better ways to meet customer needs or wants. This can be done by developing innovative products or services, improving the customer experience, or creating more efficient processes. Organisations that are able to successfully execute turnaround strategies often do so by generating increased value for their stakeholders. By focusing on value creation, businesses can improve their chances of achieving profitability and long-term success. **Impact of turnaround strategies and their sustainability in an unpredictable economic environment.** In order to assess the impact of turnaround strategies and their sustainability in an unpredictable economic environment, 32 organisations and 60 turnaround managers were interviewed. The researchers adopted the approach proposed by Davidson and Borgerson (1995). They analysed the interventions implemented, the changes in the systems and processes as well as key turning points, the reasons for them and their impact on the organisation. The organisations used several strategies: restructuring; disinvestment; privatisation; re-organisation; cost-cutting; innovation; and change. The turnaround managers\' role was pivotal in organisational success. However, in most cases, managers failed to realise the expected benefits from their interventions. Most managers conducted restructuring, disinvestment, privatisation and re-organisation procedures (67%), and up to 87% of them considered that organisational change was necessary. Cutting costs was implemented by 81% of managers. Higher management initiated innovation (55%) and change (70%), although only 18% and 40% of managers considered that innovation was necessary for organisational success, respectively. Only 42% of managers changed performance measures and KPIs. Almost half of the managers interviewed had not considered sustainability in their strategies. The sustainability of turnaround strategies depended on the measures applied, the value chain and the target customers. Organisational success depends on several variables, but the most important is the relationship between the organisation and its customers, which is reflected in the organisation\'s value proposition. Moreover, managers should think long-term and focus on the sustainability of the strategies. **Conclusion** Most of what we are discussing today are good examples of effective ways of tackling operational issues in a challenging environment. And in fact, we are convinced that all companies can benefit from the insights shared in this article, despite being in different stages of transformation. Turnaround strategies are important for businesses that are struggling. Implementing the right strategy can help revive a business and improve performance. There are many different turnaround strategies to choose from, so it is important to select the one that is best suited for the business. With careful planning and execution, a turnaround strategy can help a business rebound and become successful once again. Can be reached via email - 01prashanth\@gmail.com or a private message on LinkedIn if you would like to discuss this topic further.