In case the necessary corrective measures where either not taken at all or to a insufficient extent, the economic situation of an organizational entity may further deteriorate such that a full-fledged turnaround has to be implemented in order to save this entity.
Depending on the financial situation, the timing may become critical, such that drastic measures may have to be implemented in order to avoid the bankruptcy of a company.
In most cases, there was no single reason, which caused the financial problems of the company and therefore, a vast array of mesasures is often necessary to achieve a turnaround. Thus, a turnaround requires typically a comprehensive program management to implement the different actions.
Cost reductions may be required to start with, and they may bring some 'quick wins', but more often, they will not suffice to achieve a sustainable turnaround. More important are the measures to improve the top-line in terms of volume and/or quality.
In line with these measures, the structures and processes may need to be adapted, and/or it may be required to optimize existing processes in terms of Operational Performance / Business Excellence, or even a completly new set of processes may be inevitably to implement a Lean Management Approach.
As all these activities have to be managed in parallel to the operational management,
and at the same time the moral of the staff has to be maintained, it becomes evident that leadership is the decisive factor for the success of a turnaround. The two most important aspects in this respect can be summarized by the following two 'take home messages' :
The best idea is worthless as long as it is not implemented !
A turnaround can only be achieved 'together with the people' but never 'against the people', as the management and the employees are the ones, who will implement the turnaround actions !
Executed turnaround assignments are :