Turnaround Management- Meaning and Steps
Meaning of Turnaround Management
The process of Turnaround Management can be defined as the process of reviving a company that is struggling from the financial problems to keep up with competition in the market and there comes a time when the management of the company needs to put the process and strategic approach of Turnaround Management plan in place.
The main and crucial key elements of the Turnaround Management include analyzing, planning, and then implementing the plan to save the company from all the bottlenecks and obstacles that it is facing. However, the realities of turnaround management are that it is quite slow, complex, and difficult process in nature and its overall implementation.
Turnaround Management is all about the restricting and renewal of the business. Often, this strategy is employed when the business is under financial stress. However, it is not necessary to wait till the situation becomes too complicated to commence the turnaround Management strategy.
Steps of Turnaround Management
Step 1 – Define & Analyse :
During the first and foremost stage, the definition of performance problems within the business are clearly defined and outlined. It is particularly important during this step that any areas of financial stress within the business are identified through the intricate analysis and in-depth study. The main aim and objective of this are to stop any further decline in the business while continuing to trade and avoid insolvency of the business.
Step 2 – Scope & Strategy:
Once the business is stabilized, now is the time to start with the strategic planning process. The first part of this is to scope the strengths, weaknesses, opportunities, and threats of the business.
It is important during this stage to not only look internally (strengths and weaknesses) but to strategically analyze the external environment (opportunities and threats) in a dedicated manner. Through the process of the SWOT analysis, long-term vision, mission, core values and objectives for the business can be defined in a better way. Knowing where the business is heading allows the development of a strategic plan and its overall implementation in an effective fashion.
Step 3- Link & Action:
Next step in the line is to take the strategic plan and develop into an action plan. This is a list of actions and tasks that are to be completed within the stipulated time frames that must be undertaken to attain the business goals and objectives. The tasks are divided on the basis of the daily, weekly, and monthly activities that are to be completed and with this strategic planning process, each one will be contributing to the overall mission of the organization.
Step 4 – Implement:
This step is not just about implementing the action plan, but also ensuring all the required coaching and support of all staff and employees of the organization. Without this critical step, all the planning can go to waste and down in dumps. It is quite crucial that employees are aligned with the overall vision and mission of the business. This is achieved through clear communication, dedicated consultation, and coaching on a regular basis to all the employees.
Step 5- Review:
With all the planning and implementation in place, the next step of the Turnaround Management demands to conduct regular reviews. This ensures not only that continual improvement is achieved but also helps to identify any corrective actions that may be needed within the overall process and operations of the business.
The process of Turnaround Management is quite similar to the strategic planning process; however, the first step in identifying areas of stress in the business is very critical to figure out. For any business where this stress is already occurring, applying the turnaround process, in consultation with a Turnaround Management experts, will not only ensure the business turnaround but also the opportunity to improve and grow in the future with the learning curve and streak of success.
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