The slowdown of economic activity caused by the COVID-19 outbreak and measures implemented to reduce the spreading of the pandemic have led to challenging times for businesses. As economies emerge from their initial lockdown periods, the route to recovery is unlikely to be smooth, and businesses need to be in the best possible shape for the journey.Know more
In light of these circumstances and assuming that economic conditions will most likely be challenging in the foreseeable future, Eight Advisory is eager to share their expertise and provide you with 6 success factors to improve the profitability of your business and arise from the storm, stronger than ever before.
Last year, Eight Advisory traced the path of a sample of companies that decided to carry out a turnaround plan after underperformance.
We found that a number of those fared significantly better than the rest and got intrigued.
What made them different? Was it just sheer luck?
Through a survey of 36 questions, followed by a group discussion with renowned experts, we were able to put together some remarkable characteristics in how you as a company can weather the storms.
Based on our results, we are keen on providing you 6 success factors to restore the profitability of your business and enable you to arise stronger than ever.
Let’s kick off with the core insights.
Even the greatest business leaders can miss the first signs of distress. The very first step is to be able to recognize there is a problem. Today, the decision to start a recovery plan or turnaround plan often comes too late. Learn how to identify the key signs for distress and act, while you still can.
Top 3 signs for distress
Each new plan needs to be sufficiently financed in order to be successful.
The results of our survey clearly state that the most effective turnaround plans included a cash injection. However, we should not assume this new money only comes from existing shareholders as alternative financing sources are a possibility as well. At the end of the day, new money is balance between various stakeholders.
Needless to say, management involvement is one of the key success factors of a successful turnaround plan. In addition to that, our study showed that your turnaround plan might be more successful when changes in the executive committee are made.
Not only because most managers struggle to make the shift in mindset needed to make radical changes, but also because a brand-new executive committee can bring the change in dynamic your company needs.
In addition, you may also need to seek a temporary reinforcement of your management team, a Chief Restructuring Officer can support the effectiveness of your turnaround plan.
Your number one priority to avoid a distressed situation is to systematically review your business plan and start your turnaround with a thorough initial review in parallel with a financial, operational and strategic analysis of your business.
To ensure the effectiveness of your turnaround plan, ambition is key, but you should remain realistic.
Be ambitious in your operational actions to ensure their effectiveness.
Speed is a determining factor of a successful turnaround. Most successful turnaround plans are achieved in a timeframe of less than two years.