Turnaround management is a dedicated towards corporate renewal. A CFO's duties are to do analysis and planning to save the troubled company and also to find reasons for failing performance in the market and rectify them. Thus when companies suffer troubles relating to cash flow crises, major losses etc., they require a financial professional to handle the turnaround requirements. There is an outline of steps involved and good understanding of this process will make it easier to identify when applied
Definition and analysis:In this process a clear definition of performance problems are defined and outlined. It helps in identification of the areas of financial stress within the business and steps to be taken.
Strategy to be adopted:once the business is stabilized, it is time to commence the strategic planning process. Also the SWOT analysis shall be done. it is important stage to look internally (strengths and weaknesses) but also to strategically analyses the external environment (opportunities and threats) as well. From SWOT analysis, the long term vision, mission and objectives for the business can be defined. Knowing where the business is heading then allows the development of a strategic plan.
Action and implementation:
the next step is development of action plan. The tasks are the daily, weekly and monthly activities to be done and with this strategic planning process, each one will be contributing to the overall mission. Without the implementation step, all the planning can go waste. It is important that employee are aligned with the overall vision for the business. This is achieved through communication, consultation on regular basis by the CFO of the company.
Review:the regular reviews are considered after the planning and implementation process. In effect the process of turnaround management is quite similar to the strategic planning, however there are some distinctive areas of stress. For upcoming of this stress, the consultation of turnaround management is required.