Cyril Moreau, the interim CEO and turnaround expert, leverages a planned approach to assess how far and how fast you need to change.
When does a business decide it needs to fundamentally change course or steer the risk altogether? Turnaround expert Cyril Moreau looks at some of the lessons learned during a typical interim CEO career.
“When the signs of potential failure become apparent, I am often approached by shareholders to review their business for its turnaround potential. They are almost always seeking answers to three fundamental questions:
Can the business be fixed?
What will it cost to get us back on track?
Is it worth paying?
There is certainly no magic formula to answer these questions, but many years spent around unsuccessful businesses have taught me that there are some steps that will help stakeholders make the very much needed difficult decisions.”
Assessing the Industry and Understanding the Commercial Environment:
The troubled business that is getting under the skin of the region, combined with adjacent industries, is going to expose potential areas of opportunity for future gains as well as give an overall picture of the company’s potential direction. It will begin to provide an indication of the scale of the challenge and the costs associated with getting back on the road to development.
Assessing the Company Properly:
It is important to identify significant liabilities and risks as well as significant assets from a strategic business point of view, and not just from a cash-value point of view.
This knowledge gained through research, relationships, intuition and experience will be used in the creative planning process as well as in the final assessment of risk versus reward.
Plotting A Course for Creative Planning and Long-Term Success:
The creative planning process involves assessing the ‘box of bits’, in which the company has to find out what can be done to make money in the short and long term.
It is important to remember that these two commercial timelines can generate different agendas, as short-term cash generic activities may not be sustainable or aligned with the strong strategic market position desired over the long term. However, a dual focus on both may be required during the turnaround to reduce the cash cost of running the business.
You need to have a clear view of whether it is worth the cost, effort and risk involved. You need to understand that the business will potentially be worth the shareholders who are considering turnaround funding. You need a road map to rule out the estimated travel time and any possible damage along the way.