Some of my notes on how to execute a turnaround with a full scheme and several of my field experiences

1. My TURNAROUND
KEYNOTES
April 2009

2. WARNING
Turnarounds
Turnarounds
are to be
are to be
executed by
executed by
specialists
specialists
only…
only…

4. Don’t run to escape your troubles…
TURN AROUND AND SOLVE THEM !

5. This is not a handbook but
just a listing of things that
needs to be looked at !

6. Explaining each issue of a turnaround
would take more than 300 slides and
around 950 if going in detail - so I just
took some of the elements I experienced
in my previous interim roles and created
60
one of slides.

7. First step
Detect the thing that is killing the
company
Products and services
Sales
Customer base
Purchasing/Logistics
Finance
Staff (employee conflicts)
Support

8. REMEMBER
There is the perceived cause… and the real
cause.

9. REMEMBER
Experts and people
can point to a
perceived problem…
but you need to find
the real pointer out
of the screen !

10. DO NOT FORGET
In almost all cases… you need numbers.
As you are called in for a crisis situation, ALL
numbers have to be bad. If not, you have the
wrong numbers so fix it before you continue.
But in some, your need to measure
perception and feelings.
How do clients estimate you ? Why do they trade
with you ?
Are your employees happy ? What bothers them ?

11. THE fULL
ACTIVITY SCHEME
Is just on the next slide …
(… simplified version !!!)

12. Product
Research & Product
Portfolio Operating
Delivery Life
Sales
Stock Opportunity Development
range quality
quality Cycle
detecting Excellence
Cash Mgmt
PURCHASING & PRODUCTS
Revenue & Fault and
LOGISTICS & SERVICES
Margin Service
handling
Request
Discounts
handling
SUPPORT
Additional
FINANCIALS Open
sales
issues
IMPROVEMENT
IMPROVEMENT
Sales Mix
ROADMAP Employee
ROADMAP
Outstanding satisfaction
debts
MANAGEMENT
Competences
STAFF
Shareholders
Team spirit
CUSTOMERS SALES
Executive
Retention
Mix
Use of
Image & Customer Delivery Order Routes to Market
Forecast existing
Perception satisfaction accuracy intake market penetration
solutions

13. The problem… you
need to TACKLE
every item…
Starting with the most
urgent and/or critical one

14. Product
Research & Product
Portfolio Operating
Delivery Life
Sales
Stock Opportunity Development
range quality
quality Cycle
detecting Excellence
Cash Mgmt
PURCHASING & PRODUCTS
Revenue & Fault and
LOGISTICS & SERVICES
Margin Service
handling
Request
Discounts
handling
SUPPORT
Additional
FINANCIALS Open
sales
issues
IMPROVEMENT
IMPROVEMENT
Sales Mix
ROADMAP Employee
ROADMAP
Outstanding satisfaction
debts
MANAGEMENT
Competences
STAFF
Shareholders
Team spirit
CUSTOMERS SALES
Executive
Retention
Mix
Use of
Image & Customer Delivery Order Routes to Market
Forecast existing
Perception satisfaction accuracy intake market penetration
solutions

15. Do you know
Which one causes
you the problems ?
There is one visible cause… and one
hidden. And they are never the same !

16. THE AUDIT
THE EASY THING TO SAY…
YOU HAVE TO CHECK EVERYTHING
THE MORE COMPLEX THING…
YOU ARE IN AN EMERGENCY SITUATION SO
YOU DO NOT HAVE THE TIME TO EXECUTE
A FULL AUDIT…
WHILE SEVERAL PEOPLE WILL SUPPLY
YOU WITH WRONG DATA…

17. An extreme CASE
It arrived to me in the year 2000…in less
than 2 hours time… I was already
executing the emergency rescue of the
company
Read: http://vanrompay.online.fr/pages/firstdaypag.html

18. THEN YOU HAVE TO ACT
Make the right mix between
STRATEGY
This is what learn in business schools…
TACTICS
Read Sun-Tsu
“The Art of War”

19. AND always
INDICATE where
you ARE HEADING

20. 1- STAFF ISSUES

21. STAFF
Measure and estimate
Employee satisfaction
Competence
Team spirit
Retention
Find the hidden people that
influence the teams in
your company

22. STAFF issues
Try an employee satisfaction survey that is
close to the staff (watch out as this action
can be perceived negatively)
With the results, create an action plan
Act and be extremely clear in what you say (and
write).
Motivate or de-motivate them (depending on the
situation).

23. ONE OF MY FIELD EXPERIENCES
Previous employee surveys and action
plans did not deliver results…
My solution : field intervention
I spend one full day with each team as an
“apprentice”…
One full day in the factory (cutting metal plates)
One full day in the warehouse (driving forklifts)
One full day in assembly (screw-driving)
One full day load/unloading trucks
One full day at accounting and order supply

24. MY BUSINESS TESTIMONY
RESULT: A FULL ENGAGEMENT
I knew how the company worked and the
things that needed improvement
The employees had confidence in the
changes we needed to implement

25. 2- FINANCE ISSUE

26. Finance CASH EMERGENCY
Get a quick « P&L » view of the
situation
But start with CASH MANAGMENT
How much cash do I have ?
How much debt do I have ?
How much cash can I collect ?
How much invoices can I delay ?

27. CASH MEANS… LACK OF TIME
The major enemy of finance is TIME
So ask yourself how your CASH is/will be
In a timeframe of one week
In a timeframe of one month
In a timeframe of 3 months

28. CASH INTERVENTION TEAM
Create a dedicated team to get CASH
From your clients
Executive level : contract negotiations
Sales director : negotiating the right contract-delays
Accounting : respecting payment dates
Everyone has to ACT – from the CEO, CFO
… to the PEOPLE IN ACCOUNTING…

29. MY FIELD TESTIMONY
Software distributor having severe
cash-troubles (accounts closed)
New organization with the COO
directing personally a cash-crisis team
that managed in 6 weeks time :
To collect 90% of non-payments (= 12% of
annual revenues)
Renegotiate the payment delays with our 2
main clients (from 60 days to 15 days)
Worked with sales to propose new sales
propositions

30. CONCLUSION
Things had to be solved INSTANTLY so
No time for an audit
No time to put in additional reporting systems
A team focused on “CASH”
The action was oriented towards
Getting cash where the cash was
Lots of phone-calling
… and at the same time
industrializing the whole
“cash-collecting” process

31. POSITIVE
The company now had a good cash-collecting
system
Positive element : It re-inforced the relationship
with the clients
The implementing of new tools and
procedures were seen as a need so
it became an ongoing process.. Not
a special project.

32. What to do ELSE ?
List the things where you can
cut costs without losing value
Different internal organization
Human resources : why not offshore all
regular treatments (salary slips…)
Accounting : invoicing/payments…
Normal objective : cut
operational charges by .. % and
gain .. % more efficiency

33. 3- SUPPORT
SERVICE PROBLEM

34. SUPPORT PROBLEMS
Normally, the support service is
a FRONT LINE SERVICE that
relies completely on the BACK
OFFICE SERVICES
Unless understaffed or a lack of
knowledge management tools,
you have to detect the problem
elsewhere…
I am sure you know pretty client-services
that don’t give you satisfaction ?

35. SUPPORT PROBLEMS
Problems with product quality ?
Problems with service delivery ?
Logistic problems ?
Invoicing issues ?
Problems with staff conflicts ?
Channel (Website) issues…

36. 4- CUSTOMER
PROBLEMS

37. CUSTOMER PROBLEMS
Find out through a survey
Why do they buy with you ? Is it for your products,
your services or your pricing ?
What do they blame you ?
On product side
On services side
On your “vision for the future” side
How many types of customers
do you have – and how
do you serve each of them ?

38. FIELD EXPERIENCE
One company with 2 product lines
One for large accounts
One for small companies
A lot of redundancy and inefficiency…
My solution : with 2 different service
needs, we delivered after 8 months
one software package with 2 very
different interfaces.

39. 5- PRODUCT AND
SERVICE PORTFOLIO
A difficult but exiting
challenge

40. PRODUCT – SERVICE PORTFOLIO
Analyze your catalogue of products/services
What kind of clients (profiling)
Average ticket / annual sales per client
Product/service mix per market profile
Margins per market package
Analyze your product lines
Are they innovative, aging…
Are they nice, robust…
…

41. PRODUCT – SERVICE PORTFOLIO
Get a table of results
Where do you make money ?
With what do you make brand recognition ?
With what do you get new clients ?
How do you make your up sale work ?
How is your R&D doing ?
Need investing or do we offshore ?

42. 1
FIELD EXPERIENCE
Online company with 20.000
references but only 15 critical for
business
By optimizing those 15, we increased
our sales and our revenues
I refused to follow our shareholders
will to cut prices on those 15 critical
items as these would impact heavily
our revenues (even when we would
win some interesting market share)

43. 2
FIELD EXPERIENCE
After acquisition, merging of 3 factories into
one single plant…and one single
“production-line”
On engineering side… 2 weeks work
On optimization / flexibility : difficult issues
as the 3 factories had different product
lines so the future single production-line
had to have a huge level of flexibility to
swap between the different product-
processing lines… 2 months to define this
“flexible” factory layout.

44. DO NOT FORGET TO
HANDLE THE WHOLE
SPECTRUM

45. Product
Research & Product
Portfolio Operating
Delivery Life
Sales
Stock Opportunity Development
range quality
quality Cycle
detecting Excellence
Cash Mgmt
PURCHASING & PRODUCTS
Revenue & Fault and
LOGISTICS & SERVICES
Margin Service
handling
Request
Discounts
handling
SUPPORT
Additional
FINANCIALS Open
sales
issues
IMPROVEMENT
IMPROVEMENT
Sales Mix
ROADMAP Employee
ROADMAP
Outstanding satisfaction
debts
MANAGEMENT
Competences
STAFF
Shareholders
Team spirit
CUSTOMERS SALES
Executive
Retention
Mix
Use of
Image & Customer Delivery Order Routes to Market
Forecast existing
Perception satisfaction accuracy intake market penetration
solutions

46. The management issue…
6- WRONG
MANAGEMENT

47. MANAGEMENT PROBLEMS
Does the company has the management it
needs?
“The bottleneck is ALWAYS at
the top of the bottle”

48. FIELD EXPERIENCE
Interim President role with a board :
A finance director always delivering
estimated numbers
A sales director unable to deliver a reporting
An IT director refusing to test his upgrades
before large-scale deployments
Only solution as they refused to
change their way of working… their
replacement (and I covered 3 different field-
interims in the same company).

49. But there can be extra “crisis” items …
7- SHAREHOLDER
CONFLICTS

50. Shareholder problems
The difficulties can be :
Difference of vision of where should the
company should go
Under-investment since years
Integration of a new shareholder…
Acquisition, so new culture…

51. My recommendation
It is impossible to satisfy all shareholders so
listen to them and create your own strategy
and growth plan for the benefits of the
company
If the company grows fast… the shareholders
will let you continue your job as their first
objective is … getting benefits
To create impressive growth… you need
to follow again all the
items included in my
improvement scheme.

52. FIELD EXPERIENCE
Major conflict between shareholders
blocking the development of the
company
My action :
Defined and executed my own growth plan
Annual growth = 70% with benefits + 20%
The shareholders saw how things
could move ahead … so stopped
discussing.

53. MARKET
COLLAPSE

54. Market collapse
Difficult issue to imagine… but you
must have an answer to that.
What am I good at and what can I do best ?
What do I do when one of my competitors will
give my products/services for free…
Examples :
Peugeot moved from the “milling” to the “car
manufacturing”
Apple got multi-product with iTunes

55. FIELD EXPERIENCE
We delivered online-services
We prepared ourselves for a “strong
competition” cutting prices heavily
It arrived in 2005… (one of the free
products of Google)
The company did maintained its
revenue meaning people were ready
to pay for a service while Google was
giving it for free.

56. SO THIS IS The
end
as I want to keep it down
to less than 60 slides

57. Previous publications
The 39 lashes of a French turnaround executive
(already 17.000 downloads)
http://39confessions.ifrance.com
Making turnarounds work
http://www.slideshare.net/vanrompay/making-turnarounds-work-
presentation
Publications in French
Comment un président peut retourner une mauvaise situation
http://www.slideshare.net/vanrompay/ceo-turnaround-presentation

58. PLEASE HIRE ME
AS I WILL BE
AVAILABLE ON
JUNE 1, 2009
vanrompay@online.fr
http://vanrompay.online.fr