Strategy

Mapping Corporate Strategy | Strategic Health Check | Business Rescue

In the book Corporate Turnaround the authors, Slatter and Lovett consider a framework for achieving a successful turnaround. This framework is summarized as the following:

GENERIC TURNAROUND STRATEGIES:

There are seven essential ingredients to a successful turnaround plan and successful situations are characterized by significant actions in each of these seven areas. Failure to address any one of them may endanger the successful outcome of the turnaround.

The list of generic strategies is set out below. It is not an exhaustive list but does indicate which strategies would address the problems most usually encountered in that specific area.

SEVEN KEY INGREDIENTS GENERIC TURNAROUND STRATEGIES
1. Crisis Stabilization
  • Taking control
  • Cash management
  • Asset reduction
  • Short-term financing
  • First-step cost reduction
2. Leadership
  • Change of CEO
  • Change of other senior management
3. Stakeholder Support
  • Communications
4. Strategic Focus
  • Redefine core businesses
  • Divestment and asset reduction
  • Product-market refocusing
  • Downsizing
  • Outsourcing
  • Investment
5. Organizational Change
  • Structural changes
  • Key people changes
  • Improved communications
  • Building commitment and capabilities
  • New terms and conditions of employment
6. Critical Process Improvements
  • Improved sales and marketing
  • Cost reduction
  • Quality improvements
  • Improved responsiveness
  • Improved information and control systems
7. Financial Restructuring
  • Financing
  • Asset reduction