As corporate Australia returns from a beach or snowy mountain somewhere, its also a good time to consider any turnaround plans for 2017.

The break over summer provides an opportunity for management and boards to clear the head, reboot strategy and renew focus on fixing a company.

A good starting point is a report card for 2016.

A pass mark suggests you may just need to follow through on existing strategies with some tweaks to the existing turnaround plan.

Something less than a pass mark? This means more fundamental changes are necessary while the perspective provided by a new year makes it an ideal time to initiate changes and not “kick the can down the road” as you become consumed by other issues in the business. The alternative of delaying change likely means that 2017 will be a bit like 2016!

Here are 8 common major problems in a business which are difficult to address and could form part of some new years resolutions in a turnaround:

1. Get cash forecasting sorted. Cash management is hard to fix while it is tough to build a “cash culture” to support good forecasting. However, the rewards of strong cash management are control and visibility over the commodity that is the lifeblood of any turnaround.
2. Fix ERP and supply chain management. In a globalised and highly competitive environment, the quality of these systems is a key divide between performing and non performing businesses.
3. Find the right management team. All turnarounds are led by good management.
4. Source new financiers. Many lenders don’t have an ongoing appetite for turnarounds. Although the due diligence process associated with a new lender is loathsome, its difficult not having a supportive financier willing to provide the facilities and sometimes latitude required in a turnaround.
5. Find an investor. This will typically require the “pain” of dilution of existing equity but could restructure the balance sheet so as to allow operations to then be funded/fixed.
6. Exit unprofitable operations, divisions, products etc. These are often agonising decisions given previous “emotional investment” but easier to make following the new year period and with the benefit of a break.
7. Cut costs including staff, administration, travel etc. See 5 above!
8. Lastly (and it’s a general issue), resolve to be honest and realistic about the position of a company. Denial is one of the great threats to any turnaround. Key issues to address include:
o Revenue and profit forecasts achievability.
o Key reasons for underperformance.
o Whether overall strategy is correct and matched to the current market and competitive environment.

Following through on these “resolutions” will involve hard work, some risks and take time to complete. However, the outcome is that by fixings these problems the platform to achieve a turnaround comes into place.

We all typically plan a “new you” as part of our new years resolutions. Applying this mindset and approach to a turnaround is a good way to address a fundamental issue for all turnarounds ie change is necessary otherwise you end up with the same result.

If you would like a no obligation, confidential discussion about turnaround management and executive solutions, please contact me at