Some turnaround specialists define corporate turnaround as "a substantial and sustained positive change in the performance of a business". Corporate turnarounds are also often described as Back to Fundamentals and Back to Entrepreneurship — not one or the other, but both at the same time.

In theory, turnarounds should not be necessary, but in reality they are. In most companies turnaround actions commence only after the CEO or the board of directors accept two facts :

that the company is in a real danger, there is a real crisis, therefore
problems have escalated and small incremental improvements will not solve it in time.

Once the CEO and directors face the fact that the moment of truth has arrived, they empower someone (like Redburn Solutions) to take steps necessary to save the company. Most of the time, the first task is to manage the crisis, and because of this, in recent years the expression crisis management has become synonymous with turnaround management. However, in most cases there is a lot more to turning the company around than overcoming the initial crisis.

It is often said that it takes entrepreneurs to start companies and that it takes professional managers to run established companies. Well, a turnaround requires both mentalities at the same time. The repeated finding of many studies in Europe, is that in 80% of cases by the time the company is foundering and needs a turnaround, it has already moved far away from sound business practices.

Rules for turning companies around.
I wish I could tell you that our company, Redburn Solutions could do magic with your company, but in reality no magic is involved – there are proven rules for turning companies around which we will be happy to discuss with you.

Turnaround Priorities - Particularly in the crisis management stage.

Hemorrhaging must be stopped, i.e. positive cash flow must be restored.
The decline of morale and good will must be terminated.
Stabilisation must be achieved quickly to buy time for the company to - reposition, restructure and re-engineer itself (the 3Rs).
The momentum of changes must continue and the room for making expensive errors, and tolerating non-performance must be gone.
Not the largest profit but the shortest payback is king, until basic viability is restored.
At this critical time there is no time for formal studies actions must be based on a quick and penetrating analysis.

A drastic and rapid turnaround is a business revolution. Can it be anything less than that in a financial crisis when the company is hemorrhaging money, morale and good will? Can it be anything less than that, when owners' equity is disappearing and when there is no time to move at the usual evolutionary pace?

While rapid and drastic repositioning and restructuring of the company, and rapid and drastic changes in the way the company operates and does business (re-engineering), will scare most people, such actions are a rational response to many emergency situations. For such actions are required to get the company out of the rut of the Losing Track.

Experience shows that operating on a Losing Track often involves following implicitly some strategy, which was once a conscious and justified choice, but which with passage of time is no longer explicit, and due to changes in conditions is no longer viable. The most common reasons for not recognising that the company is on a Losing Track are the following :

The abandonment of habit to "manage by numbers" (cost-engineering, cost accounting and cost-benefit analysis).
Lack of periodic rigorous comparison with broadly understood competition.
Failure to actively seek improvements.
Unwillingness to face reality.

The above-mentioned requirements, of broad business knowledge (of many functions and many industries), very disciplined thinking, and absolute integrity, come into play from the outset – in formulating, and courageously asking tough questions that must be posed in order to determine if the company is merely experiencing some troubles or is on a Losing Track. Troubled companies are often stuck on the Losing Track until the right questions are asked. Redburn Solutions have the experience to ask the right questions.