My TURNAROUND

KEYNOTES

April 2009

WARNINGTurnarounds

are to be

executed by

specialists

only…

Turnarounds

are to be

executed by

specialists

only…

Don’t run to escape your troubles…

TURN AROUND AND SOLVE THEM !

This is not a handbook but

just a listing of things that

needs to be looked at !

60

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

one of slides.

First step

� Detect the thing that is killing the company

� Products and services

� Sales

� Customer base

� Purchasing/Logistics

� Finance

� Staff (employee conflicts)

� Support

REMEMBER

There is the perceived cause… and the real

cause.

REMEMBER

Experts and people

can point to a

perceived problem…

but you need to find

the real pointer out

of the screen !

DO NOT FORGET

� In almost all cases… you need numbers.

� As you are called in for a crisis situation, ALLnumbers 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 ?

THE fULL

ACTIVITY SCHEME

Is just on the next slide …

(… simplified version !!!)

Revenue &

Margin

Discounts

Additionalsales

Sales Mix

Outstandingdebts

FINANCIALS

IMPROVEMENT

ROADMAP

IMPROVEMENT

ROADMAP

CUSTOMERS

Image &Perception

Customersatisfaction

Deliveryaccuracy

SALES

ForecastOrderintake

Routes to market

Marketpenetration

Use of existingsolutions

Cash Mgmt

PURCHASING &

LOGISTICSPRODUCTS

& SERVICES

StockDeliveryquality

SalesResearch &Opportunitydetecting

Portfoliorange

Operatingquality

ProductDevelopment

Excellence

SUPPORT

Fault and

Servicehandling

Requesthandling

Openissues

ProductLife

Cycle

STAFF

Employeesatisfaction

Competences

Team spirit

Retention

MANAGEMENT

Shareholders

ExecutiveMix

The problem… you

need to TACKLE

every item…

Starting with the most urgent and/or critical one

Revenue &

Margin

Discounts

Additionalsales

Sales Mix

Outstandingdebts

FINANCIALS

IMPROVEMENT

ROADMAP

IMPROVEMENT

ROADMAP

CUSTOMERS

Image &Perception

Customersatisfaction

Deliveryaccuracy

SALES

ForecastOrderintake

Routes to market

Marketpenetration

Use of existingsolutions

Cash Mgmt

PURCHASING &

LOGISTICSPRODUCTS

& SERVICES

StockDeliveryquality

SalesResearch &Opportunitydetecting

Portfoliorange

Operatingquality

ProductDevelopment

Excellence

SUPPORT

Fault and

Servicehandling

Requesthandling

Openissues

ProductLife

Cycle

STAFF

Employeesatisfaction

Competences

Team spirit

Retention

MANAGEMENT

Shareholders

ExecutiveMix

Do you know

Which one causes

you the problems ?

There is one visible cause… and one hidden. And they are never the same !

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…

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

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”

AND always

INDICATE where

you ARE HEADING

1- STAFF ISSUES

STAFF

� Measure and estimate

� Employee satisfaction

� Competence

� Team spirit

� Retention

� Find the hidden people that

influence the teams in

your company

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).

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

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

2- FINANCE ISSUE

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 ?

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

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…

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

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

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.

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

3- SUPPORT

SERVICE PROBLEM

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 ?

SUPPORT PROBLEMS

� Problems with product quality ?

� Problems with service delivery ?

� Logistic problems ?

� Invoicing issues ?

� Problems with staff conflicts ?

� Channel (Website) issues…

4- CUSTOMER

PROBLEMS

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 ?

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.

5- PRODUCT AND

SERVICE PORTFOLIO

A difficult but exiting

challenge

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…

� …

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 ?

FIELD EXPERIENCE 1� 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)

FIELD EXPERIENCE 2� 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.

DO NOT FORGET TO

HANDLE THE WHOLE

SPECTRUM

Revenue &

Margin

Discounts

Additionalsales

Sales Mix

Outstandingdebts

FINANCIALS

IMPROVEMENT

ROADMAP

IMPROVEMENT

ROADMAP

CUSTOMERS

Image &Perception

Customersatisfaction

Deliveryaccuracy

SALES

ForecastOrderintake

Routes to market

Marketpenetration

Use of existingsolutions

Cash Mgmt

PURCHASING &

LOGISTICSPRODUCTS

& SERVICES

StockDeliveryquality

SalesResearch &Opportunitydetecting

Portfoliorange

Operatingquality

ProductDevelopment

Excellence

SUPPORT

Fault and

Servicehandling

Requesthandling

Openissues

ProductLife

Cycle

STAFF

Employeesatisfaction

Competences

Team spirit

Retention

MANAGEMENT

Shareholders

ExecutiveMix

6- WRONG

MANAGEMENT

The management issue…

MANAGEMENT PROBLEMS

� Does the company has the management it

needs?

“The bottleneck is ALWAYS at

the top of the bottle”

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).

7- SHAREHOLDER

CONFLICTS

But there can be extra “crisis” items …

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…

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.

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.

MARKET

COLLAPSE

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

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.

SO THIS IS The

end

as I want to keep it down

to less than 60 slides

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

AS I WILL BE

AVAILABLE ON

JUNE 1, 2009

vanrompay@online.fr

http://vanrompay.online.fr

PLEASE HIRE ME