Written Interview Summary | Turnaround Mission
In which types of missions do you intervene most often?
I have a strong preference and affinity for turnaround assignments. This is really my priority.
What is a turnaround mission?
It is an intervention in a company in difficulty, often at risk of insolvency. The stakes of a turnaround mission are multiple since the economic difficulties put the whole company under pressure: loss of markets and customers, departure of key employees, hostile social climate, degraded confidence towards employees, customers, suppliers, bankers and even shareholders, strained cash flow, etc. A turnaround mission aims at preserving the future by restoring an operation in bonis, while clearing the debt resulting from the past.
A turnaround mission usually begins with a refinancing phase to avoid default. This is a very technical negotiation phase, based on a quick and uncompromising diagnosis of the origin of the difficulties. It requires a very good knowledge of insolvency procedures, a solid expertise in financing techniques and networks, as well as the ability to restore confidence by defending a credible economic project for the future. This phase must be carried out within a very short period of time, otherwise, a bankruptcy filing is often inevitable.
A company’s difficulties generally reflect an erosion (sometimes long-standing) of its performance. The manager will therefore have to identify and implement actions to restore it in a measurable and rapid manner.
At the same time, the manager must know how to communicate reliably and mobilize the teams.
Is the company not able to rely on its internal resources to manage a turnaround? Why use an interim manager?
Some companies do. They organize and manage their own turnaround. This is particularly true for very large groups that have dedicated in-house teams. Consequently, the intervention of the interim manager is most often aimed at large SMEs or ETIs.
It is important to keep in mind that a company’s difficult situation is often the result of a decline in performance that did not start yesterday. If the company was not able to deal with and anticipate a situation that was still “manageable”, it is unlikely to do better when it becomes critical.
Moreover, the consequences of the company’s difficulties are very time-consuming for the management, hence the interest of the dedicated resource that is the interim manager. His experience and expertise allow him to intervene at short notice in a very short time. He has the advantage of having a fresh eye, and significant experience of the issues. His presence will relieve key employees.
Yes, but is an interim manager expensive?
We must not forget that unresolved problems are also costly. And sometimes even very expensive. In the context of a turnaround, the sanction for unresolved problems is often the RJ, which is a costly procedure in itself, or the LJ, which most often leads to the disappearance of the company. In view of these issues, the financial trade-off is most often in favor of the intervention of an interim manager, whose cost is one-time and can even be spent as an exceptional item or capitalized.