Operational Turnarounds

If your company is in a tight spot, Stanton Associates can help

Stanton Associates provides practical, roll-up-our-sleeves assistance to companies facing challenges, including at times of crisis. We have the experience and the smarts to deliver expedient tactical measures to improve the situation quickly as well as long-term solutions for growth and profitability.

Situations where we can help

  • The company may have a diminished but nevertheless strong balance sheet. However, it or one of its business units is underperforming.
  • The company is not yet in a crisis, but all trend lines point in that direction.
  • A true crisis may be at hand, with the company headed for the cliff if its course is not altered.

Stanton Associates has helped in all of these situations with skillful, calm yet rapid advice. We can step in as interim “turnaround” management in various roles to the extent that is required. Ideally, we hope we can get involved early enough to work with management to effect business improvements that avoid a crisis and bring the company back to the path of growth and profitability.

Six Steps to Success

A Word about Cost Cutting.

One has to stop the bleeding and quickly. However, that is a start, not the end, and one should not lose sight of the potential for a successful turnaround – which should mean there is a viable, growing, profitable company when the dust settles.

Of course, some situations are just too far gone. We can heal the sick, but we cannot revive the dead. However, some turnaround firms approach all troubled companies like a carcass using a “surgery with an axe” approach, which may bring net positive cash flow in the short-term. But, as expense reductions chase revenue losses in a death spiral, the potential for a recovery is lost.

You can’t cut your way to success! We use a balanced approach that includes driving top line growth with improved gross margins, with a smart, surgical focus on eliminating non-critical expenses.

In all circumstances, one starts with a situation analysis: How bad are things really? How tough do the action steps need to be? The business sequence follows a straightforward logic:

  1. Situation analysis.
  2. Maximize cash flows to avoid running out of money.
  3. Determine reliability of information and usefulness of internal controls and reporting systems, then take corrective action quickly if necessary (and revisit item 2).
  4. Create performance monitoring systems which track key performance indicators (at least weekly), and that hold everyone accountable. Establish clear and simple incentives for the whole company (not just senior management) based on company and individual performance (initially the incentives will probably have to be non-cash).
  5. Dig into the business plan. What is the strategy? Prepare a detailed executable plan that charts a path to success and includes a focus on driving top line growth, not just cutting expenses.
  6. Present plan to creditors and obtain their buy-in and support.

Why use Stanton Associates?

  • We go beyond cost cutting and financial engineering to tackle the core operational and strategic issues that caused the company to sink into the soup to start with. If that is not done, the turnaround is really just harvesting organs – not setting the stage for future success to create value for all stakeholders.
  • We have the experience to dig in and take the quick actions necessary to get the company the “right way up.”
  • We bring expertise to address the underlying sales, marketing, overhead, and other operating issues to get revenue and profits flowing again.