If a business is in trouble and looking to hire the services of a turnaround manager, it can add to the stress of what is already a difficult time. It is important to maintain objectivity during this time and minimise adding any further problems to the business.
While it is best to move quickly and prevent any further downturn in the business, it is also important to identify the best consultant for the task. There are a few key factors to consider when choosing a turnaround consultant which are outlined below.
Turnaround management experience is the most important factor when selecting a consultant – it is not the time to gamble with an inexperienced operator who is ‘cutting their teeth’. It is important that the consultant has a portfolio of past clients and success stories demonstrating their turnaround management experience.
Keep in mind that business degrees and CPA qualifications don’t count as turnaround management expertise. It is a specific area of business that requires a unique combination of skills and experience is vital.
Most respected turnaround management consultants are members of the Turnaround Management Association or TMA. Their membership in this organisation means they are required to adhere to a strict code of ethics and professional standards.
Australian businesses can check TMA membership by visiting their website here and searching by company or person.
A turnaround manager is expected to work quickly and confidently with a range of parties including banks, creditors, accountants, lawyers and more. It is important that they can build rapport with these parties and any experienced turnaround consultant will already have an established reputation. It is important to check this reputation and ensure they have a good standing in these critical areas.
Leadership & Management Skills
As the key player in executing the business turnaround the consultant must show excellent negotiating and interviewing skills at all levels of business. They are also coming into a business that is new to them, so their entrepreneurial ability to quickly grasp key concepts within the business and take action are vital.
During the turnaround process, it is essential that the consultant has the ability to step up as the leader and take control of the process.
Structure of Fees
There is no point in hiring someone whose costs may put further stress on the business and simply introduce more problems. The fee structure of the turnaround consultant should be clearly established at the outset and any performance incentives outlined.
While hiring a business turnaround consultant is usually occurring during a difficult time, following the key points above will help ensure that the most suitable one is chosen for the business.