When faced with extreme challenges that threaten their survival, companies may turn to a turnaround consultant. A turnaround specialist is someone who assists a company by either 1) consulting on a short-term project basis or 2) acting as an interim chief executive, replacing the current leader or management team while the company reorganizes. How do you know if turnaround consulting can help your company in either of these roles?
What You Need to Know About Short Term Turnaround Consulting
If your business is struggling because of broader factors such as recession, economic downturn, industry slowdown, regulatory changes, or other macroeconomic factors, bringing in a turnaround consultant on a short-term basis may help. The outside consultant will spend time getting to know the business inside and out, and their third-party perspective can help them analyze decisions objectively and with fresh eyes. The consultant will likely undertake a complete, detailed review and analysis of the company’s operations, including financials, accounting, and personnel. After reviewing the books, interviewing executives, managers, and board members, and discussing big-picture direction, strategy, and goals, the consultant will recommend a course of action to maximize assets and reduce liabilities. This often involves firing or laying off employees, consolidating production, closing locations, or otherwise improving the efficiency of the business.
What You Need to Know About Hiring a Turnaround CEO
Bringing in an outside consultant to serve as a replacement CEO is more disruptive to the business, but this can have marked advantages. A turnaround consultant can make potentially unpopular decisions that are difficult but necessary for the improvement (and continued survival) of the company. An arrangement of this kind can span years as the board of directors or other managing shareholders work with the consultant on a complete restructuring of the business. Hiring a neutral third-party consultant to take charge of the ship allows the managing body not only to garner the benefits of the expert’s experience and knowledge but also to mitigate some of the sting of unpopular decisions. At the end of the engagement, the consultant can also make recommendations and assist in the search for a permanent leader for the business going forward.
Keys to Hiring a Turnaround Consultant
When hiring any consultant for your business, it’s vital to identify and communicate your goals and objectives for the relationship. Establish time- or achievement-based starting and stopping points so the engagement (and expense) doesn’t become open-ended and success can be more easily measured. Outline and memorialize clear, measurable goals before the consultant begins work. Discuss compensation up front, whether that is a flat fee, a performance-based ROI consulting fee, an hourly rate, or some other compensation structure. Good communication is the key to finding the right consultant and getting the most from your ongoing consulting relationship.
If your business is struggling, turnaround consulting may be the way to get back on the road to success. Cornerstone Consulting Organization’s executive and senior business management consultants have a wide variety of areas of expertise and technical specialties for success in both short- and long-term turnaround consulting engagements. Our skilled consultants have experience with ROI consulting, operations consulting, and specialized services to help your business survive and thrive. Contact us today to learn about our team’s qualifications and help you find the consultant that’s right for your business.