What is Corporate Turnaround?
There are times when a company or organization finds itself in a period where they have performed poorly. After this period, the company often has to move into a corporate turnaround. The business may not have been in decline, but it may have stagnated. Either of these periods may require the company to go into a turnaround. This period can bring stability to the organization after a period of instability. For a turnaround to work, the business has to accept its position, acknowledge the problem, have a willingness to change, and work to create a strategy to solve the problem.
Michael Canzian and his company understand the importance of turnarounds because they create an opportunity for the business to move into a period of improvement after a significant decline. In some cases, this involves restructuring to become profitable and stable for its future.
For a business to truly begin a turnaround, they must study all aspects of the organization, including management, current tools to identify the problem, and existing strategies to solving problems. There are typically two types of causes for a decline in an organization. These are external causes and internal causes.
External causes are usually prompted by an external event or activity. No matter how well a business functions, external causes may have devastating impacts that require the business to reassess its current operation, even if it appears to work. These external events include new competitors. Competitors that are aggressive in the same market can cause a downfall for an organization. Increased pricing also impacts the organization. When the costs of supplies go up, it may force the business to increase their prices to make up the difference. When demand changes, it impacts an organization. There may be a reduction in demand that has nothing to do with the organization. For example, the economy may affect business operations. If customers do not have the money to purchase products, then sales go down.
Internal causes are directly related to the business and failure inside the organization. This could be due to management, resources, or employees. Mismanagement is a significant reason for the failure of an organization. Poor financial decisions such as poor control over the budget or improper forecasting are ways that the finances of a business can quickly get out of control. Trends come and go quickly, and when a company does not pay attention to the trends, it can push your business into a significant decline.