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- PIMCO’s Bill Gross: On the "Course" to a New Normal, September 2009 Investment Outlook
- Session: Automating Payables to Optimize Working Capital
- Session: Re-inventing your AP process.
- Session: Kyriba demonstrates their ASP-based cash management operation.
- Session: Cash Flow Forecasting: Overcoming Challenges
What is renewal? It’s based on the verb, to renew -- to make new again; to restore to existence: reestablish, recreate, rebuild, revive, resuscitate; to restore to fullness or sufficiency.
What is a continuum? Continuum comes from the same root as the adjective continuous. A continuum is something absolutely continuous; something of which the only assertable variation is variation in time or space.
Corporate renewal is the process of rebuilding an organization to restore it to full sufficiency. We say that renewal is based on a continuum because, of the three categories found on the continuum -- corporate transformation, turnaround management and crisis management (Platt, 2004) -- the major difference between them is the amount of time that management has left to diagnose and fix the problems.
We classify the companies attempting renewal as either underperforming or distressed.
Corporate transformations are done by underperforming companies – ones that are generally healthy but that want to improve their performance, possibly in one particular product line, or functional area.
Turnarounds are also done by underperforming companies, but turnaround implies more serious financial problems and less time to deal with them. The combination of financial decline and limited time can push a company out of the category of underperforming and into the category of distressed very quickly -- between the time that management realizes there are problems and then starts to take the appropriate actions.
Distressed companies can be turned around, but only when they are still viable. Distressed companies often have a window of opportunity to workout their debts with creditors, and restructure themselves. When this point has passed, the turnaround effort becomes one of crisis management and the company’s existence is in question.
This is why we say that corporate renewal is based on a continuum because the major difference between the three renewal efforts is time. That time is directly inverse to the size of the problem: management can take a year or more on a full-scale transformation, but may have just months or even weeks to resolve a liquidity crisis.
