FAQs

What is a Performance Management dashboard? 

A display of specific variables that management uses to measure performance.

Performance Management via the dashboard is a concrete way for decision-makers who want to practice turnaround management every day.  It lets them know where all the key performance indicators (KPI) are that drive their desired outcomes.

What is the difference between an Operational and a Strategic Turnaround?

First, this decision is made once the Viability Tests show that the turnaround has a very high probability of succeeding.  Those two different scenarios are:

• you are undertaking a turnaround for an organizations that is just underperforming, and has not reached the point of corporate distress (the point of pain); or
• you are transforming an already healthy organization that seeks to maximize its performance. 

Decide whether it is an Operational Turnaround or a Strategic Turnaround.  What’s the difference?

In an operational turnaround, you do things differently.

In a strategic turnaround, you do different things.

Operational turnarounds take less time and are focused on operational efficiency (cost cutting) and increasing revenues.  Professor Michael Porter at Harvard Business School reminds us that, at a certain point, it is not possible to compete on price alone.  Turarounds based on expense reduction alone usually hit a wall.

Strategic turnarounds, on the other hand, take longer to reveal results.  Yet major strategy changes, such as exiting unprofitable businesses to focus on just one, are often not just the only viable solution, but also prove to be very effective solutions.

Sometimes, in an effort to do something -- anything -- management teams try the operational turnaround where they cut costs and try to increase revenues.  They do this because they lack the time, expertise or financial resources to do the necessary strategic turnaround.  In these cases, management ends up consuming the remaining resources on a failed effort.  A Net Present Value analysis may have revealed that selling the assets or merging with another firm were better choices. 

What is a financial restructuring?

This usually occurs once a company is failing the Viability Test.  Once a business is in distress – facing creditor workouts or considering bankruptcy, it has to deal with the reality of financial restructuring. 

If and when the crisis is resolved, management may have the option of evaluating whether to do things differently, or to do different things.