The turnaround that I am referring to is the encouraging signs out of Washington that, finally, sick companies are going to be treated with the same tough love that every Restructuring professional knows is key to saving the patient, assuming it is savable. The replacement of the GM CEO with one that espouses a restructuring plan that goes “deeper, harder, and faster” is encouraging.
Although I am hardly a fan of heavy governmental involvement in running businesses (Washington has hardly demonstrated it can run its own business well), I am at least encouraged to see what I hope is the end of bailouts to companies that then operate, more or less, with a mindset of business as usual.
Equally importantly, we are finally seeing evidence of dealing with both short term liquidity needs and longer term viability. Meeting the short term liquidity needs of a business is obviously important, but only if there is a sound plan demonstrating longer term viability.
I am increasingly convinced that as problematic as liquidity issues are, equally problematic is the inability of companies and their constituencies to get any comfort with long or even medium term viability. Most of us in the Restructuring profession grew up in the business fixing sick companies during relatively predictable market and economic scenarios.
Today, the Restructuring professional must deal not only with a sick patient, but also with a sick and seemingly unpredictable environment.
That squares, if not cubes, the difficulty of the turnaround.
Planning for uncertainty requires new skills, processes and paradigms. I have previously written about the thought provoking work of Dr. Paul Schoemaker in this area. Schoemaker not only believes company’s must plan for uncertainty, he goes a step further and argues that company’s can profit from uncertainty.
I have become a big believer that winners among the Restructuring advisors will be those firms developing an additional core competency around planning and managing in uncertain times. Hence, my desire to try to better understand Schoemaker’s work and that of his boutique consulting firm, Decision Strategies International ("DSI"). So, I carved out some quality time to meet in Philadelphia with Schoemaker and DSI CEO, Scott Snyder.
Coming next: One thought leader’s perspective on dealing with uncertainty. In my next post, I will share Dr. Schoemaker’s concept of a “Strategic Compass” for uncertain times.
No comments:
Post a Comment