Turnaround Management

Transcription

1 Peter Faulhaber, Norbert Landwehr Turnaround Management Crisis Survival for German Mid-Caps : I i ***«,* } Campus Verlag Frankfurt/New York

2 Contents Foreword to the Third Edition 11 1 Turnaround Management: Principles and Phases 13 Looking the Crisis in the Face 14 The Four Phases of Turnaround 16 The Crash Phase 17 Initiating Turnaround 18 Implementing Turnaround 18 Consolidation 19 The Pillars of Turnaround Success 19 Propositions and Provocations 21 2 The Turnaround Team 22 Releasing Potential 22 Team Members 23 The Turnaround Hub 26 Minimum Effort for Maximum Effect 29 3 Cash Flow Management 32 The Case of Cashless Industries 32 The Bookkeeper's Fear of Final Demands 32 A Full Cash Flow Budget in Just Five Days 33 The Cash Flow Death Spiral 35 Cash Flow Management: Saved in the Nick of Time 36 Shedding Hidden Reserves 36 The Quest for Cash 38 The Importance of Positive Cash Flow 41 Type A: False Sense of Security 41 Contents I 5

3 Type B: Severe Cash Squeeze 42 Type C: Technical Insolvency 43 Type D: Periodic Cash Squeeze/Payment Difficulties 43 Methods of Cash Flow Management 45 The Cash Flow Budget 45 Organizing Day-to-Day Cash Flow Management 46 Ways of Boosting Cash Flow 48 Cash Flow Management Roadmap 51 Obstacles to Successful Cash Flow Management 51 Propositions 54 4 Negotiating with Creditors 55 Cash Drain International 55 Asking for a Breather 56 The Jaws of Insolvency 57 Supporting Measures 58 How Long Can Creditors Wait? 59 Who Can Grant Relief? Approaching Other Creditors 59 Deferring Payments to Suppliers 62 Preparing the Way 62 The Negotiating Process 63 Trade Creditors, Trade Credit Insurers and Banks 66 The Results 67 5 Finding Turnaround Levers: From Analysis to Strategy 68 A Fatal Assumption 68 A Turnaround Strategy in Eight Quick Steps 70 A Turnaround Strategy in a Matter of Weeks 72 Phase 1: Business Performance 72 Phase 2: Sectoral Standing 78 Phase 3: Value Creators and Value-Destroyers 79 Phase 4: Market and Competitive Standing 89 Phase 5: Core Processes and Core Functions 97 Phase 6: Cost-Saving Opportunities 102 Phase 7: Management Potential 104 Phase 8: The Turnaround Strategy 109 Propositions and Provocations B Turnaround Management

4 6 Increasing Earnings Power: The Customer-Centric, Process-Based Organization 117 Archetype Technologies 117 Revealing Hidden Efficiency Reserves 118 From Functional Orientation to Customer-Centric Processes Organizational Redesign: From Analysis to Strategy 121 Step 1: Identifying Core Processes 121 Step 2: Quantifying Process Activities 123 Step 3: Organizational Redesign 125 It's All in the Implementation 127 Propositions Profiting from Procurement 131 Kickback Inc 131 Knowledge is Power: Those Who Know Nothing Do Nothing 134 Money To Be Made 137 Isolated Procurement and Departmental Thinking Cost Money 138 Less is More: Complexity Costs Money 139 Organized Procurement 140 Knowledge Creation and Knowledge Acquisition 142 Delivery Reliability 143 Horses for Courses 144 The Ultimate Goal The Turnaround in Sales: Bait the Hook for the Fish, not the Fisherman 146 Complicated 8c Co 146 Six Sales-Related Turnaround Levers 148 Adopting a New Sales Strategy: The Right Bait for the Right Fish 150 Process Redesign: Casting Your Line 153 Training Sales Staff: The Art of Fishing 155 Intensifying Sales Management: Focusing on the Fish or the Fisherman 156 Effective Incentives: Bait for the Fisherman 157 Fisherman's Tales Versus Good Sales Data 159 E-Commerce: Casting a Virtual Line to Catch Real Fish 161 Contents 1 7

5 Summary 162 Propositions Extras and Service: Keeping Customers Fed and Happy Customer Needs: Writing the Menu 164 New Services: Adding to the Menu 166 Onsite Customer Service: From Barkeeper to Caterer 167 New Requirements In-house: Crossover Cuisine Boosting Efficiency with Production Planning and Control Production Planning and Control 170 Where MRP Falls Short 171 The Basic Idea: Process-Oriented Value Creation 173 The Example of Structureless Inc.: Deploying a Production Planning and Control System 176 Chaos Rules 176 Capacity Planning 179 Production Planning and Control in the Turnaround Process Production Order Planning 180 Make or Buy? 182 Increasing Production Capacity Utilization 183 Cost-Cutting Potential 184 Restructuring Production 185 Production Planning and Control and its Impact on the Business Integrating Upstream Processes 189 Costing 190 Procurement and Sales Turnaround and the Workforce: Individual and Mass Layoffs 192 Cue the Legal Experts 192 The Methuselah Manufacturing Co.' 193 Codetermination Rules 194 Reconciliation 195 Redundancy Plans 197 Putting a Limit on What is Reasonable 198 Number Crunching 199 Individual Terminations or Mass Layoffs Turnaround Management

6 Redundancies and Social Criteria 201 Mass Layoffs in Disguise 204 Employment and Training Agencies 204 Union or Employee Representation Hearings 205 The Outsourcing Trap 206 The Coward's Way Out Communication During Turnaround 208 The Drawbacks in Communication 208 Openness and Creativity 209 Choosing Your Time Wisely 210 Communication Prior to Turnaround 212 Crisis Point 213 Enter the Turnaround Team 214 Opportunity in Openness 215 Teamwork All the Way 217 The Risk in Stocktaking 217 Communication During and After Turnaround 219 Goals as Incentives. 219 Avoiding Blind Alleys 220 The Need to Know 220 Strategic Communication: Saying What to Whom and When. 222 Leading by Communicating 224 Communicating with Stakeholders 226 Key Elements of Turnaround Communication Mergers and Acquisitions in Turnaround 229 Selling the Crown Jewels 229 Outsourcing 230 Family Silver and Dead Wood 231 Balancing Interests 232 Risks and Common Fears 234 Taking Precautions 235 Existing Shareholders 236 Other Stakeholders 237 The Right Price: Pearls or Swine? 237 The Fatal Attraction of Bankruptcy Sales 239 The M&cA Process in Turnaround 240 Contents D 9

7 Stage 1: Identify Target Corridors 241 Stage 2: Identify and Assess Potential Buyers 243 Stage 3: Approach and Inform Potential Buyers 244 Stage 4: Negotiate and Identify the Benefits 245 Stage 5: Sign the Contracts 245 Stage 6: Provide for Integration 246 Traps and Stumbling Blocks 246 Propositions and Provocations Achieving Turnaround and Staying on Course 250 Designating a Chief Restructuring Officer 250 The Turnaround Team 251 Index D Turnaround Management