A turnaround strategy is a plan to rescue an organization, department, or team that is experiencing failure or underperforming. This often requires quick and decisive action in the face of significant challenges and limited resources. A turnaround strategy may involve a range of measures, such as restructuring, cost-cutting, or changes to leadership or business operations. By implementing a successful turnaround strategy, organizations can turn around their performance and avoid failure.
Triage is a process of quick decision making in an urgent situation. A turnaround may require large decisions to be made within hours. For example, if a trade dispute causes borders to close disrupting a supply chain, a manufacturer may have to immediately decide which operations need to shutdown.
The practice of replacing the management of an organization or team that has generated poor results. In some cases, a management team has produced good results but an organization is at risk of failure due to external factors such as a disaster or economic collapse. A replacement strategy may still be used where management has performed well. This is typically done where it is felt that insiders are likely to hold tightly to the status quo of the organization.
Business as Usual
Business as usual is a basic principle for managing drastic circumstances whereby people are asked to continue with their work without becoming distracted by events of the day. For example, an airline with a drastic cut in revenue due to an adverse global event may ask employees to continue on without loss of enthusiasm despite pending job cuts.
Retrenchment is the process of reducing an organization including elements such as departments, teams, products, regions and business functions. This is a painful process that is often nonetheless necessary for the survival of an organization. For example, a firm that is facing a liquidity crisis may be able to secure additional funding based on the condition that they reduce costs by 40%. From an optimistic viewpoint this can be considered a process of creative destruction.
Repositioning is the pursuit of creativity and innovation to find a leap forward that saves an organization. For example, an oil company that repositions itself as a solar energy firm that produces energy at great scale and low cost.
Renewal is the pursuit of a long term strategy that will eventual pay off in significant ways. Once a firm stabilizes its finances a turnaround begins to invest in the long term goals of the organization. For example, an oil company that begins to recruit talent who can realize a shift to green energy.
The process of changing the culture of an organization. For example, shifting from a culture of resistance to change where people find excuses not to do things to a culture of aggressive change where people find ways to speed things up.