By Prof. Enrique Soriano
Exactly 11 years ago, after “retiring” from the corporate world at the height of the global financial crisis in 2009, I thought my crossover to consulting work would be a walk in the park. Barely warming my seats after leaving Belo Medical as its group CEO, I received a dozen offers for a full time CEO engagement all of which I politely declined. I also received separate offers to head listed conglomerates in Jakarta, Ho Chi Minh and Singapore. I must admit their offers were extremely tempting, some were too good to pass up but in the end, the lure of a “semi active” over “active duty” status prevailed. I experienced the best of many worlds—as an entrepreneur, more time to write, quality family time, chair of a cluster at the AGSB (ATENEO Graduate School of Business) and consulting work for several companies.
My baptism of fire as a corporate turnaround advisor came to light immediately after the global financial crisis (GFC) hit the country. I still recall getting a call from an old friend/corporate lawyer to whom I have not heard of for more than 15 years. Strangely, he mentioned that he was trying to get hold of me for weeks after learning that I already “retired”. Several engagements after and the rest as they say is history. That one call eventually paved the way for my entry into the world of turnaround management. In western economies, this arcane skill of fixing troubled companies has been viewed as a sort of “black magic,” practiced by a few highly skilled talented practitioners. Conversely, executives who are used to managing the business during peacetime have no feel for the nitty gritty, crisis-oriented type of leadership skills necessary to turn a troubled company around. In any turnaround engagement, time is your biggest enemy. Indecisiveness can spell doom.
Most turnaround advisors I know are also one dimensional. They are exceptionally good at a particular field e.g. finance but lack the skill set on sales or operations and vice versa. An authentic turnaround specialist must wear many hats to understand the complexities of a troubled firm. A turnaround engagement is not all glamor. As a matter of fact, it is a very difficult engagement, the kind where decisions are done in real time. It is like performing surgery under the most unhygienic environment with nothing except your bare hands and a half -filled alcohol exacerbated with all kinds of negative forces working against you, limited funds, limited products, no cooperation from suppliers, shortage of manpower, in short, a crippled operating system running on empty but constantly being pressed by creditors. That is an environment that most people don’t understand. Without actual first-hand experience and extraordinary and aggregated insights, those attempting to join this industry will end up failing. A turnaround specialist must have an incredible resolve to make bold decisions and get the job done in a timely fashion yet having the ability to adapt to different situations bereft of emotions.
This article is for owners who are facing the biggest battle of their entrepreneurial lives. Similarly, this article is also for those who are in charge of preventing further decline in an otherwise healthy organization just a few months ago. A turnaround situation is an abnormal period in any company’s history. It requires different forms of interventions that are unique from those of healthy enterprises. In my experience, many of the old and proven management models, applicable to normal situations (peacetime), may have no bearing in a distressed company gasping for breath. Basic principles still hold, but their actual implementation can take an entirely new and sometimes unconventional approach. Growth projections no longer appeal, even bottom lines take a back seat over cash flow objectives taking into consideration solvency and liquidity values. One thing is clear, hope is not a strategy. Either you change now or you will be swept away by the rampaging economic impact brought about by this pandemic.
If this article has given you hope for a recovery, I encourage you and your managers to join me on July 23, 2020, Thursday at 2 PM to 4 PM in a private international webinar entitled, CLOSING IS NOT AN OPTION: VISAYAS LEG. I have been invited as the resource speaker to share my experience as a turnaround advisor, introduce tools, align business plans and roll out initiatives. This is very timely as it will highlight economic challenges as well as important business strategies that key business leaders can use while leading the enterprise through this difficult period. For inquiries, you may reach Francis through 09664639667 or send your queries to [email protected].
