Company crisis: Managers & Turnaround

  • October 4, 2021
  • Duke&Kay
  • 0

We interviewed Giuseppe Falcone, Executive with a solid experience in the management of special situations. He worked with Duke&Kay in corporate restructuring projects and he explains us how to act in the midst of complexity.

What are the characteristics of a turnaround manager?

Flexibility, strength and perseverance, attention to details and creativity (as far as can be creative a professional who moves between codes, bankruptcy laws and laws on “business crisis”, banking and stock market regulations) are some of the key characteristics (pre-requisites) of the Manager who has to cope with crisis and business relaunch.

Special attention to sharing information, goals and planning with the Turnaround Team.

The Team includes not only “change managers”, but also external professionals such as law and tax firms, “Asseveratori”, experts, financial advisors and, above all, auditing firms, corporate bodies and the personal network of the Team driving change.

The continuous discussion with several “actors” helps to identify the best practices to solve business problems which, although they are recurrent in distressed companies (ex. liquidity), have specific features that may be different in each proceeding.

To have a highly skilled Project Leader to share strategic and tactical choices with, and, at times a support even for basic activity, allows the Turnaround Manager to be effective and to deliver timely in managing change.

Which are the keys for success?

A Finance professional entering a company undergoing change may not know the target market and certainly does not know the Company history other than having read the available financial reports.

It is therefore essential to connect with the incumbent management and to have the ability to adapt to the working atmosphere, especially if the company is a “historic” company.

As a first step, therefore, listening and great respect for the “healthy” company rules.

On the other hand, the setting of strict goals, which must be declared and shared, and the ability to guide the company to achieve them, are one of the keys to the mission’s success.

Moreover, the turnaround manager needs to possess an uncanny ability to empathize with people. Listening, delegation, engagement and sharing are some attitudes that must be part of his action. Haughtiness and arrogance, in my experience, have never let company targets be achieved.

Empathy, determination in setting the target and delivering are therefore necessary. But in addition, the utmost commitment to achieve the best quality of the work with, and this is my personal obsession, a great effort (to be the first one to arrive in the office and the last to leave, for example) to be an example for everyone and motivate people especially in “distressed” environments.

The importance of the managerial approach. What are the critical issues for companies in this period of crisis and how to deal with them?

In this historical moment affected by the Covid-19 emergency, the companies’ critical issues are well known. For many companies the decline of turnover due to drop in consumption, the closing of many industrial and service sectors (tourism), massive use of layoffs and cost reduction (non- renewal staff leasing) and last but not least, perhaps the most serious economic consequence of this emergency, the lack of liquidity.

The lack of liquidity is even more devastating in companies already facing a debt restructuring process because, to date, they have been completely excluded from any form of additional access to bank credit (at least for those companies that are not SMEs).

In addition to this, the uncertainty of the enacted rules in support of businesses and the transition from an outdated bankruptcy law to the new one – further postponed – make an unpredictable scenario and companies navigate a fast changing world (some indeed asked for the intervention of corporate “haruspices”).

The turnaround manager is used to scenarios of uncertainty. Joining the company he can bring back to the “ordinary” what is uncertain today.

The solid experience of the Turnaround Manager, his knowledge, skills and abilities are the keys for the relaunch and, in more than one case, for the survival of companies. He can help them navigate the stormy sea of recent time.