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 move around in complexity.

What are the characteristics of a turnaround manager?

Flexibility, strength and perseverance, attention to detail 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, objectives 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 competent point of contact, the “senior” Project Leader, with whom to share both strategic and tactical choices and, at times 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 except to read the available financial reports.

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

As a first step, therefore, much listening and 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 change manager must be sympathetic to the collaborators. Listening, delegation, involvement and sharing are some attitudes that must be part of their actions. Haughtiness and arrogance, in my experience, have never let company targets be achieved.

Then, empathy and determination in the target setting and delivering. But also, the utmost commitment to achieve the best quality of the work done alongside, but this is my personal obsession, with a considerable amount of effort (to be the first one to arrive in the office and the last to leave, for example) to serve as an example for everyone and motivate especially in slightly “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 company’s critical issues are well known. Decrease in consumption and consequently in companies’ turnover, closure of whole 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 rules issued in support of businesses and the transition from an outdated bankruptcy law to the new rules for business crisis – further postponed – make an unpredictable scenario to move around (someone in fact has requested the intervention of corporate “haruspices”).

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

His experience, professionalism and network of skills can be a success factor for the relaunch and, in more than one case, also for the survival of companies by helping them navigate the stormy sea of recent time.

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