When you need a heart by-pass, you call in a cardiologist rather than a general practitioner. When you are in legal troubles, you consult a lawyer. When you have tax problems, you seek advice of a tax consultant. Yet many troubled companies make the fatal mistake of not approaching the right professional for help. Many try to get out of their conundrum using the internal management. Others rely on their lawyers, auditors, etc. These troubled businesses need to bring in turnaround experts and specialists. In fact, the management of some of these ailing companies behaves like a deer caught in the headlights, petrified and totally clueless on how to move forward. As chief executives and chief financial officers fall from their grace over accounting irregularities and scandals, turnaround managers, with familiar titles such as chief restructuring officers, turnaround specialists or artists, corporate doctors are taking charge of distressed companies to get them up to speed again. In the US, troubled companies such as WorldCom Inc, Enron Corp, Kmart Corp have appointed turnaround specialists to restructure their businesses. Since he Asian financial crisis, even Malaysia has enlisted the use of professionals, armed with impressive credentials rather than political ties to shake up the government-linked companies. For instance, in 1998, the former premier brought in the first batch of turnaround experts to head the Umno-linked companies and asset management firm Danaharta. Some of these turnaround experts who generally have a background in business, accounting, finance or operations are called in by the creditors or board of directors who lose faith in the management. In most instances, these specialists have had a significant experience as a CEO, CFO, CIO or COO provide a sense of credibility and glimmer of hope to the board, investors and creditors. . They are a special breed of talent, as they have to be entrepreneurs, visionaries, redesign architects and crisis managers all rolled into one. They have to create resources out of liabilities, find opportunities where none is apparent and travel down uncharted paths to fix unsolvable problems. In essence, they have to create value by reinventing the company. Unfortunately, no company seeking to turn around would run an advertisement that says: "Company not making money and need turnaround specialist. Send in your application." There are many ways of finding quality professionals to enable you to fix your business. The first place to start looking for a turnaround specialist is to contact your banker, lawyer, external auditor, large accounting firms and various business chambers and associations. Through their previous collaborations, these parties may have the contacts of specialist with the requisite skills Another way to find the turnaround specialist is to contact those who understand the company's situation such as current employees, company's board of directors and advisors and associates. But one has to exercise care in the selection process. There are many professionals who profess to be turnaround specialists but are actually only financial people who are preoccupied with cost-cutting measures. It takes much more than mere cost cutting to turn around an ailing business. Certainly, such skills and knowledge are important but it is only part of the answer. Besides having actual turnaround experience, turnaround specialist needs to have a broad understanding of the industry. He or she needs some understanding of the industry. Normally time is not on the side of the turnaround specialists to show results. Therefore if he understands the industry it can facilitate and shorten the learning curve and quickly bring in business through his contacts. The specialist also needs to have gone through adversity and shows track record of successfully turning around troubled businesses. Successful managers in healthy companies will not cut it as they have not had to work with low-morale employees, creditors screaming for payments and diminishing market share as clients switch to the competitors. Sadly, most of these restructuring experts are brought in too late. As the restructuring should have been carried out yesterday. Consequently, the success rate of turnaround is very low. Therefore, when you need surgery, call in the surgeon quickly. Do not delay as it can be fatal.
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