To know what to expect from a turnaround specialist, it is useful to understand what a turnaround is, and what a turnaround specialist does.

A turnaround is everyday management, but it involves managing the process of rescuing a company in serious decline which will fail in the foreseeable future with no corrective action.

Turnaround specialists are neither CFOs nor accountants. They are not lawyers, salespersons, or marketing experts. They are not hatchet men only interested in cutting costs and staff.  They may, however, have qualifications and expertise in some of these areas.

My definition of a turnaround specialist is a polymathic crisis manager. Polymaths are individuals with knowledge spanning a significant number of subjects, known to draw on complex bodies of knowledge to solve specific problems. Crisis managers plan and implement the response to a major threat to a business.

Turnaround specialists come to the organisation with complete objectivity, and with the ability to quickly analyse the situation, determine solutions and actions that those in or close to the business may not see and also make the critical and timely decisions that need to be made without emotional bias from shareholders, directors and management.

Turnaround specialists also have a range of unique behavioural skills and management style. They like intense situations and being shoulder deep in the operations. They have to work with often inaccurate and incomplete data and use their intuition to make decisions. They build credibility by delivering on what they say will do and building trust.

Years ago, as a senior currency trader, I said I can teach someone to trade currency in a day, but I could not teach them to be a currency trader. Similarly, just because you were a CFO or a corporate banker, it does not translate into being a turnaround specialist. It is the other skills and knowledge and the ability to apply them that really makes a turnaround specialist.

Turnaround specialists usually follow a similar process in four phases.

1. Analysis phase

This is where a diagnostic review is performed and the turnaround options are evaluated. One option gets chosen, and the immediate crisis actions are then undertaken. The turnaround team is established and they develop a plan.

2. Emergency phase

This is executing and managing the actions required within the plan. There is usually a heavy focus on liquidity management, operational factors, cost control and stabilising sales.

3. Strategic change phase

This phase looks at areas that will strengthen the business going forward.  This might involve revisiting standard operating procedures or looking at IT systems and processes. This phase may also consider products and markets and decide what changes are required for ongoing and long-term viability.

4. Growth and renewal phase

Once the business balance sheet has improved, the business can begin to grow again, either organically, or via merger or acquisition, or both.

Underlying and throughout these four phases, the turnaround specialist also undertakes stakeholder management and project management.

There are also some things you should not expect from a turnaround specialist.  They are not miracle workers, but they will do their best with what they have. Their success at implementing a turnaround is reliant on the support of the Board and management team, who must own the turnaround and commit to the actions required. Turnaround specialists do not work alone but require a team both internally and externally working on the turnaround for it to be successful.