Business Turnaround Transformation and Change Management

Business Turnaround, Transformation
and Change Management

While reviewing and analyzing a company’s falling revenues and profitability we frequently talk about business turnaround and transformation in the same league. Though they both help in achieving the same objectives and complement each other but are divergent in approach.

Turnaround is outward looking such that it examines changing what the business is doing in its markets in order to return it to profitability while Transformation is more inward looking and attempts to changing and improving the way the business operates and needs to be driven by strategic direction.

Change management is a systematic approach to dealing with the transition or transformation of an organization’s goals, processes and technologies. The purpose of change management is to implement strategies for effecting and controlling change and helping people to adapt to change.

There are specific features that will usually identify an entity in need of a turnaround. For a business, these may include declines in the price of its stock, the need to lay off employees, and revenues that do not cover requirements to pay creditors.

Changes in a firm’s competitive advantage and outdated products or service may also be indicative of a business that needs to investigate turnaround strategies. Also, bad management of resources such as labor and capital may put pressure on the company.