Turnaround and Restructuring Consulting
Turnaround situations arise for a multitude of reasons and can result in restructurings. Frequent drivers of turnarounds and restructurings include one or more of the following: macroeconomic downturns, supply chain interruptions, cost increases, disruptive solutions, mergers and acquisitions, projected or actual breach of debt covenants, and liquidity shortfalls. Similar to mergers, acquisitions, divestitures, joint ventures, and strategic alliances, turnarounds and restructurings are fraught with risks. To increase your odds of success in these situations, leverage our divestiture expertise and flexible operating models for aerospace and defense (A&D), automotive, healthcare, natural resource, retail, and TMT companies.
Our Principles
Overcommunicate internally and externally
Act decisively and move rapidly — success/failure is determined in 12 to 24 months
Prioritize, prioritize, prioritize
Anticipate and mitigate risks
Incentivize risk-taking and reward performance
Our Process
Triage strategic, operational, and financial situation
Develop fact base, assess full potential and returns on investments, and prioritize initiatives
Implement our change management process
Getting Started
How long does it take to get started with a turnaround program? While every situation is unique, Strategic Value Partners (SVP) typically triages the strategic, operational, and financial situations in 4 to 12 weeks.
What are the top 3 priorities in a turnaround or restructuring program once it is underway? While every situation is unique, the top 3 priorities generally include the following: 1) Liquidity - i.e., cash balance, detailed cash flows, and compliance with debt covenants (if applicable); 2) Change management; and 3) Customer and supplier relations.
What are the top 3 mistakes companies make in turnaround and restructuring programs? While every situation is unique, the top 3 mistakes generally include the following: 1) Misunderstanding liquidity and underestimating the cash and time required to turnaround or restructure the business; 2) Incorrectly prioritizing initiatives and focusing on too many initiatives and/or the wrong initiatives; and 3) Failing to establish a program office structure and governance that promote standardized processes and tools as well as rapid decision-making.
How long do turnaround and restructuring programs last? While every situation is unique, turnaround and restructuring programs generally last 18 to 60 months. Just as importantly, we’ve found that achieving success in the initial 12 to 24 months dramatically increases the odds that a business will be successfully turned around or restructured. The reverse is also true — i.e., programs that struggle in the initial 12 to 24 months rarely succeed.
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Where we operate
Our extraordinary clients are headquartered or operate in cities such as Atlanta, Austin, Baltimore, Beijing, Boston, Charlotte, Chicago, Columbus, Dallas, Denver, Detroit, Dubai, Fort Worth, Hong Kong, Houston, London, Los Angeles, Mexico City, Miami, Minneapolis-St. Paul, New York, Omaha, Paris, Philadelphia, Phoenix, Pittsburgh, Portland, Riyadh, San Antonio, San Francisco, San Jose, São Paulo, Seattle, Seoul, Shanghai, Stamford, Toronto, and Tokyo. Our work frequently takes us to remote locations as well.