For our Turnaround Series, Peter Charalambous, Senior Consultant, BDO Greenlight, gives a personal insight into major turnarounds he has worked on around the world during his extensive career. From Canada to Hong Kong, South Africa, and back to Jersey, Peter's experiences show how the key principles of a turnaround can be applied across different cultural and working environments.
As one of Britain’s biggest companies, Carillion, goes into administration, businesses on the brink have to ask themselves some important questions – do they want to turn themselves around, and if so, how far are they prepared to go?
Turnarounds are challenging for everyone involved, but they can work, and lead to a failing business becoming a model of success.
In September 2015 during the diesel emissions scandal, Volkswagen’s reputation was badly damaged. Share prices at the car maker had halved, and some analysts feared the scandal would cost as much as $80 billion (US).
Two years later VW has transformed its business, growing market share and becoming more profitable than before, with greater cash reserves and plans to invest over $20 billion in electric cars.
VW’s turnaround involved several stages – the departure of the Chief Executive, the reduction of capital spending, a new approach at Group leadership level, and diversification into new products led by new technology.
It’s a different story for every company, in every industry, but as our Turnaround Series shows, there are key similarities in every turnaround that can be used to help all businesses at every stage in the change process.
Many businesses fail to realise their potential, or teeter on the edge of the precipice when they hit troubled times because they refuse to change. Having spent my career working across Europe, Africa, Asia and North America for two of the world’s largest global organisations, I unintentionally developed a reputation as a fixer, a problem solver, taking control of struggling operations, turning them around, and handing them back to local management. Frankly, what people called hell, I called home.
If a business recognises it has a problem it will either ignore it or try and fix it. Some businesses leave it too late - they isolate the problem but lack the courage to shut it down and exit it to stop the rot.
There is often a lack of accountability and ownership at the top, with people hoping things will get better. In all my years, hope has never been a business strategy. Just ask the Directors of Carillion.