Dr. Earl R. Smith II

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

In the first part of this series, I described the initial triage steps that I took after analyzing the data provided by the assessments had. At the same time that we were working with the CEO and senior team, we began to develop a plan for the first stage of the turnaround effort. Here is the lost of challenges that we had identified: Read the rest of this entry »

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

I recently completed a turnaround engagement with a mid-market company. The effort was successful and the story of the turnaround was typical of many.

My initial foray into any company identifies those threats that are likely to bring it down. I refer to this as triage. In this case there were a range of threats. The first that needed attention was the management style of the CEO. She was imperious and aloof. That approach had permeated the entire senior team. It was clear from the beginning that there was a divide between senior management and the rest of the company - that was causing both conflict and inefficiency. I chose to begin the engagement by working closely with the CEO. Read the rest of this entry »

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

In business, as the old saying goes, in business cash is king. This is particularly true for companies in distressed situations. A cash flow statement is a snapshot of a company’s situation and a ‘reality check’ measure of its ability to meet its obligations to creditors and investors. Cash flow projections are a description of the company’s ability to continue doing that. Every experienced turnaround professional begins with a detailed survey of the cash and cash flow situation. Read the rest of this entry »

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

In a prior article, I described how management of the balance sheet is important in efforts to turn a company around. In this one, I would like to mention a few issues that affect the income statement and describe managing them will advance any turnaround efforts. Read the rest of this entry »

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

A good turnaround plan attacks problems on several fronts at once. It also recognizes that some issues need to be resolved prior to moving on to others. One of the first places that any turnaround effort should focus is on the company’s balance sheet. Many companies, which find themselves in difficulty, have evolved balance sheets that are ‘upside down’. By that, I mean a growth in liabilities and a reduction in assets. Read the rest of this entry »

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

No company plans to fail or to find its way into difficult situations - but it happens all the time. Over the years, I have worked with a range of companies that were facing the need to turn things around. The paths that they traveled to reach such a desperate condition were varied but the best ways out had a lot in common.

Times of corporate distress present special and strategic challenges to management, the board of directors, shareholders, employees and the sources of financial resources so critical to a company’s success. At the extreme, a company may be in either bankruptcy or nearing bankruptcy. Most often, there is a great deal of uncertainty arising from one or a number of problems - with bankruptcy only the last option.

Read the rest of this entry »