Turn Around Management

This strategic training programme provides managers of small enterprises with a strategic and structured framework for financial crisis management. It uses the concept of the turn-around curve, together with strategic analysis such as Porter’s Value Chain and Competitive Advantage models, as well as financial analysis and risk analysis. By the end of the programme and the company visit, managers should be able to understand and develop a financial model for their firm and take appropriate measures for crisis management and turn-around management.

As a result of participation, managers should be able to:

1. Assess the enterprise risk in their standard operations. Understand different sources of risk—technological, competitor, customer—and understand their vulnerability levels.

2. Understand how to spot an emerging crisis and measure its severity. A crisis is part of the risk assessment framework, but is usually one order of magnitude worse than standard risk in standard operating conditions.

3. Understand their corporate value chain, including financial and non-financial metrics of competitive advantage. This requires the deployment of strategic analysis tools such as Michael Porter’s Value Chain and Competitive Advantage models, but also bridging the gap between these and financial profit centre analysis (see below).

4. Understand the basics of a profit-loss statement, including cash flow and balance sheet impacts.

5. Develop a profit centre approach to operations. This involves defining their value chain into operations, and then assigning income and costs into operations. This is also known as a profit centre approach. It includes the allocation not only of direct costs but also overhead costs.

6. Developing strategies and tactics for turn-around management in a structured and coherent manner.

7. Improve their ability to manage profitability, risk and crises.

Day 1 Value Chain Analysis and Profitability

08.30-08.45 Registration

08.45-09.45 Introduction: Financial Crises: Types and Impacts

· The 2000 dot.com crisis in Cyprus

· The 2008 global financial crisis

· The 2013 bail-in crisis

· The 2020 COVID-19 crisis

· Typical impacts on small enterprises

· Duration, timing and warning signs

09.45-11.00 Risk Management

· Understanding risk management, including systemic risk, competitor risk, technological risk, customer risk, “acts of god” (fire, flooding, disease, war), and black swan events

· Modelling risks, chances of occurring and impacts

· Risk mitigation methods (introduction)

· Crisis management introduction

11.15-13.00 Modelling and Analysing Strategic Corporate Operations

· Value stream mapping: from raw materials to final   consumption

· Porter Value Chain Model

· Porter Competitive Advantage Model

· Porter Five Forces Model

· Integrating strategic analysis with risk   assessment

· Integrating strategic analysis with corporate   profit/loss

· Understanding key indicators in modelling: speed, processing steps, defects, quality, time to payment, discounts/rebates, etc.

13.00-14.00 LUNCH BREAK

14.00-15.00 Basic Corporate Finance

· Understanding the P/L statement

· Understanding the cash flow statement

· Understanding the balance sheet statement

· Methods for measuring sales & gross profitability per customer

· Developing the profit centre approach

· Examples / case studies of profit centres

15.00-15.45 (0.75) Measuring the Cost of Sales

· Modelling workflow in a company: what steps create costs?

· Calculating average break-even per order; per delivery

16.00-17.15 Measuring the Cost of Sales

· Differentiating statutory P/L statement

· Allocating overheads by work share, SKU orders, other metrics

· Methods for measuring net profitability per customer

Day 2 Turn-Around Management and Financial Crisis Management

08.45-11.00 Turn-Around Management Diagnosis

· Defining the current status of profitability and business

· Outlining options for change – defining a turn around mgmt plan

· Sales and pricing scenarios and sensitivities

· Changing operations and business processes

· Developing management consensus

· Gaining external sources of finance: loans, grants, equity, etc.

11.15-13.00 Customer Segmentation and Pathways to Change

· Cutting Costs and/or Raising Sales

· Non-financial segmentation (potential vs. attractiveness)

· Financial segmentation (Pareto, A-B-C, x-y-z)

· Purchase characteristics and profiling

· Contract – order variability and sensitivities

· Relating sales and order profitability to turn around management – key indicators and means of optimising profits

13.00-14.00  LUNCH BREAK

14.00-16.00 Optimising Production and Industrial Operations

· Producing to Order

· Lean and “Semi-Lean” manufacturing principles

· New methods of shared cost manufacturing

· Optimising profitability in manufacturing – relation with the turn-around management plan and key indicators.

Optimising Distribution and Logistics Operations*

• Physical Structure of Inventory Management

• Shelf Space, Positioning, Flow

• Stock Picking / Merchandising Planning

• Delivery Effectiveness; Schedules and Route Planning

• Relating distribution and logistics to the turn-around management plan and means of optimising profitability.

16.15-17.15 Turn Around Management Planning: Summary of Measures

• Making Decisions: Cutting Costs and/or Raising Sales

• The 100-day Turn-Around Plan

• Crisis Management Teams and the Role of the Chief Executive

• Authorising Expenditure / Cutting Fixed and Variable Costs

• Improving Sales / Improving Cash Flow

• Managing and Mitigating Risk: Summary

17.15-17.30 Discussion & Conclusion