Organisations that experience declining performance may risk entering a situation of financial distress when an external event or shock occurs.
In the short term strong expense and cash flow management is needed to stabilise and improve performance to an acceptable level. In the medium to long term the organisation must be repositioned in terms of business strategy and cost structures in order to avoid entering another period of declining performance. Often the challenge for boards and executive managers is the pace of change that is required with the need to develop new strategy and transform operations over a compressed timeframe.
Indigo Bridge approaches operational turnaround in two distinct phases.
This aims to stabilise cash flow over a full fiscal quarter by focusing on scaling back discretionary expenses, reducing the size of support areas, reducing purchases of non-critical items and managing working capital. This effort is supported by establishing a robust budgetary process with clear accountabilities.
This aims to address strategy and cost structures. Review of strategy will generally run parallel with the first 100 days, however, is often facilitated by a series of intense workshops that will develop options and drive to specific actions. A program of strategic cost transformation is initiated post the first 100 days. Scope and timeframe of this larger program will depend on headroom gains made during the first 100 days and the new vision and target competitive position for the organisation.
