Turnaround management: corporate renewal and restructuring during times of financial distress

When distress is threatening the company, quality leadership becomes a plus to win the demanding challenge of restructure and redirect the business towards the stability.
During the early phases, leader is engaged in helping shifting from business strategy to cost reduction, during the later stages, instead, his focus is in strategic implementation and results/monitoring. During the whole turnaround the capable manager will never lose the sight from innovation.
The innovation process hides difficulties and dangers itself.
The companies are required to develop the ability to make fundamental adjustments to their philosophies, strategies, organisations and practices. Only rarely, in fact, businesses are in a position to start from scratch. Usually they have existing organisational arrangements, power distributions, well established strategies and rooted interests, all of them are forces holding change back. Leaders have also to overcome outdated beliefs, status-quo and consolidated internal norms.
The concept matches with the ‘force field analysis’ proposed by Lewin in 1946, and with his 3-stages approach ‘unfreeze-change-refreeze’.
Business renovation does not lie in a single methodology, corporate identity and managers’ background lead to different recovery styles. Several business cases have proved the validity of different models. The Economist (2008) proposes the comparison of three leading groups:
- 3M, the diversified multinational, prefers to foster individual innovative ideas from employees.
- Hewlet Packard, the leading IT multinational, pursues innovation building huge R&D departments.
- Apple Computer, the company's development of the Macintosh product is a perfect example of the revolutionary strategy.