We're often asked "what's the turnaround process?" Turnarounds are like fingerprints. Each one is different. But several issues are common to most of them.

Since the buck stops with top management, we've found that management must be the start of the process as well as the end.

Most top managers and owners have the intelligence to run their businesses. Many have good track records. Most of them have admirable intentions. Then how is it that so many turn a deaf ear to the rumbling flat tire of eroding performance?

The net effect is management denial - the rejection of bad news which blinds us to the realities of a pending Slippery Slope situation. The denial causes management paralysis, postponement of planning and action, and ultimately, may lead to the liquidation of the enterprise.

Only when the Board, management and investors actively look for Red Flags, such as rapid revenue growth, system conversion problems, over-expansion, high debt, low margin distribution channels, core competency diversions, family conflicts and other serious problems, can they recognize the need for the turnaround.

Aiding in the recognition and early warning step may be a brief preliminary analysis by a competent team. We call our analysis the . It's analogous to a medical checkup. Our team does a head-to-toe examination by interviewing key managers - CEO, CFO or Controller, top Sales/Marketing executives, Manufacturing, Operations, etc. We review the Driving Force of the business, its Vision, Strategy, three years of Financial information - operating statement, cash flows, balance sheet, Technology and Operations. We do an external review of the competition, marketing trends, other factors (Government regulation, etc.). Our confidential finds are presented to top management in an on-site briefing and written report.

The first step after recognition is the quick selection of a Professional Turnaround Manager and the creation and empowerment of the Turnaround Team. Good team members have a sense of urgency and haven't isolated themselves in the safe haven of the ivory tower. They know what needs to be done and who can help.

The Turnaround Manager and Turnaround Team then create the Turnaround Plan starting with handling the Crisis situation. This may or may not involve reduction in force, debt restructuring or sale of under utilized assets. It usually involves applying a tourniquet to stop the bleeding of cash.

Turnarounds are difficult under the best of conditions. It is even more daunting if a company chooses the wrong Turnaround Specialist to carry it out. Unrealistic expectations can also impair success. By carefully selecting the Turnaround practitioner with the appropriate expertise, objectivity and creativity a company will improve its chances for survival.