Key factors in how to choose a turnaround professional
Selecting the right turnaround firm is difficult. A company in need of a turnaround professional seldom has the time to do a lot of due diligence so how do you decide? The approach we recommend is to focus on the factors that truly differentiate one firm from another. Those factors include:
Experience is the most important credential. MBA degrees and CPA designations count for little if a turnaround firm does not have a proven track record. A candidate should be able to produce a portfolio of success stories and satisfied clients.
Reputation. No turnaround manager can expect to succeed without quickly gaining the confidence of creditors, as well as accessing new sources of credit. A company considering hiring a turnaround firm should check the candidate's reputation with leading bankers, asset-based lenders, attorneys, accountants, financial advisors and trade creditors.
Managerial Skills. As the chief architect and implementer of new strategies, the turnaround specialist must be an organizational leader. One should look for a person of action who has entrepreneurial instincts, "hands on" experience and negotiating skills.
Fee Structure. The fee structure of the turnaround specialist should be clear and fair. The scope of work and expectations should be clearly defined. The company should look to see if the proposed contract includes an incentive or performance arrangement.
Ethics and Professionalism. Membership in the Turnaround Management Association (TMA) is tangible evidence of the degree of professionalism, experience, and integrity of a turnaround professional. TMA also encourages professionals to pursue the Certified Turnaround Professional (CTP) designation as a further demonstration of their expertise and commitment to the corporate renewal industry. The CTP designation indicates that a turnaround specialist has met specific standards of education, experience, and professional conduct, and has successfully completed a rigorous three-part written examination.
TMA's strict Code of Ethics is signed by all members. CTPs can be brought before a Standards Committee if a violations charge is made. If the person is found to have violated the code, the Standards Committee can impose sanctions, including expulsion from the association and rescinding the professional's CTP designation.
