WP-1 Rescue & Surviving the Crisis
When a business is crisis and external parties are pressing to take control, the measure of 'success' is survival.
The immediate crisis has been averted and owners are still in control. The business is afloat, its bought some time and still trading albeit not in great shape.
"Time" is usually the biggest enemy, money buys it, so does some tactical negotiations with external parties. To achieve this it'll be all hands on deck, intense work to develop a short term survival strategy.
However, turnaround only begins when company leaders have decided changes are necessary.
As most CEOs or company presidents do not relinquish power easily, the motivation for management change must often come from the board of directors via lenders. Even if incumbent mangers are willing to implement changes in an effort to turn a company around, they often lack the credibility or objectivity to do so because they may be viewed as having caused or contributed to the problems in the first place.
Creditors and key lenders attitude to delaying imminent action will rely on interim management being appointed and supported by the owners. They will expect some report back on the condition and plan for turnaround.
Critical Risk Assessment
The first days are spent assessing of all business risks that threaten its immediate survival. The scope and severity of the situation. Is it in imminent danger of failure? Does it have substantial losses but its survival is not yet threatened? Or is it merely in a declining business position?
We will observe its ability to get supplies, operate the production, make deliveries, retain key staff (and exit trouble makers) and deal with other external issues.
Survival Strategy & Tactics
Work through a strategy & tactics that enables you to maintain control of the business through the crisis. This may include appointing an interim CEO (or CRO) to act on behalf of the owners or board.
Protect Key Assets
Take action to protect vital key assets of the business required for a successful turnaround and future growth. These assets may be physical, financial, intellectual property and key people.
Negotiate Support Agreements
Negotiate agreements with suppliers, lenders, staff and government agencies that enables the business to continue trading for a period while a turnaround plan is enacted. To retain their support we may also be obliged to provide them regular progress reports.
Not all creditors are going to be supportive. They have to be dealt with too.
WP-1 Outcome = Immediate crisis avoided. Owners in control of the business. Given short reprieve to plan turnaround.
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