It was Albert Einstein who once said, “In the midst of every crisis, there is a great opportunity”.
While the coronavirus pandemic may not have created the forces that are currently driving change in the global economy, it has certainly turbocharged them.
It came at a time when the world was already experiencing permanent and profound change driven by new technologies, changing customer demands and the transition to a low-carbon economy.
As the worst impacts of the pandemic fade, it’s an exciting time for businesses to invest in the future, especially with interest rates at historic lows and massive government stimulus measures. to achieve net zero emissions.
But the pandemic means that many companies are starting out from a stressed situation, having accumulated debt, depleted their working capital and deferred their obligations to stakeholders.
The Bank of England estimates that around a third of small businesses in the UK are now deeply indebted, with debts more than 10 times their cash balances – a figure that has more than doubled since the start of the pandemic.
This does not mean that these opportunities are out of reach, but it will take radical change and renewal to make the most of them.
It puts a renewed emphasis on turnarounds as more businesses seek to first stabilize, then adapt and find their place in the new economy.
It is likely that a company will only experience one turnaround, so companies are unlikely to have all the in-house expertise and experience they need.
So we’ve brought together a range of turnaround contributors, specializing in everything from finance and restructuring, to human resources, environment, social and governance, marketing, communications, sustainability, law and productivity.
They have a proven track record advising businesses of all shapes and sizes in times of crisis, so their advice is hard earned and worth heeding.
The full guide is available for free download now, and the advice laid out isn’t just theoretical, it focuses on practical steps to help businesses navigate the turnaround process and beyond.
The book is divided into two main sections that reflect the natural priorities of the recovery process: stabilization and growth.
Stabilization begins with a thorough and pragmatic examination of the issues a business is facing, underlying issues, and potential new opportunities.
Only when armed with this information can they make the right decisions quickly and in the right order.
That’s why my fellow Senior Credit Officer David Bates has written a chapter on the tough questions that need to be asked and the short-term steps that can give companies the time they need to develop a longer-term strategy.
Here, David explains exactly what directors do throughout the turnaround process and explores how to build and manage a team that can successfully handle a turnaround.
Often a turnaround will involve working with outside advisors, so we also reached out to Nick Winks, founder of turnaround specialist WayPoint Change, to explain exactly what a turnaround practitioner can bring to the table.
And Nigel Lake, founder of the strategic and financial advisory firm Pottinger, wrote a chapter on the financial restructuring options available, as well as the way forward to give companies the best chance of survival.
Ultimately, not all businesses will be able to emerge from their current problems, so we’ve also included a section on navigating the insolvency process, including restructuring, administration and liquidation.
Whatever path a company takes to recover, it’s essential to take partners on that journey, which is why we’ve also devoted a chapter to setting up stakeholder support and crisis communications. .
It is important to look beyond the immediate crisis and look for opportunities for growth.
New technologies enable new transformational business models. So there’s an easy-to-read overview of the main trends in the new economy, from Industry 4.0 to the Internet of Things.
My colleagues at Bank of Scotland have also created an in-depth chapter on building financial resilience, with a focus on managing and improving the working capital cycle, financial products that can help businesses do this. and a section on mitigating supply chain risks which is particularly relevant at this time.
And there’s an introduction to capital and the strategic support that partnering with a private equity investor can provide from John Garner, managing partner at mid-market private equity firm LDC.
My colleagues Glenn Bemment, Head of ESG, SME & Mid Corporate, and Gary Lapthorn, Head of Sustainability and Responsible Business explain how sustainability can unlock new avenues for growth and savings, along with a sustainability checklist to help businesses get started on their sustainability journey.
And the book also explores how businesses can be transformed through digitalization, including advice on how to develop a digital strategy, new technologies enabling increased efficiency, and the potential for introducing automation.
We are going through a once-in-a-century change that will have a profound impact on the world of work for the next hundred years.
Businesses now face a limited window of opportunity to find their place and thrive in the new economy and I’m sure our ebook will be a valuable tool in navigating the future.
But they don’t have to go it alone; there is plenty of help available, including from the Bank of Scotland team.
We know it has been a difficult time and we are playing our part in helping Britain recover by supporting as many businesses as possible.
Download full Turnarounds: Seizing New Opportunities free ebook now here.