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Rapid Performance Turnarounds
Tom Pickering, icebreaker executive
“Lack of cash due to systemic business issues; margin erosion, stress due to lack of financial control, overtrading, lack of or inappropriate types of funding, and a lack of focus on business development when things get tough.” Tom Pickering of icebreaker executive explains the potential issues that cause businesses to seek turnaround and restructuring advice. Here, Tom explores how to rescue a failing business.
T Q
om Pickering started his career as an engineer at Lucas Automotive and led some of the largest change programs. He has started and sold businesses and led corporate
companies that have won awards. In 2006 Tom formed icebreaker executive to deliver change far more effectively through a unique team based model for the very best professionals. Since then he has acted in whatever mandate is required to resolve issues. Tom is a Fellow and Assessor of Fellows for the Institute of Engineering and Technology, with a passion for enabling people and businesses to excel, as long as there is a successful outcome, despite the current challenges that they may face.
What more can you tell us about Icebreaker Executive?
It is a business that was founded upon a team based approach to performance turnaround, and making change directors far more productive by applying a bespoke change and executive coaching methodology that Icebreaker developed in 2007. Subsequently, icebreaker has deployed this successfully on over 25 different change programs to achieve outstanding results. The outcome in major change scenarios is to not just transform a business, but to reach results much faster,
transform capability and leave an enduring standalone legacy, that will be effective for years after.
Q
What are some of the main causes that drive companies to seek turnaround and restructuring services?
Lack of cash due to systemic business issues; margin erosion, stress due to lack of financial control, overtrading, lack of or inappropriate type of funding, lack of focus on business development when things get tough.
Often executives have a blindness to face nor recognise the scenario nor be able to effectively execute strategy and stem the haemorrhaging cash.
The trigger is often a difficult meeting with an investor, bank or other stakeholder precipitated by a lack of confidence in the existing plan or consistent inability to deliver on time, or breach of covenants.
Q
What trends have you witnessed in your turnaround work recently? Why do you think these trends have formed?
Since 2012, the causes of failure have included: VCs overloading businesses with debt as an alternative to selling a business; banks
not pushing for change faster, turnaround solutions that are ineffective; director disputes; business and financial processes that don’t work; focussing on financials not the business; and taking on asset based lending without understanding the associated costs. Banks are rarely responsible for a businesses difficulties, business owners are usually naive in terms of the banks role and a banks inability to rightly avoid risk.
The trends that are leading to business failings are a lack of organisation, knowledge of how to sell value and justify margin, trapped in price competition, inability to motivate. An over familiarity with the business often blinds owners to skill gaps and hinders their ability to respond to challenges and adjust the business model to suit.
Q How does one rescue a failing business?
Half day: Establish the time available – defined by the cash, burning platforms, legal scenario, directors conduct, people capability. Contain the situation – triage like A&E service. Is there a viable underlying business, and or what needs to be proven to establish whether there is a viable business?
If there is
a viable plan break the news manage and align stakeholder expectations. Create an effective
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