Stuart Slatter - Corporate Turnaround

This book started as a project to revise an earlier book on turnaround management written by one of us in the early 1980s. The book, Corporate Recovery A Guide to Turnaround Management by Stuart Slatter has been widely used by managers and students of management, both in the UK and overseas. Once we started on the project to update the book we realized that while the basic concepts and approach of the earlier book are as applicable today as they were fifteen years ago, we wanted to include a lot of new ideas and material that we have developed in recent years. Only have much in common with Corporate Recovery, and so very quickly the project became a new book with a new title.

We would like to acknowledge a number of people who have contributed substantially to the production of this book. In particular we would like to thank Julian Cooper, an Arthur Andersen partner who is now based in Bangkok. His very analytical and structured approach enabled us to clearly communicate our thoughts and concepts. We would also like to thank Laura Barlow, who did much of the work towards capturing our views on the critical areas of developing turnaround plans and signposting the way out of the maze. Adrian Wolsterhome captured much of the importance of tight working capital and cash management, and Derek Elliott project-managed the input from these and other members of the Arthur Andersen turnaround team. This is not an easy task, and we are grateful to Derek for applying his usual unflappable style to a project that could on occasions be like herding cats. We would particularly like to thank Julian Gething, who is a Director in the Arthur Andersen Global Corporate Finance practice. He took an unpaid year out to obtain an MBA at London Business School, during which he researched the key success factors in achieving turnaround. Many other Arthur Andersen staff contributed to this book, including Wolf Waschkuhn, John Leahy, Greg Tate, Russell Pope, Chris Lawton, and David Turver. We are grateful to them all; but the views expressed in this book are the views of the authors alone.

Many business practitioners have reviewed this book and shared with us their insights on implementing turnaround plans. We are very grateful for the time freely given and hope that we have adequately reflected their observations in our book.

The development of any book takes a great deal of commitment and support, and since both authors have a pretty hectic professional life, three secretaries have had to take the brunt of our often extreme demands. We are both fortunate in having these excellent allies and we would like to thank Nancy Earl, Jenny Drew, and Carol Goodall who patiently kept us to the task in hand.

Turnaround is big business. Consider just some of the financial headlines from around the world on one day in September 1997:

Ssangyong: renewed rumours of serious cashflow and other financial problems at South Korea's sixth largest conglomerate. This follows persistent rumours about the possible collapse of the Kia Motor Group and the insolvency earlier this year of three other large conglomerates, including the collapse of Hanbo Steel.

Sears: UK retailing group tumbled 98 million into the red as newly appointed company doctor David James commences turnaround with 80 million provision against future restructuring costs.

Philippines: rumours of serious cash-flow problems at Philippines' largest food producer sent stock plummeting.

Laura Ashley: troubled UK retailer warns of further losses more than two and a half years after the appointment of company doctor, Anne Iverson.

Other main stories in 1997 included the financial crisis in Thailand which resulted in the suspension of fifty-four troubled financial institutions; the IMF rescue package for South Korea and Indonesia; and the Communist Party of China's three-year initiative to sort out inefficient or loss-making state enterprises. Whereas turnaround management was a relatively obscure subject when this book's predecessor, Corporate Recovery, was published, today it represents a global phenomenon.

This book is written for those directly involved in turnaround situations. It is particularly relevant for chief executives who find themselves having to lead a turnaround, but will also be useful for any other member of the management team (chairman, non-executive director, etc.) of a troubled enterprise. Investors are the second major group for whom the book is written. Venture capitalists, bankers and other finance providers who are involved with troubled companies may find it helpful as a checklist against which they can evaluate the rescue plans of the management teams they are being asked to back. And finally we hope it will help advisors of troubled companies merchant bankers, management consultants, and others.