Company turnarounds are not only financially driven

There is a growing turnaround industry. The Turnaround Management Association has grown in 15 years to over 6,000 members. Yet, so much of the industry looks like its predecessors, the liquidation and bankruptcy industries. While in many cases, use of Chapter 11 gives companies much needed breathing space, it may not be enough. This is particularly true outside the US, where bankruptcy laws look more like Chapter 7, and there is less room to manoevre in bankruptcy.

Companies in trouble, such as Quantum, whose shareholders just administered a stinging rebuke to management and the Board, need to have a two-pronged approach. This addresses financial issues such as debt, expenses, etc., but also customer loyalty, pricing, and market share. All too often, companies in trouble simply hunker down.