Written by Schon Condon in February, 2008

The big news for this issue is that after a little more than 15 years in the same location we have finally moved to new premises. Our new office is in Marsden Street Parramatta, however there is more on this in a separate article – suffice to say that our new premises will enable us to enhance the level of service we seek to provide to clients. We are still in the process of finalising our arrival and I will have a little more in our next issue on the move, including some important thankyous.

Recently I completed my year-long term as President of the Turnaround Management Association of Australia. This was an enjoyable and important role for me personally and for the growth of Condon Associates as we continued to be major supporters in reviving people and organisations wherever the opportunity exists.

One question I am frequently asked is ‘What is turnaround?’ or ‘What is a Turnaround?’ Recently Condon Associates had the opportunity to assist the Australian subsidiary of an overseas organisation that had reached a point in their development and could no longer see a road ahead.

The initial meeting with this client began with their desire to know about Members Voluntary Windings Up. Whilst potentially insolvent, the foreign parent was simply going to throw the money in to close, what they considered to be a whole sad affair. When I raised the issue of possible alternatives I was greeted with the response that they “had already explored every tunnel that they had found that had a light at the end of it, only to discover that every single one had actually been an oncoming train!” By the time they met with us the whole management team had reached a point of both physical and mental exhaustion, they were ready to give up.

Turnaround is a process of returning value to an entity, regardless of whether that value is for creditors, financiers or shareholders. Turnaround can range from a refinancing or restructuring through to some form of statutory reorganisation such as a Voluntary Administration, or even as simple as a profit improvement programme. The most important key however is to identify the most appropriate course of action early so that the often limited resources, not just available funds but also human energy and endurance are not squandered.

Too often the process fails because the practitioner lacks the appropriate skill or experience or alternatively focuses of the level of fee that can be drawn from the client without regard for cost minimisation on all fronts.

As the market continues to move in a less than predictable direction the need to maintain and improve stakeholder value will become paramount. Turnaround will increasingly become the focus, particularly where security values are weak or in decline.

In the case at hand that I mentioned above we were able to approach the issue from a what can be done now approach and initially looked for and found a solid if only small foundation. From that point we then took each issue individually and worked a solution to each problem that was capable of being tied back to the whole. We then tweaked that whole and progressed the plan. It is still unfolding. Ultimately, the business will proceed in a reduced capacity, people will still have jobs, some for other parties, the cash drain will have been severed and all stakeholders will have benefited from the propounding of a genuine, practical and positive turnaround.

In closing, thankyou for all the positive feedback we have received regarding our newsletter, “On the Beam,” it is both satisfying and pleasing to be pursued by keen readers seeking the next issue.

Enjoy the read.