The ITMS has advantages for the entity in trouble, the Turnaround Leader, the turnaround project itself, and other parties that are involved with the turnaround process, such as stakeholders.
Some of the benefits that a single structured method for turnaround projects can bring include:
- The turnaround is done in a structured way.
- The turnaround management method can be repeated.
- The turnaround management method can be taught.
- The turnaround management builds on experience.
- Problems are indicated early throughout the turnaround process.
- Every person involved in key functions has a clearly defined role and knows what to do, what to expect, and how, when, and where to do it.
- Tasks that run out of tolerance, problems, and issues are dealt with in a specially designed way.
- Communication is structured.
- Using a systemic approach, the remedies are aimed to redesign the operational structure rather than to apply a quick patch that will not last long.
- The turnaround process has a controlled and organized beginning, middle, and end.
- Components are regularly reviewed against the Turnaround Plan and the turnaround business case.
- Decision points are flexible.
- If components are out of tolerance or deviations occur, automatic management controls are triggered.
- It ensures the involvement of stakeholders at the right time throughout the turnaround management component.
- It provides clear and proven communication channels between the TMT and the rest of the entity.
- It provides agreement on the required outcomes at the beginning and continuously monitors the actual situation against the requirements.
Advantages for the Troubled Firm
Firms that applying the ITMS can gain the following advantages by using the ITMS:
- A controlled way of handling change in terms of investments and the return on investments
- A controlled environment for turnaround management situations
- Active involvement of users and stakeholders throughout the process to ensure that the outcome will provide the greatest possible benefits and returns for the stakeholders and the entity
- An approach that distinguishes the TMT from the company board so that the approach is the same regardless of the industry in which the troubled company operates
- Benefits provided to the board and stakeholders of an entity through a controllable way of using resources that manages the risks connected to a turnaround situation effectively
- A common language for all parties involved in the turnaround process
- Clear communication between sub-components and task owners
- In most cases, interconnected key action items in the Turnaround Plan so ‘no department can operate in complete isolation from the rest of the business’
- Formally recognized ITMS responsibilities within the turnaround process with a focus on what needs to be delivered, when, by whom, and why, and how it needs to be done.
- Easier and quicker access to private equity investor’s money, since the analysis and due diligence of the troubled company is done independently by the TMT.
Turnaround Leaders using the ITMS can:
- Provide brief and regular management reports
- Establish terms of reference as a prerequisite to the start of the turnaround process
- Perform communication, authority, and delegation in a defined structure
- Divide the turnaround process into manageable stages in order to plan accurately
- Ensure the commitment of required resources and funding before every stage by obtaining and ensuring approval
- Keep meetings between the TMT and the stakeholders at a minimum but ensure that they take place at vital points throughout the turnaround process
- Keep their hands free to focus on what is important and what they do best.
Advantages for Stakeholders
The ITMS provides stakeholders with several advantages can:
- participate in quality checks during the turnaround management component
- ensure that their requirements are met or in other ways satisfied
- be informed right away if something goes wrong without being directly involved in the turnaround process because ITMS uses „management by exception,“ so the turnaround management has certain tolerances in which it can operate freely and outside of which notifications are triggered.
- be informed about the progress of the turnaround process at regular intervals
- participate in the turnaround process on the advisory board.