The professional work within the company is done in the components. The components include strategies, and each sub-component triggers different work packages. Specifics about these packages are not part of the overall structure of this standard since they go into considerable detail.
The components are:
- the Diagnostic Review Component (DR)
- the Emergency Procedures Component (EP)
- the Process Improvements Component (PI)
- the Financial Restructuring Component (FR)
- the Strategic Restructuring Component (SR)
- the Operative Restructuring Component (OR)
- the Marketing and Sales Improvements Component (MS)
Each component includes various sub-components (e.g., EP consists of EP 1, EP 2, EP 3, and so on). The Diagnostic Review Component is divided into an analysis phase and an evaluation phase.
Ten Support Components
Support Components, which are structured along the seven components, keep the turnaround process structured, organized, and controlled. The Support Components consist of:
- the Pre-Turnaround Component (PC)
- the Starting the Turnaround Process Component (ST)
- the Directing the Turnaround Component (DT)
- the Crisis Stabilization Component (CS)
- the Turnaround Component (CS)
- the Planning the Turnaround Process Component (PT)
- the Communication Procedures Component (CP)
- the Risk Management Component (RM)
- the Change Management Component (CM)
- the Closing the Turnaround Component(CT)
The four stages, which are bound by their definitions, divide certain activities.
- The Pre-Turnaround Stage includes PC and ST and parts of CP. The Pre Turnaround Stage includes all activities that are done before a formal and in-depth review of the organization can begin. These activities include those from the recognition that a turnaround is needed to planning the diagnostic review.
- The Diagnostic Review Stage includes DR and parts of CP, RM, PT, and DT. The Diagnostic Review includes all activities involved in analyzing the company, its environment, and its strengths and weaknesses. Toward the end of the Diagnostic Review stage, the TMT formulates strategies and plans the turnaround process.
- The Crisis Stabilization Stage includes PI, FR, SR, OR, CP, RM, CM, and DT. During the Crisis Stabilization Stage, the focus is on generating cash flow, stopping the loss of resources, and stabilizing the firm.
- The Turnaround Stage includes PI, FR, SR, OR, CP, RM, CM, DT, and CT. In the Turnaround Stage the focus is on improving operations, developing competitive advantages, and putting the company back on stable feet.
Change Control / Out of Tolerance Management
Change Control ensures that, if something does not go as planned or gets out of the pre-set tolerance levels, the matter is handled in a structured and controlled way, involving all required stakeholders to that process. Change Control ensures the proper flow of information within the company and between the company and outside stakeholders.
The Quality Review process ensures that the turnaround is performed according to the business case and the Turnaround Plan is undertaken in accordance with the needs of major stakeholders.
Risk Management ensures that risks are properly recorded, classified, and monitored throughout the turnaround process. If a risk becomes serious automatic risk control steps in with the creation of a preliminary exemption plan that becomes an exemption plan if the risk becomes immanent.
Change Management ensures the maximum possible support from outside stakeholders and employees by communicating the proper information at the right time to the right people and by motivating employees with compensation programs, involvement in the turnaround process, open-door policies, and a three-step change of the corporate environment. Change Management also involves changing the corporate culture if necessary.