The International Turnaround Management Standard (ITMS) is a project-management-based method to assist turnaround experts and professionals through a corporate restructuring process.

Mar. 5, 2014 – HAMBURG, Germany — Currently, turnarounds are a very common occurrence in companies. However, most of these turnarounds fail within 5 years as a result of the companies employing their own „loose guidelines“ of doing a corporate turnaround in which they focus on specific areas rather than focusing on the underlying causes of why the company is failing.

The ITMS was developed as a result of a 7-year research project led by Dr. Christoph Lymbersky of the Turnaround Management Society (just use once) on why most corporate restructuring methods fail. The team around Dr. Christoph analyzed 150 cases to try and figure out what leads to a successfulcorporate turnaround. Basically, the ITMS is considered currently as an industry standard manual to help your company through its restructuring process.

As a corporate restructuring framework, the ITMS has been structured to tackle the reasons as to why companies usually fail in turnarounds. This includes problems such as insufficient support of shareholders, targeting of symptoms instead of issues causing the company to fail and the use of unstructured approaches among other factors.

Structure of the ITMS

Basically, the ITMS serves your management team as a guideline of what is needed to be done, how they should do it, and who is to be informed and what other aspects need to be taken care of during therestructuring process. The turnaround process outlined in ITMS is divided into three major stages: stabilization, reorganization, and restructuring.

This turnaround standard incorporates a more organized structure which is divided into four stages and each stage is designed to include specific turnaround method of corporate turnaround management. Further, there are two overlapping stages within the ITMS turnaround framework: the retrenchment and the recovery stages. The main objective of the former stage is to help your company or organization secure its survival and to guarantee a positive cash flow as a result of liquidating, improvement of operating efficiencies, and investments among other factors. On the other hand, the goal of the latter overlapping stage is to get your company back on its growth path and be profitable in the long run. It is at this stage that your company diversifies and penetrates into other markets.

In a nutshell, the restructuring method proposed in this turnaround framework is structured to include four stages which employ specific techniques for corporate restructuring: Pre-Turnaround Stage (PS), Crisis Stabilization Stage (CS, Turnaround Stage (TS), and the Diagnostic Review Stage (DR).

The Benefits of the ITMS

The ITMS corporate restructuring framework offers a number of advantages for your troubled business, restructuring experts, or any entity or party involved in the restructuring process. Some of these benefits include performing turnarounds in a structured manner, allowing the repetition of restructuring management methods, and problems to be encountered are indicated early throughout the turnaround process.

Additionally, the ITMS allows the turnaround process to have an organized beginning, middle, and end; ensures that stakeholders are involved at the right time throughout the turnaround management; and provides clear and proven channels of communications between the restructuring management team and the rest of the entity. Lastly, it provides an agreement on the required deliverables at the beginning and continuously monitors the actual corporate turnaround situation against an entity’s requirements.

Online Classes

It is recommended to take an online class to understand the full concept of the International Turnaround Management Standard. The Turnaround Management Society offers self study online trainings starting at 199 USD.

For more information visit the Turnaround Management Society website:

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The Turnaround Management Society released the TM Society App today. The App can be installed on Android and iOS devices. Windows Phone is currently not supported but will be soon. The App features the Turnaround Management Journal online version, recent videos from and about members as well as the latest information and updates on the International Turnaround Management Standard.

The Turnaround Management Society is an industry specific organization for Turnaround Management. Its members are turnaround professionals, distressed dept investors and academics.

It is the objective of the Turnaround Management Society to bring together the knowledge of Turnaround Management academics and the experience of Turnaround Management professionals. The TMS provides a link between academics who are engaged in research and the professional community that seeks research outcomes and provides academics with professional insight, guidance and feedback.

Besides supporting academics around the world and providing them with a forum for exchange of information with other academics and practitioners, we are also engaged in research ourselves. Our two ongoing projects are the ITMS and the database of successful turnaround management strategies and cases

You can find the app by typing  into your phone or by scanning the QR-Code:

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– An appeal to learn from past crisis, competitors and the best

After the attacks of September 11, 2001, airlines got into serious trouble and were forced to cut costs and routes all over the world quickly. Some airlines in the US that did not have enough financial resources went into Chapter 11 protection in order to cut costs faster than would otherwise be possible. One of the companies that survived this difficult time without such protection was American Airlines.

The US airline market has been consolidating for several years, which is a healthy development. Until recently, there were four big US carriers, which is probably too many for the size of the market, as there might only be two that can operate profitably in the long run. This consolidation is an international development, although it will probably take longer in Europe because some airlines are governmentially backed (AirFrance/KLM, Alitalia) and because Europe consits of many countries with different laws, which stretches the merger process. Still, there are signs that, even in Europe, the consolidation process has begun. Hungarian Malev and Spainair are bankrupt, Olympic is almost there, Alitalia has never been very profitable, and Air Berlin survives only because Ethiad is backing it up financially. In the long run, we will see some substanitial consolidation that might end in Lufthansa’s and AirFrance/KLM’s dominating the European market.

Even though all big US airlines seem to run into trouble at one time or another, their  management does not seem to learn from the industry’s mistakes. Compared to non-US airlines like Lufthansa, Singapore, and or Emirates, American’s finances are much worse.

Currently, AMR, the group to which American Airlines and American Eagal belong, operates about 900 airplanes, serves more than 250 airports in about 50 countries, and employs about 88,000 employees. In December 2011 alone, the company lost US$ 904 million.

Once a strong airline that survived this serious crisis on its own account, American was forced to file for chapter 11 protection in November 2011. Since it did not use its time and financial power to restructure the company to make it more competitive, its competitors have lower costs and can operate more profitably. What followed had to happen since American didn’t adapt to its competition’s lower cost structure. The fleet is much too old, maintenance costs and labor costs are too high to compete efficiently. Therefore they filed for Chapter 11 at the beginning of 2012.

In this case, leading the company into Chapter 11 made sense, as it will allow management to renegotiate employees’ contracts, which would otherwise be difficult given the traditionally strong unions in the airline industry.

Possible ways out…

US Airways has been looking for a partner for a while because it is at risk of not being able to keep up with other airlines that have merged over the last couple years. A merger could bring significant advantages in terms of providing routes to customers and cost reductions. Currently, US Airways is competing with American on numerous routes, lowering earnings for both of them.

A merger with Delta could be difficult because both American and Delta are (along with United Continental) among the three largest airlines in the US. A merger would probably not be allowed by US Department of Justic (DOJ).

A takeover by TPG would draw the DOJ’s attention, and such a takeover would call for some significant restructuring and a risky turnaround plan. However, if it stays alone, American will not be able to profit from the economies of scale it would if it merged with another airline.

American’s current CEO, Tom Horton, does not believe that a merger with another airline would benefit American or its shareholders, but I tend to disagree. The stakeholders would certainly profit from a merger if it lifts the airline into first or second place in the list of the largest US airlines. Costs could be cut significantly because most routes are not exclusive to American but shared with a competitor; a merger would end the price war on routes on which the merger partner currently competes with American. Furthermore, less ground personal would be needed, because fewer planes would be necessary to serve the same route; redundancy would be eliminated. A merger would probably be the best strategy for laying off the most employees and chapter 11 does make this step easier than ever. It would be a dramatic step but it would mean the best chances for surviving.

If American continues to go it alone, it will still have to cut costs and workforce without benefiting from the advantages of a merger. It would need to retain redundancy with other airlines with which it shares routes, and it would need to invest sustantially in marketing activities lower its fares, or invest in higher quality service than the competition in order to compete. Furthermore, there would still be no getting around laying off employees—perhaps not as many as would be laid off with a merger, but the remaining employees would have to agree to wages that are likely to be lower than the competition’s wages. In any case, all possible strategies would be more cost-intensive than a merger. Even if American could implement a cost structure with lower wages than those of the competition, it would still not be profitable for a long time because of its high-interest debt, a disadvantage that the competion does not share.

So far, I have not seen American pursue a strategy that clearly says how the company plans to survive its competition and compete in the long run in a highly competitive industry. So far, the actions Horton has taken and the statements he has made lead me to believe that his strategy is mainly about cutting costs. To my knowledge and experience, to achieve a sustainable turnaround it is necessary to pursue a strategy that is different from the one that got the company in trouble in the first place (if there was one…) and different from the competitors’ strategies. American will have to be better than the competition, and being better is not only about having lower costs. This is a critical part of American’s task going forward, especially if the company does not want to merge.

Horton’s current plan is to lay off 13,000 employees (15% of the total workforce), including 2300 flight attendants, and to cut costs by at least 20 percent, or about 2 billion USD. 1.25 billion in savings will result from cutting wages and laying off employees.

This kind of cutting of personnel probably means that there will be fewer attendants on the planes as well and fewer personnel on the ground. However, I cannot help but wonder how Horton expects to keep up the airline’s level of service—an important factor in a highly competitive environment—with fewer employees (and more unhappy ones, if wages are cut). Some cuts will have no effect on service because routes will be canceled and planes not be needed, but there will also be cuts where the customers see and feels them. I find this strategy to be questionable in the current situation. In my opinion, there will need to be cuts in the workforce, but there must be compensation for these cuts on other sides, such as by using a much modernized fleet. This compensation for customers is a necessity American won’t be able to get around if it wants to stay alive.

The key question here is this: how can American keep up the high maintenance requirements of its old fleet with fewer employees who are likely to be demotivated because of salary cuts. I predict that the good employees in some areas will leave the company to work  at the competition’s hangar next door, so I see no way that American can keep up the old fleet at the substantially lower costs it would need. Some airline veterans might remember the AirTram ValueJet case, in which lowering maintenance costs, paired with demotivated employees, led to one crash and another near-crash. Therefore, I see it as absolutely necessary to replace the old fleet, possibly by leasing new planes that require less maintenance, less fuel and that can be operated with fewer employees. There are however also signs that the management has learned from some mistakes; in July 2011 American ordered 260 new jets from Boing and Airbus, some of which will be leased. This is a first important step toward reducing costs and improving the customers’ experience at the same time. Whether the orders are kept under chapter 11 and whether the planes are available in time is another question.

Over the last few years I have analyzed and plotted turnaround strategies for over 150 insolvency and corporate crisis cases. None of them reached a sustainable turnaround without a clear strategy that set the company apart from its competition, and almost no case survived by cutting costs alone. In my opinion, American needs a clear, holistic turnaround plan that is communicated clearly throughout the company and that leads to a strategic advantage in the industry. Otherwise, American might survive in the short term, even if must merge with a competitor to do so, but it will fall back into trouble in a few years.

To be continued…


About the Author:

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Dr. Christoph Lymbersky is a Certified International Turnaround Manager (CITM) a corporate turnaround and restructuring strategies specialist and as a top management consultant responsible for corporate restructuring programs at Detecon International. As a distinguished turnaround leader, he also serves as the director of the Turnaround Management Society, an international non-profit organization of turnaround professionals, consultants, and academics dedicated to advancements in the corporate restructuring, transformation, and turnaround industry.
Recently Dr. Lymbersky has published the International Turnaround Management Standard a guided system for corporate restructurings and transformation processes.

The Turnaround Management Journal is available for print and some old versions are available as a download. If you want to order printed copies or the current edition please visit

Turnaround Management Journal 02/2011

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Turnaround Managment Journal 02/2011 small size









In this issue:

Introducing the International Turnaround Management Standard
by Dr. Christoph Lymbersky

The Importance of Post-Merger Integration
by Dr. Mike Teng

Value Creation Model: Built To Sell
by John M. Collard

Managing People And The Process Of Change
by Mark Blayney

Are Your Communication Strategies Really Engaging Employees?
by Marcia Xenitelis

Strategies Behind Crisis Management
by Dr. Stephanie A Parson

Crisis Management – or Managing a Crisis
by Clive Simpkins

Never Waste a Crisis – A Real Leadership Opportunity
by Henrik von Scheel

Member Interview with Marc Wagner

12 Reasons Why People Resist Change
by Torben Rick

Crisis Management – Expert Strategies For Turnarounds and Liquidations by Lee Hiller

Crisis Management and Business Continuity by Ebi Akpeti

BP Crisis Management: Being a Good CEO Doesn‘t Make You a Good Spokesperson
by Jem Thomas

Toyota Recall Crisis by Alice

Increase Performance Through employee Engagement by Torben Rick

World Class Corporate Crisis and Communications Teams by Tony Ridley


List Price: $14.99

8″ x 10″ (20.32 x 25.4 cm)
Full Color Bleed on White paper
72 pages
ISBN-13: 978-1466450059
ISBN-10: 1466450053
BISAC: Business & Economics / Management

Turnaround Management Journal 01/2011

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In this issue:

SAAB`s Questionable Turnaround Practice by Dr. Christoph Lymbersky

All Leaders Are Not Created Equal by John M. Collard

How Can We Define Leadership? by Nauka Shah

CVA, an Insolvency Rescue Procedure by Mark Blayney

Change Management Tips Used By Turnaround Companies by Dr. Mark D. Yates

How To Engage Employees With Technology Based Change by Marcia Xenitelis

Strategies For Managing Change – 9 Failure Reasons That You Can Avoid by Stephen Warrilow

Transformational Leadership Theory – By Attila the Hun – How NOT to Apply It to Change Management by Stephen Warrilow

The RASCALS Principle by Eugene Rembor

10 Priorities for Every Leader by Rabison Shumba

Strengthening Corporate Health – 18 Principles by Dr. Mike Teng

Member Interview with Eugine Rembor by Dr. Christoph Lymbersky


List Price: $12.99
8″ x 10″ (20.32 x 25.4 cm)
60 pages
ISBN-13: 978-1456493097
ISBN-10: 1456493094
BISAC: Business & Economics / Management