With 15-years experience of reviving embattled businesses, K–2 Partners’ Tony Groom argues there are currently too many opportunists out there claiming to be experts at turnarounds. Here we find out why.
Are turnaround specialists thin on the ground?
Genuine ones are, but there are also a lot of people claiming to be turnaround specialists as it’s a lucrative role. In reality, there are very few professionals who have actually led turnarounds. Many acted as lawyers and accountants in a turnaround, but that’s different.
So they’re pretending to be something they’re not?
The main problem is the lack of experience out there. People are doing it as directors and I ask them: ‘Do you become a shareholder of the company you’re turning around?’ The answer is always ‘no’. People are happy to work if there’s no risk, whereas we like to take shares in companies that we turn around.
As far as you’re concerned, there’s a skills gap?
In the last seven years since the dotcom crash, there has been little demand for turnarounds and very few people have learnt the trade. People may have experience in insolvencies but that’s not a turnaround. Other people can show business leadership – that’s not a turnaround either.
Restructuring the balance sheet, changing operations, making redundancies – that’s a turnaround.
Why the ambiguity?
The problem arises from there being no consensus as to what constitutes a turnaround. Is a turnaround about saving money or getting money to creditors? Or is it about saving jobs?
How do you describe a turnaround specialist?
Basically, I’m a company doctor. Sometimes I act as an interim manager; I’m just brought in to replace someone at the top and provide some fresh thinking. By and large, a turnaround specialist is a person who brings about the change that you want and that’s different according to the situation. Some people specialise by industry, whereas others have a more flexible remit. I’ve worked in various industries and yet I have no experience in high street retail and, to be honest, I would run a mile from it – retail has very specific demands and business conditions.
Tony Groom is a partner at business recovery specialists K–2 Partners. He has 15-years experience as a chief executive officer, working as either a company doctor, turnaround manager or chief restructuring officer