Top 12 Outstanding Turnaround Management Firms for 1993
SMP Rounds Out 12 of the Best!
Strategic Management Partners
A nationally recognized turnaround management firm
specializing in interim executive leadership, asset recovery,
and investing in underperforming troubled companies.
Article SMP Library SMP Home Contact SMP
The T & W editorial staff made its selections of the outstanding turnaround management firms of 1993 using both public information and information provided to us by the firms. We appreciate the efforts of all participating firms and recognize the diffieulty many faced in describing often confidential assignments.
Our selection of Jay Alix & Associates, DSI and Alvarez & Marsal had as much to do with their unusual accomplishments in 1993 as their leadership position in the industry. Jay Alix & Associates' work with National Car Rental, a General Motors subsidiary, earned them a place on this year's list because the car maker has never sought outside consulting assistance before. DSI was included on our list because of increasing revenues every year for the last 18 years, the opening of two new of fires in Los Angeles and Boston, and the receipt of some of the largest fees in the industry during 1993. Similarly, we felt that assignments with Phar Mor, Gitano and Resorts International made 1993 a banner year for Alvarez & Marsal.
While most turnaround firms work across many industries, we felt it was important to include a few firms who bring expertise to industries undergoing dramatic change. Strategic Management Partners was selected for its work in defense conversion and corporate repositioning. Their work of rebuilding companies by developing new business was a favorite of the editorial staff.
The Pace Group's focus on health care, particularly HMO's and managed health care facilities, mandated their inclusion on the 1993 list. The world wide trend toward conversion of government run enterprises to private businesses landed Hadco, a firm specializing in privatization, on this year's list.
We also wanted to recognize those firms taking on particularly challenging assignmeets in 1993. We chose Sigoloff & Associates because of Sanford Sigoloffs decision to serve as Superintendent of the California school system, during a time when the nation's schools are facing unprecedented levels of violence and public criticism, as well as severe budgetary constraints. Palmieri made a place on the 1993 list for undertaking the turnaround of The Mutual Benefit Life Insurance Company, the largest failed insurance company in the history of the United States, with $13 billion in assets. Finally, we felt that Durkee Sharlit's turnaround of the Oakland Tribune, during a time when the newspaperindustry is facingconsolidation and extreme competition, was a noteworthy challenge and one that was successfully resolved.
While clearly many restructurings involved difficult decisions, scaling back of division operations and reduction in employment, the editorial staffhad abias toward firm interventions that went beyond financial restructuring and cost cutting to address marketing and product issues. Our selection of Glass & Associates, a medium sized firm, was based on a turnaround involving extensive changes to a product line. We were further impressed by the opening of four new offices in 1993. Executive Sounding Board made our list as a particularly strong small firm. Their description of a health care assignment involving extensive operational changes impressed the editorial staff.
Hamstreet & Associates' turnaround of a saw mill owned
and operated by an American Indian tribe was not only extremely effective
but symbolic of the positive effects turnaround firms can have on companies,
employees and entire communities. The turnaround, which resulted in profitability
after six consecutive years of losses and an improvement in employment
levels, was another favorite turnaround of the T & W staff.
Strategic Management Partners, Inc. was selected for its work it defense conversion; particularly for transforming federal government con tractors into companies able to compete in new commercial markets boti in the US and internationally. We were especially impressed by SMP" ability to go beyond typical strictly balance sheet restructures or crisis intervention processes and bring dynamic change based on addressing the core competencies of c ompanies who need to make dramatic market shifts SMP excelled in several criteria: Undertaking unusually challenging as signments, pioneering work in an emerging corporate renewal market where turnaround work can be expected in the future; developing creative solutions; and demonstrating outstanding results. In an era of corporate downsizing, SMP brings one hallmark to the market: It is imperative fo, companies to reinvent their businesses rather than lay off employees.
Strategic Management Partners is a transition management and consulting firm specializing in corporate renewal and strategic repositioning for forward thinking companies. According to John M. Collard, president and founder of the firm, "we believe that to enhance stakeholder valuation you must influence change and manage a company's transition. We concentrate on improving a company's value by focusing on the core strengths that will build a foundation for growth in new areas. Our strength is in focusing on 'going concern value' and 'business development' to yield the most beneficial valuation model results. We implement the transformation plan and grow a company to prepare it for ultimate 'cash out' at maximum value."
"We believe that a company must have a strong selling position in order to be vibrant and effect a successful turnaround. Cost cutting and balance sheet restructure alone isn't enough to sustain the growth needed to survive. There must be increased revenue volume if the company expects to handle the road to improvement," Collard says.
"We try to avoid bankruptcy at all costs. You can't control the process,
it is very expensive and few companies actually exit from bankruptcy as
a healthy entity. We stress putting the resources back into the renewal
of the organization, working with all stakeholders to preserve value and
save jobs," said Collard.
|A $25M public NASDAQ traded microprocessor based manufacturer defense contractor, provider to US Gov't, NATO countries and contractors; with 240 US employees and 60 European employees.||A $33M weapons systems development and deployment engineering services to U.S. government contractor providing, especially the air/space segments of the military, SDIO, NASA, and National Laboratories. With 300 employees.||A $59M systems integration, facility management, networking and engineering U.S. government contractor in the 8a disadvantaged business set-aside program, servicing federal government agencies. With 660 employees.|
|No sales force. Too many accountants and engineers. Losing money. Market shrinking with defense cutbacks. Bank called the credit line and imposed daily covenant certification. Trade creditors filing suits. Desperate for new capital and leadership. The classic turnaround situation.||No business development function or staff; had not won a major contract in 3 years. Market shrinking with defense cutbacks. Market direction uncertain. B&P funds deteriorating; profit margins eroding. High overhead rates. Prices not competitive. Backlog eroding. Desperate for cash.||Owner was part of everything, wouldn't delegate. 42 percent employee turnover. Business development and program management didn't work together. Had not won a major set-aside contract in 4 years. Never won competitively, at maximum size for 8a contractor. Bank called out of covenant loan. Losing money; no cash. Planned to become $200M commercial systems integrator in five years.|
|Identify crucial issues and isolate specific causes. Develop realistic long term plan for transition from "product to market" to "integration services" orientation, and a short term option to cut losses if the conditions prohibited a successful turnaround.||Develop a plan to increase sales win ratios. Shift out of defense into environmental air quality improvement to reposition the company to achieve greater value for the owner. Develop creative pricing structure and strategy review process.||Implement plan to graduate from 8a program. Build management team to operate in new competitive commercial and international marketplace. Increase sales win rates, and reposition company in new areas to get greater value for the owners.|
|Successful turnaround of public company. Return of value to investors. The company was recently sold.||New business at historic sales win rates, and expanded operations in new markets.||Winning competitive bids. Following realistic growth expectation of $120M in 5 years with 40 percent to come from commercial market.|
Reprinted with permission. Turnaround & Workouts magazine 1993. Copyright 1993, Strategic Management Partners, Inc.
We welcome constructive inquires. More information is available if required.
There is more to Strategic Management Partner's
Return to Home Page
John M. Collard, Chairman
Strategic Management Partners, Inc.
522 Horn Point Drive
Annapolis, Maryland [MD] 21403
Voice 410-263-9100 Facsimile 410-263-6094 E-Mail Strategist@aol.com
We serve as experts for comment or quote, please contact us at 410-263-9100
We welcome constructive inquires, please send via E-Mail to: Strategist.
Copyright © 1993-2008 Strategic Management Partners, Inc.