A veteran business executive, John Haag is currently a managing partner with California-based CallisterHaag Consulting. In his leadership capacity with the firm, he provides clients with a wide range of services, including risk management, venture capital consulting, and systems and process analysis. John Haag has also served as a turnaround consultant for multiple companies.
One of the most important traits for an entrepreneur or business executive is self-confidence, a can-do attitude that can help them lead companies through rough patches. Paradoxically, these very same traits can cause problems when business owners’ self-confidence and sense of independence blinds them to deeper problems within their organizations.
Deep-rooted company problems often require the perspective of an outside observer such as a turnaround consultant, who will observe and analyze a company’s structure and operations and make suggestions for improvement. Here are three signs that it might be time to call a turnaround consultant.
1. Feeble financials. Overextended credit, poor inventory management, and overloaded debt are a few signs that a company is in financial distress. A qualified turnaround consultant can conduct a rigorous analysis of the financials and create a plan of action.
2. Ineffective or overly concentrated management. A strong management structure allows mid- and upper-level managers the freedom to make decisions and take accountability. When all decision-making rests with one person, such as the CEO, this can create a leadership void at other levels of a company. Additionally, an ineffective or non-participatory board of directors is one sign of management inefficiencies.
3. Falling behind competitors. Sometimes market lag is the result of larger economic forces or seasonal business cycles, but there could be more fundamental reasons endemic to the company. For example, perhaps the company has not kept up with the latest technological trends in its industry. A turnaround specialist can analyze and identify areas of weakness and provide strategies for rectifying them.
