Turnaround Management Firms: Messy Economy Makes Them Great Job Targets
In a down economy, many troubled companies turn to turnaround management firms to get them through a crisis.
can find a job via turnaround management firms in several
different roles: as a firm member, as a consultant, or by them
placing you as a senior executive in one of the firms that they are
What is a turnaround management firm? Turnaround management firms (also called crisis management firms or workout firms)
are consulting firms that are paid to stabilize companies that can’t
make ends meet. In almost all cases, the turnaround firm takes
complete control of the management of the company, with one of the
firm’s top members becoming the acting CEO. They may also bring
in additional firm members to work at the company in other consulting
roles, particularly in finance. A high percentage of their client
companies are in Chapter 11; most others are trying to stave off a
Chapter 11 filing in any way they can. These consultants may work
on many turnarounds at once; one turnaround firm partner told me that
he was acting CEO at five companies simultaneously. .
Turnarounds are not for the faint of heart. The
client companies always have cash problems. They generally are
having problems getting anything from their suppliers, who haven't
gotten paid since the Dark Ages. Suppliers are triaged, and those
deemed least essential are simply ignored and not paid. It goes
without saying that there will be staff reductions. One
turnaround consultant told me, “The employees at my client companies
always say that we can do things more efficiently - we're going to use
the copier better, and we’re going to cut down on waste on the
production floor. I know that that will never be enough, so my
rule is that 50% of the cost reductions have to come in heads - staff
This may not sound that encouraging, but this turmoil creates career opportunities.
In most cases, the top executives are not simply eliminated. It's
hard for a company to get by without a CEO, CFO, Chief of Operations
and Chief Marketing Officer. However, they are frequently replaced
during or at the close of the turnaround process. In particular,
the CEO and CFO rarely survive a workout.
So you could find your
next job by having a partner at a turnaround firm make you the CFO at a
company she is turning around. Or, if you are unemployed, she
could bring you on as a short-term consultant at one of her gigs.
She might like you so much that she makes you a full-time turnaround
consultant at her firm.
Turnaround consulting jobs generally
require heavy travel, but often don't require that you relocate, as the
work is done at the client’s site.
You may notice that
turnaround consulting firms frequently have more names on the door than
partners. They frequently lose partners and other consultants to
client companies, who feel there is a real upside at a particular
So, if you have nerves of steel, and hopefully,
some kind of turnaround experience under your belt, consider contacting
turnaround management firms to find your next job.