The presentation takes a proactive approach to identifying early warning signs of financial and operational stress in businesses, rather than solely focusing on traditional indicators of insolvency. The key areas of discussion include:
• Engage timing: The importance of timely intervention in addressing financial and operational stress.
• The Business Health Curve: A framework for understanding the progression of a business's health and identifying potential areas of concern.
• Concept of Diminishing Optionality: The idea that as a business's financial and operational health declines, its options for recovery and turnaround also decrease.
• Early Warning Signs: The presentation highlights four key areas to monitor for early warning signs, including:
- Business Objectives: Are the company's goals and objectives clear and achievable?
- Customer Value Proposition: Is the business still delivering value to its customers and is it well understood?
- Resource constraints: Are there limitations on the company's resources (people, platform, processes)?
- Borrower Conduct: Are there any red flags in the company's behaviour?
• Approach: The presentation compares two approaches to addressing financial and operational stress:
- Traditional vs Value Creation: The difference between a traditional, reactive approach to turnaround and a more proactive, value-creation-focused approach.
- The Turnaround Process: A step-by-step guide to implementing a successful turnaround strategy.
The presentation aims to provide practical, actionable advice for businesses and stakeholders looking to identify and address potential issues before they become major problems.
