Finance is everything: advice from turnaround managers

Purpose - There are many reasons why companies drift - or plunge - into financial disaster. Factors such as market share loss, excess debt, management problems, technology changes or credit fluctuations can all play roles. In fact, the number of risks facing corporate officers is enormous today and simply keeping abreast of it all is a colossal task. As a result, not all managers and firms can cope, often resulting in a turnaround situation. The purpose of this paper is to highlight what sets successful turnarounds apart from failures and the most frequent underlying causes of the problems faced by companies in turnaround situations.Design methodology approach - This paper makes use of previous literature and work with clients to identify a relevant top ten list of management practices for keeping companies out of trouble.Findings - The academic and professional literature on turnarounds leaves many unanswered questions with respect to what sets successful turnarounds apart from failures. This paper describes ten basic lessons the authors have learned in turning around companies that managements can use to keep their companies healthy.Originality value - This paper sets the stage for identifying fundamental, but often overlooked, management practices that lead to financial crisis. Given the disparity in the literature on turnaround success-rates, the authors suggest that this paper contributes to this literature and also provides unique and timely advice for practitioners.