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Reversing the Slide: A Strategic Guide to Turnarounds and Corporate Renewal

Book Description

A just-in-time guide for revamping distressed companies

Drawn from the author's decades of experience advising, purchasing, and reviving distressed companies across industries, geographies, and sizes, Reversing the Slide is designed to help executives, managers, and employees revitalize downtrodden companies. It shows how to: select the tactics appropriate for each stage of distress; understand the use of entrepreneurial concepts; avoid pitfalls common to turnarounds; determine the legal, financial, strategic, and operational steps in the process; discover why the principal of "ready, fire, aim" should guide the decision-making process in situations with time pressure and significant uncertainty; and uncover the secrets of effective leadership and governance.

  • Contains step-by-step instructions for helping troubled organizations bounce back with vigor

  • Often quoted in the Wall Street Journal, the author is an authority on restructuring and downsizing

  • Offers a handbook for implementing a successful corporate turnaround

James Shein's Reversing the Slide is full of insightful advice on what works, what does not, and why it will prove invaluable to executives, managers, and employees in helping troubled companies before it's too late.

Table of Contents

  1. Copyright
  2. Introduction: Conditions and Causes of Distress
    1. Turnarounds as Entrepreneurship
      1. Lack of Cash
      2. Analytical Needs
      3. Hiring Difficulties
      4. Disbelieving Customers
      5. Time Sensitivity
      6. Centralized Decision Making
      7. Scarcity of Knowledge and Risk
      8. Supplier Problems
      9. Lack of Credibility with Lenders
      10. Great Chance for Equity Gains
    2. Causes of Distress
      1. External Causes
        1. Economic Downturns
        2. Industrywide Issues
        3. Shifts in Consumer Demand
        4. Changes in Technology
        5. Government Regulation
        6. Changing Interest Rates
        7. Changes in Business Model
      2. Internal Causes
        1. Blind Pursuit of Growth
        2. Overextension of Credit
        3. Insufficient Capital
        4. Fraud and Dishonesty
        5. Product Issues
    3. Conclusion
  3. 1. The Phases of Decline and Early Warning Signs
    1. 1.1. The Phases of Decline
    2. 1.2. Early Warning Signs
      1. 1.2.1. Management Analysis
      2. 1.2.2. Trend Analysis
      3. 1.2.3. Industry and Product Analysis
      4. 1.2.4. Diagnostic and Prediction Models
    3. 1.3. The Turnaround at EDS
    4. 1.4. Causes and Warning Signs Under Les Alberthal
    5. 1.5. Causes and Warning Signs Under Brown
    6. 1.6. Conclusion
  4. 2. The Turnaround Tripod
    1. 2.1. Strategic Restructuring
      1. 2.1.1. Core Competencies
      2. 2.1.2. Porter's Five Forces
      3. 2.1.3. Porter's Five Forces in a Turnaround Context
      4. 2.1.4. SWOT Analysis
      5. 2.1.5. Strategic Repositioning
      6. 2.1.6. Strategic Error: Stretching Core Competence
    2. 2.2. Operational Restructuring
    3. 2.3. Financial Restructuring
    4. 2.4. Solo Cup: A Three-Pronged Turnaround
      1. 2.4.1. Strategic Repositioning
      2. 2.4.2. Financial Restructuring
      3. 2.4.3. Operational Improvements
    5. 2.5. Conclusion
  5. 3. Leadership in a Crisis
    1. 3.1. Captains Courageous
    2. 3.2. Decisiveness: Ready, Fire, Aim!
    3. 3.3. Credibility
    4. 3.4. Communication in a Turnaround
    5. 3.5. Chainsaw Al
    6. 3.6. Board Accountability and Fiduciary Duties
    7. 3.7. Leadership Examples
      1. 3.7.1. Schwinn
      2. 3.7.2. J. Crew
      3. 3.7.3. Apple, Inc.
    8. 3.8. Leadership in Crisis: A Case Study
    9. 3.9. Conclusion
  6. 4. Cash Not GAAP
    1. 4.1. GAAP's Shortcomings
    2. 4.2. The 13-Week Cash Flow Model
    3. 4.3. Constructing a 13WCFM
    4. 4.4. Conclusion
  7. 5. Downsizing Is a Tool, Not a Goal
    1. 5.1. Business Process Reengineering
    2. 5.2. Downsizing: Pros and Cons
      1. 5.2.1. Advantages to Downsizing
      2. 5.2.2. Disadvantages to Downsizing
    3. 5.3. Short-Term Versus Long-Term Strategy
    4. 5.4. Reversal of Fortunes
    5. 5.5. Managing Morale During Layoffs
    6. 5.6. The Xerox Turnaround: Credibility Changes Everything
    7. 5.7. Conclusion
  8. 6. The Bankruptcy Process as Sword and Shield
    1. 6.1. The U.S. Bankruptcy Code
    2. 6.2. The Absolute Priority Rule
      1. 6.2.1. Advantages to Bankruptcy
      2. 6.2.2. Disadvantages to Bankruptcy
    3. 6.3. The Bankruptcy Process
    4. 6.4. Plan Confirmation
    5. 6.5. Cleanup on Aisle 11: Winn-Dixie's Bankruptcy Filing
    6. 6.6. Valuations Are Critical
    7. 6.7. Conclusion
  9. 7. Managing International Turnarounds
    1. 7.1. A Word on Fraud
    2. 7.2. Elan Corporation
      1. 7.2.1. Strategy Considerations
      2. 7.2.2. Operations
    3. 7.3. Financial Issues
    4. 7.4. LEGO Group
  10. 8. Turnarounds at (Intentionally) Nonprofit Organizations
    1. 8.1. Nonprofit Organizations: A Brief Definition and Primer
    2. 8.2. Similarities to For-Profit Turnarounds
    3. 8.3. Turnarounds Are Similar
    4. 8.4. Unique Challenges with Nonprofit Turnarounds
    5. 8.5. Politics and Nonprofits
      1. 8.5.1. United States Postal Service
      2. 8.5.2. Indian Railways
    6. 8.6. Nonprofit Turnarounds in Action: A Perfect Storm in the Big Easy
  11. 9. Turning Duds into Dreams
    1. 9.1. Why Buy a Distressed Company?
    2. 9.2. Searching
    3. 9.3. Assessing
    4. 9.4. Valuation
    5. 9.5. Structuring
      1. 9.5.1. Stock and Asset Purchases
      2. 9.5.2. Loan-to-Own
      3. 9.5.3. Article 9 Sales
      4. 9.5.4. Assignment for the Benefit of Creditors
      5. 9.5.5. Receiverships
      6. 9.5.6. 363 Sales
    6. 9.6. Managing the Turnaround: "Uh Oh!"
      1. 9.6.1. Acquiring Gerber
      2. 9.6.2. Small Deals Work Too
      3. 9.6.3. The Other Side of the Table
        1. 9.6.3.1. Moments of Glory, Years of Trouble
        2. 9.6.3.2. A Fresh Start?
        3. 9.6.3.3. The Takeover
    7. 9.7. Exiting
  12. 10. A Different Fresh Start
  13. Notes
  14. Acknowledgments
  15. About the Author