Emergency management
Emergency management has to stabilise the business, thereby halting the downward momentum
When does emergency management start?
Once turnaround situation assessment has been conducted and turnaround viability has been ascertained, the actual turnaround intervention starts with emergency management.
In crisis situations the two stages are often combined or overlapping.
Objectives of emergency management
The objectives of emergency management are:
- Securing the short-term future of the business through stabilising the distressed company.
- Laying the foundation for funding and renewal of the distressed company by allowing a window of opportunity for turnaround plan refinement.
Principles of emergency management
Important principle of emergency management are autocratic leadership, stakeholder management, and that cash is king.
Conservation and generation of cash takes precedence over the delivery of profit in the short term. This principle of placing liquidity before profitability requires a different mind set to the norm.
How long does emergency management last?
Emergency management lasts until the financial crisis has been stabilised and stakeholder support for the business has been regained.
Emergency management is not only a stage in the turnaround process, but a turnaround plan component in its own right (see stabilising the distressed company).