When a company is in financial trouble, credibility suffers. A sudden downturn can send previous hard work and an excellent reputation into a downward spiral. How can you turn things around quickly to prevent insolvency and poor communications with stakeholders?

In this article, we guide executives on effective turnaround management strategies and explain why restoring credibility and enhancing communication during the turnaround process is critical.

Why Turnaround Management is Vital for Businesses Facing Challenges

An experienced business advisor will guide a company through a turnaround plan when its revenue has declined, and earnings are lower than expected. The organization may have trouble retaining employees, or expenses may be out of control. A company begins the turnaround process before it becomes insolvent to reshape the business structure and bring profits back up. Turnaround restructuring focuses on the financial structure, balance sheet, and valuation of the business and its assets.

Throughout this business turnaround process, the advisor and company executives must get buy-in from all stakeholders in the business. Investors, shareholders, directors, clients, and employees must trust the company’s vision and turnaround strategy. 

The success of a turnaround hinges on trust, and the turnaround team must first establish credibility with stakeholders by clearly outlining its plans and goals. Developing trust requires a communication strategy to clearly explain the organization’s goals while carefully listening to feedback and making informed decisions.

By communicating the strategy, operational plans, and long-term business goals, the turnaround team can successfully get everyone on the same page for a more cohesive and successful restructuring process.

Key Strategies for Restoring Credibility

How do you restore a company’s credibility? You must address the issues, communicate with vital partners, and be aware of outside perceptions. Developing robust marketing content can help in these efforts.

Prioritize Acknowledgment

Be honest with stakeholders and be the first to share important details with them, including acknowledging the company’s honest mistakes.

Consistent, Transparent Messaging

Keep messaging consistent across your company’s various communications. Address the issues directly. Keep your primary stakeholders informed during the turnaround process.

Monitor Company Brands

Stay informed of how news articles and social media mention your business’s brands. Respond quickly to any errors and misinformation. Keep an eye on brand reputation to deal with potential issues proactively.

Assess Your Online Presence

See what the public says about your organization and how your target audience perceives the business.

Build An Online Community Around Your Brand

An active online community helps you organically build and strengthen brand awareness, particularly during restructuring efforts. A solid online presence helps grow your customer base and increase sales.

Create Hard-Hitting Content

Targeted content marketing helps companies build brand awareness and credibility over the long term. Through quality content, businesses can connect with their audiences and offer solutions to their challenges.

Communication During Turnarounds

What communication strategies work best in turnarounds? While this depends on the company and its stakeholders, it is essential to be transparent and honest, communicate from different points of view, celebrate small successes, and use various communication styles and channels.

How Can Executives Improve Credibility?

Credibility is multifaceted and complex—and it’s vital for business success. Gaining the trust of customers, shareholders, business partners, and employees involves open communication, especially during a challenging turnaround situation. When executives face financial difficulties, they are often unaware of outside perceptions of the business and may not communicate effectively. It’s at difficult times like these that a business consultant with experience in turnaround management can be beneficial. They help guide companies through challenging situations while paying attention to how the public perceives the business and its brands.

Get Expert Turnaround Guidance From SCP

SierraConstellation Partners works with the company’s management team to assess the situation, create a turnaround strategy, and execute it for long-term profitability. Our seasoned team of former CEOs, CFOs, COOs, private equity investors, and investment bankers have extensive hands-on experience helping businesses successfully navigate turnarounds.

Find out how the SCP team can revitalize your company’s operations today. Connect with us.