Speed of development in technology and economy over the past decades have yielded shorter cycle times of prosperity and recession. Some industries such as semiconductors, for example, have a cycle time of about two years.

The impact of this cycle time phenomenon creates situations where a well-performing startup or an on-going business can suddenly find itself in a crisis with poor performance across all key operating parameters as a function of a weakening of market conditions. These businesses can therefore be failing in the long term even as they are succeeding in the short term.

Renewal, not Revolution
Incremental changes in such volatile industry segments are not effective; rather, businesses that suddenly find themselves in trouble need strong change management in the form of business process renewal or a turnaround plan. And, if management does not initiate and drive the changes that a downturn requires, other stakeholders will step in to secure their interests. The changes put into motion in such a situation are then more reactive than proactive, and as a consequence often too dramatic for the issues at hand.

LG10 has substantial and long-term experience in priming and setting up organizations for renewal and in achieving required business goals with all stakeholders in mind.

LG10's methodology in renewal and turnaround situations involve action items such as:

• Review of current and desired future market position, with an analysis of emerging players and comparable offerings
• Review of key business models and position within the industry's value chain
• Identification of new growth potential for sustainable business through diversification of product offerings, partnerships and joint ventures
• Review business cost models, identify and correct value-draining activities
• Evaluate financial performance improvements through outsourcing, spin-offs and leasing
• Secure buy-in for renewal by key staff through joint business plan formulation
• Analysis of the implications of renewal strategies on human capital and creating inclusive change management for all relevant parties, at the right moment
• Securing of cash-flow and/or funding for the growth of the ongoing business
• Identification of potential partner candidates and initiation of contacts leading to deals
• Identification of key activities to build-up the new business and its revenue pipeline
• Transition out from the turnaround or renewal phase to normal business activity