Private Equity & Venture Capital Insights: How to Find a Good Turnaround and Restructuring Consulting Firm

Choosing a business turnaround consultant is an important decision for any struggling organization, but perhaps even more so for private equity and venture capital firms with struggling companies in their portfolios.

If you’re in this situation, you need reliable data to understand where each portfolio company stands at any given moment. You also need the right organizational structure and enterprise strategy across your entire portfolio of companies.

Not every turnaround and restructuring consulting firm has the breadth of technology and industry experience to restructure portfolio companies. In this post, we’ve outlined three questions that you should consider when choosing a consultant. 

3 Questions to Consider When Choosing a Turnaround and Restructuring Consulting Firm

1. Are you considering 100% independent consultants?

Every portfolio company is different. Putting the same enterprise software in both a manufacturing company and a professional services company is not always the best idea. 

You need a technology agnostic consultant that is up to date on the latest technologies. This is especially important if you’re looking to improve your data strategy.

An independent turnaround and restructuring consulting firm can help you organize each portfolio company to reach a higher level of performance by aligning your processes and people to your overall strategy. The consultant can then take that strategy and align your systems to enable your people and processes. 

Your consultants should ensure you have a data strategy that gives all constituents access to the information they need to effectively run the company and understand the status of each portfolio company.

Implementing the right technology is key in this regard. Most technology consultants specializing in business turnarounds are aligned with one or more technology vendors. The only way to ensure completely objective and unbiased advice is to know your consultant isn’t receiving any form of financial incentive dependent on the specific software you purchase or implement.

This means weeding out consultants that are resellers, receive referral fees from vendors and/or share in the negotiation savings – a tactic that is often gamed by vendors to serve as an indirect form of kickback. 

2. How broad is the experience of the turnaround and restructuring consulting firm?

Another benefit of choosing a technology agnostic consultant is that they’ve likely worked across multiple industry value chains and functional areas. This is beneficial for private equity firms that have a diverse portfolio.

Whether you are looking to transform an entire organization, elevate an organization’s customer service or disrupt an industry, you can count on technology agnostic consultants to craft your roadmap.

Many business turnaround consultants do not have this breadth of hands-on industry experience because their focus is too narrow.

3. How robust and innovative is the consultant’s methodology?

Business turnarounds and operational restructurings are complex with various phases for each functional area of the struggling business. You need a consultant that understands what each of these phases look like for each functional area, from financial, to human resources, to sales, etc.

Look for a consultant with a methodology that includes these phases and tasks:

Essentially, you need a consultant that can assist you with due diligence and developing the right organizational structure and enterprise strategy across your entire portfolio of companies. 

This consultant should ensure that your acquisitions are seamlessly integrated. In addition, they should report up to you, so you have access to key performance indicators of each portfolio company. 

Look for a consultant that can assist you with everything from initial due diligence during the pre-merger phase, to developing an IT strategy, to executing the seamless integration of systems once the deal closes.

Your consultant also should remove legacy systems and ensure you successfully enable enterprise data, so the combined entity has best practice data reporting.

For this methodology to be successful, the consultant must focus on turnaround change management throughout each phase. This ensures employees are positioned to quickly adapt to rapid change. This “hyper-efficient workforce” should be skilled, prepared and ready to move quickly into new roles. 

When looking for a consultant with a strong methodology, be wary of consultants that tout the value of having gray-haired veterans shooting from the hip based on experience, without structure. No one person – no matter how experienced or talented – can replicate the value of a finely tuned methodology that has been proven and improved over the course of many business turnarounds.

Ensure Access to Real-time Data

Panorama Consulting Group can deploy its high performing teams to quickly turnaround and/or integrate a portfolio company. Our business restructuring consulting is technology agnostic, industry agnostic, structured and proven.

Let Panorama be your “go to” consulting firm to help you seamlessly integrate your acquisitions and ensure access to real time data enabling you to simultaneously manage all your portfolio companies. Request a free consultation below to learn more.