Partner: GCS
Companies facing financial distress are in desperate need of change and a lifeline that will help the company overcome its current challenges.
However, during this time, it is often difficult to see the woods for the trees. Genesis Corporate Solutions firmly believes that in these situations, an independent business review (IBR) can offer significant benefits.
The Money Marketing article points out that an independent business review is a comprehensive audit or analysis conducted by an external party. It offers a fresh, unbiased and objective assessment of a firm’s operations and overall health.
A well-executed independent review acts as a mirror reflecting the firm’s reality
Outside of the box
The Money Marketing article points out that this outside perspective can be incredibly valuable as it sees beyond the confines of the firm, peering into areas internal stakeholders might unintentionally overlook due to familiarity, entrenched practices or corporate blind spots.
A well-executed independent review acts as a mirror reflecting the firm’s reality, emphasising its strengths and casting a light on areas that require attention and improvement. It slices through layers of internal assumptions and offers insights grounded in empirical data and a wider industry perspective.
A gap analysis can be a game-changer for your firm. They provide a deep dive into a company’s operations, strategies and processes, helping pinpoint inefficiencies, inconsistencies or unexplored opportunities. They unlock various facets such as workflow management, time and diary management, team skills and leadership effectiveness.
The article adds that, in doing so, these reviews can help identify potential bottlenecks that may be hindering productivity, growth and innovation.
The Money Marketing article points out that in a world where consumers value transparency, a review of your business serves as a testament to a commitment to openness. With a clear understanding of where the company stands, businesses can map out a path to reach their desired goals, whether that’s sustainability, scalability or saleability.
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Clarity is important
These reviews foster clarity around the company’s purpose and help create alignment among team members, guiding them towards shared objectives. They facilitate the formulation of robust, realistic and results-oriented plans to achieve these goals.
The Money Marketing article points out that in a world where consumers value transparency, a review of your business serves as a testament to a firm’s commitment to openness. It demonstrates a proactive stance towards accountability, a desire for continuous improvement and a dedication to meeting the highest industry and professional standards.
Such a commitment can significantly enhance a firm’s reputation, cultivating trust and confidence among stakeholders. A positive review can boost client confidence and employee morale.
Just like regular health check-ups are vital for maintaining physical health, independent reviews should be conducted frequently (or when you have business changes – i.e. new people, new regulatory policies, new systems, etc) to ensure the sustained health and success of a financial firm.
The article adds that in financial sectors, where reputational risks run high, the value of independent business reviews is amplified
Review often
The Money Marketing article points out that, however, a general rule of thumb would be to conduct them annually. An annual independent business review allows firms to keep their finger on the pulse, taking stock of their performance and progress towards strategic goals. It helps detect any issues or inefficiencies early, enabling timely interventions and course corrections.
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In this industry, where financial and reputational risks run high, the value of independent business reviews is amplified. These reviews equip firms to keep up with changing regulatory demands, adapt to market trends, manage risks effectively and maintain their competitive edge.
They provide insights that firms can leverage to design effective risk management strategies, ensure compliance with regulations and make informed decisions that drive growth and profitability.
Taking centre stage
When conducting an IBR, or being involved in one, it is critical to keep an open mind and approach tough situations with innovative thinking that distressed companies often overlook while they are focused on survival.
A Turnaround Talk article points out that if companies consider doing risk management at the level that we discussed above, there may be a skills issue. Not many executives will be skilled enough to do a thorough evaluation of the risks that they face or equate them in the way that I have point out above.
Companies do carry out risk management analysis. It is a corner stone of any SWOT analysis where the strengths and weaknesses are internal to the business while the opportunities and the threats are external to the business. Responding to risk may be as simple as a slight adjustment to an operating model or increasing the price of a product or service.
However, it can become complicated and that is where the skills of a BRP or a turnaround professional becomes important. When implementing a rescue, BRPs are often required to consider a number of different operating models that would benefit the company. These are obviously considered with the company’s risk appetite in mind. This also goes hand-in-hand with a thorough independent business review as this kind of assessment can only be conducted when a full view of the company’s current operational structure is taken into account.
