In the dynamic world of business, companies can face challenging times requiring a turnaround to survive and thrive. But what exactly does turnaround mean in the business context?
Definition of Turnaround
A turnaround (company turnaround meaning) is the profitability recovery of a poor performing company. A self-sustaining, profitable business, most of the time “saved” in the context of a business turnaround, being the end goal for a turnaround in business.
Business Turnaround Definition
Business Turnaround refers to the strategic and operational process implemented by businesses to reverse a decline or recover from a difficult financial situation, ultimately leading to a positive transformation and renewed success. It involves identifying the root causes behind the problems, implementing effective solutions, and making crucial changes to improve the company’s performance, profitability, and overall reputation.
Whether you are a business owner, executive, or aspiring entrepreneur, understanding the concept of turnaround is essential to navigate and overcome challenging situations effectively.
Since TurnAroundBiz.com serves as the industry’s matchmakers for sourcing certified turnaround professionals with real-world turnaround experience offering an array of consulting services to revive a company, we will explore the core concept behind the turnaround.
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What does it mean when a company has a turn around?
A company that has been doing poorly and then starts to get better, financially and otherwise, is what a company turnaround is all about.
A turnaround typically refers to the process of a company returning to profitability after being in a poor financial state. To be considered a turnaround, the company oftentimes must undergo significant changes, including restructuring and other changes. In order to achieve success, a turnaround must be planned well in advance and executed with precision.
The operational definitions of turnaround situation and turnaround successes originate from researchers John A. Pearce II and Keith Robbins of George Mason University in which they found evidence proving that a standard definition of the meaning of a company having a turnaround hasn’t been deemed widespread. Instead, they found that researchers essentially mean the same thing based on 1) turnaround situation and 2) turnaround success. See the table below to see the experts differing views definitionally:
Pearce and Robbins go on to further propose:
“A stipulation that would tighten requirements for a firm to be considered as having experienced a turnaround would be that its performance during both the downturn and upturn periods must change at a rate greater than the industry average. The inclusion of this stipulation would serve to minimize the chances of studying spurious instances of business turnaround.”
– Pearce and Robbins 1993 article, “Toward Improved Theory and Research on Business Turnaround”
More about the turnaround business term
The use of term “business turnaround” hit critical mass in 1970 in which it became more popular in use of books, articles and research studies as depicted in the NGram Viewer of the term itself:
As the term became more popular, it began to standardize into a practice of helping struggling businesses as a standard profession.
Original Meaning of Turnaround
The business turnaround meaning is the most common meaning when it comes to turnarounds, however, the term of turnaround has been around for hundreds of years!
The word turnaround was added to the dictionary formally in 1936, meaning “reverse”, essentially. Before being formally added to the dictionary, it was commonly used and written as “turn around” which had the same meaning of turnaround then, too.
The Online Etymology Dictionary entry cleverly covers the meaning of turnaround as “turn (something) into (something else)” with 1880s references originating from closely related figures of speech.
The turnaround business meaning has evolved, being first recorded in 1939, according to Google’s NGram Viewer. Now online today, the same concept of turnarounds goes by similar meanings, too.
Synonyms of Turnaround (in Business)
Corporate turnarounds, Turnaround management, and Business restructuring are synonyms.
Additionally, there are other semantically related terms related to turnarounds, as presented by researchers John A. Pearce II and Keith Robbins in their 1993 Journal of Business article titled, “Toward Improved Theory and Research on Business Turnaround”. Variations of the synonymous meaning of a turnaround (in business) include “adaptive responses”, “entrepreneurial responses”, “recovery responses” and more as shown below:
Other Meanings of Turnaround
Quick turnaround, dramatic turnaround, and complete turnarounds are other meanings of turnaround.
A Business Turnaround is performed by Turnaround Consultants usually working for a Turnaround Company. A successful turnaround requires careful planning and execution. The goals of a turnaround may include reducing expenses, increasing revenue, restoring profitability, and improving morale.
Turnaround Company Definition
A turnaround company is a company whose business is to help other businesses perform the turnaround. A Turnaround Company is hired by CEOs, CFOs or board members in order to perform analysis, action and results in order turn around their companies.
What qualifies as a turnaround company?
Turnaround opportunities are abundant out in the business world, and though opinions will vary, we encourage those seeking help from a turnaround company to go with the one you feel is right for them and solving the specific turnaround need. One of the reasons why companies like choosing Turnaround Biz Services is because the expert on the other end has done it before. Our Turnaround Certification Courses have up to the capacity to train 10 new Certified Turnaround Consultants each semester. Maybe you’re looking for your favorite turnaround consultant’s favorite turnaround consultant, eh?
Meaning Takeaway
A turnaround in business is a complex and multidimensional process that requires careful planning, execution, and a thorough understanding of various aspects. By incorporating the strategies and insights covered, businesses can pave the way for a successful turnaround and achieve long-term stability and growth knowing the meaning.