In many places in the turnaround section of this site we refer to repositioning, restructuring, and re-engineering strategies and programs that are normally required to achieve a sustained turnaround.

Repositioning of the company generally refers to a strategic shift in its position in the marketplace. The following example illustrates this.

Case #7 – Repositioning to Restore Profitability and to Solve Financing Problem. Let's say, since we are close to Hollywood, we are retained by a client who is a supplier of various types of audio amplifiers, from consumer amplifiers to specialty units for industry. Because of the company's small size, despite the advanced and high quality nature of all its designs, the company is unable to make money while supplying a wide range of clientele. Moreover, the financing of production was a nightmare, when the profit margin on consumer models is small and the stores want drop-shipments from stock. Our solution would be to reposition the company, namely to offer only high-end specialty amplifiers, which often include some custom design work, which industrial clients agree to pay for (based on milestones achieved) . While total sales of the company would certainly drop, profit will appear almost immediately, and at the same time financing will cease to be a problem.

We use the term Restructuring only to denote changes in the organizational structure of the company. It should be noted that the expression "restructuring" is used loosely by the press to describe all types of major changes in the company, and sometimes to describe such changes together with the turnaround itself. This could cause confusion, and to avoid it and use the term meaningfully, we use the term "restructuring" only in the above sense.

Re-engineering of the business process, to which the press sometimes refers as the re-design of the company, is a term we use to denote mainly changes in the business process of the company, its modus operandi, i.e. the changes in the way things are done, and these are often the most challenging and fundamental. Because business process re-engineering sometimes starts with the analysis of the mission of the company, in some cases elements of re-engineering are identical with repositioning, but re-engineering can go much further.

Though the business re-engineering literature which we've all read does not directly say it, our own experience in unique product engineering tells us that business re-engineering uses the same interactive, iterative relationships as the process of designing and developing a complex piece of equipment, and often results in changes to the equipment itself.

Case #2 – Re-engineering to Reduce Operating Expenses. Some twenty-five years ago Chrysler was on the verge of a collapse. It was then that Lee Iacocca became its president and was charged with the turnaround. One of the things he did early on, was to look at the costs of shipping Chrysler automobiles to distribution centers by rail. In essence, the rail companies charged for distance traveled and the number of rail cars used. Everyone knew that, but It took Lee Iacocca to ask how many Chrysler automobiles typically fit on a rail car. The answer he obtained led to him to realize that by shortening these automobiles by 3 or 4 inches, he could save Chrysler several hundreds of millions of dollars a year, and he did just that. This was business re-engineering before even the term was invented. This work resulted also in technical re-engineering of the automobiles. It shouldn't surprise us that Iacocca's original training was as an engineer.

Although repositioning, restructuring, and re-engineering are distinct, they are also related, and one often involves another. Example: moving the quality control function from the Engineering to the Production department would be both restructuring and re-engineering, while changes to the quality control methods alone would fall under re-engineering. Re-engineering may also lead to a change of the very mission of the company – as happened in the above example of the producer of amplifiers, simply because of the repositioning.

Combined, the 3 R's of Turnaround – repositioning, restructuring, and re-engineering, cover most of the changes one could imagine in a business and encompass all seven stages of a successful business turnaround.