Journal of
Corporate
Renewal
June
2014
15%
TOTAL U.S.
WORKFORCE
21. 6 million in the category of management,
business and financial occupations account
for 15% of the total U.S. workforce.
139.9 MILLION TOTAL U. S. WORKFORCE TMA TARGE T AUDIENCE
If just 1% of 21. 6 million are involved
in business life cycle advisory, TMA's
target audience would be 216,000.
1%=216,000
REFLECTIONS
Our Evolving Role in
the Business Life Cycle
BY THOMAS M. KIM, CTP, TMA GLOBAL CHAIRMAN
many in the restructuring community are commenting about the changes in our
industry. One common refrain is that
since bankruptcy filings are down, the
restructuring industry is in decline. While
it is true that there are fewer business
bankruptcy filings now than at the peak
in 2009, the current number is not
far from the simple average of filings
over the past 20 years. However, that
analysis does not tell the whole story.
I disagree with the notion that the
restructuring market is in decline. There
are variations in the activity across
sectors and in different markets (lower,
middle, and large cap), but the total
amount of work is relatively constant.
The real disruptor is that the nature of
assignments has changed. Restructuring
activities are performed earlier in the
business life cycle and by a more
diverse group of professionals. This
means that TMA and its members face
a greater opportunity than ever before,
but we must adapt to the new normal.
A major factor in today’s market is the
availability of new capital. Historically
low interest rates and fewer attractive
investment alternatives result in a lot of
capital chasing limited opportunities. In
very liquid capital markets, when issues
are addressed early enough, there is a
good chance for a refinancing. When
issues are ignored for too long, there is a
good likelihood of liquidation or a quick
sale. Fresh capital allows some distressed
businesses to refinance their way through
trouble, but excess liquidity in the market
means there are fewer opportunities
for boot-strap workouts. On the other
hand, capital raises frequently require
some level of operational improvement
in order to succeed, which creates
opportunities for skilled executives.
The most significant factor impacting
our industry is when and how the
turnaround process is being performed.
The new entry point for these projects is
much subtler and more nuanced than
in the past. Economic stakeholders are
more sophisticated than ever, and they
are not always waiting for an irreversible
decline before they take action. They
recognize the early signs of an adverse
trend and promptly seek the advice of
performance improvement and liquidity
management specialists. These advisors
are not always the seasoned veterans
of hard-crisis situations or turnaround
specialists in the classic sense.
I am highlighting this issue because I
want to assure TMA’s constituents—its
current members, prospective members,
sponsors, and affiliates—that TMA’s board
is focused on staying ahead of the ever-
shifting restructuring landscape. As our
industry evolves, it’s incumbent upon us
to identify methods of reaching a broad
group of professionals who provide
business life cycle advisory services.
Many of these are business executives
who do not identify themselves as
core turnaround professionals with
bankruptcy and restructuring experience.
TMA has something very valuable
to offer this broader constituency,
and we have a unique opportunity
to recruit a wider audience.
TMA has traditionally focused on
the core restructuring professional.
In today’s market, with the focus on
comprehensive advisory services, TMA’s
outreach must be more inclusive. The
2013 World Almanac pegged the total
U.S. workforce for 2011 at 139.9 million.
Management, business, and financial
operations categories accounted for
21. 6 million, or 15 percent, of that total. If
just 1 percent of those professionals are
involved in business life cycle advisory,
TMA’s target audience would be 216,000.
TMA will broaden our mission and
educational programing to encompass
any professional involved in business
life cycle advisory, no matter where
they are on the wide spectrum of
proficiency. I encourage all advisory
professionals to join TMA in order to
build on their collective experience
and sharpen their individual skills. J
