Otassca methodology for undergoing a typical turnaround management project has four aspects which are briefly described below:

• The Immediate Business-Action plan (1 month after Otassca’s initial engagement).
• The Weekly Management Committee is installed and meetings and follow up reports per area of action are developed.
• Preparation of a Full Business Plan (3 month after initial engagement)
• Follow up reports on results achieved during the OTASSCA participation and projections.
  
  

Otassca developed a methodology to undertake many kinds of recovery efforts. Since Otassca has been positioned as a hands-on management crisis firm, Otassca typically would start every case by first putting together the initial restructuring team. The principle of putting the team together: Promotion from within. In turnarounds the promotion from within is preferable, but not always possible. Sometimes, the companies undergoing a crisis do not have the right people in-house. In order to put together the internal team, Otassca would not necessarily follow the organizational chart of the company, but conduct independent in-depth, and informal interviews with assistance to the managers, the President, and the major stockholders. The skills of the managers involved in key areas of the company are analyzed and assessed. By this mean, Otassca is able to grasp the subjective stories of the company, rapidly, narrowing its focus and initial agenda.

After the initial preliminary turnaround management team is selected , the second step is to call a first meeting of the Management Committee. The Management Committee is typically a larger group. Many times, Latin American companies which face a crisis have three common denominators: they do not have regular meetings of their departmental managers; they do not have a common agenda or a clear perspective of the challenges ahead; and they do not gather and analyze systematically the comprehensive, relevant information about their business situation. The typically company – in-crisis - meetings are between the president and the managers separately. Often, the General Manager is a one-man show, and the company is all in his head. The aim for the first Otassca meetings is to initiate the process of creating an internal team. In the meeting, questions are asked to each person to offer - informally - what he or she believed was causing the cash flow problem or the lack of growth of the company. Everyone else listens.

In Latin America, corporate managers some times believe that their problem is simple: the company does not have enough money, and somebody has to put it up. Not too often do managers think in terms of why the company does not make money, and what changes have to be made to understand the needs of the customer. Therefore, the first management committe agenda focus on candid questions of why the company is in trouble from the perspective of each key player this frst meeting is important for two reasons: First, even if the managers are insincere and avoid confronting their boss, at least Otassca is laying the groundwork to reduce emphasis on “authority” and start talking frankly about the “business facts”. Also, by asking everybody in the Committee the key questions, equally and without confrontation, employees began gaining the sense of the team work needed to move on , which in Latin America is typically scarce. Second, even if their subjective estimates prove later to be wrong, at least every person in the meeting senses what others think about the problems facing the company. The results of the first meetings are to generate a rationale for team effort, a first-time experience for many of them.

The turnaround team then considered the next week’s actions. These include meetings with suppliers, customers and creditors, as well as requiring a formal and written report from each committee’s members to prepare a diagnostic, and preliminary solutions (excluding more cash) to the company’s problems. After every meeting, each member would receives a letter of the tasks pending for the next week as agreed in the Management Committee. Also Otassca sets individual meetings for the next week with each member of the committee in order to get a more personal view, and hands them a questionnaire which serves as the basis of the due diligence process. Normally in these companies, business information is not updated, nor does the steady habit of gathering it exists. Thus, Otassca creates the information beginning with structuring the formats for every department to present it, including always cash flows, market information, and production issues. This format produces weekly reports which the Management Committee regularly uses, a systematic measurement checklist which put everyone “on the same page” and producing a share Agenda for everyone.

Otassca also set an agenda to communicate with key employees, suppliers, creditors and customers. Otassca analyzes each account, constructs the cash flow, and establishes priorities for the next month. Otassca would meet with major suppliers, creditors and customers of the company and explain the methodology of work being undertaken, and asks for their perspectives on what the situation is, and what recommendations they might have to improve things. Otassca would always use the meeting with suppliers, creditors and customers to request and secure a one month period of grace for overdue balances (new purchases would probably be paid on delivery ). Then, an organized presentation analyzes the problems of the company, and articulates the preliminary solutions planned for the turnaround. If needed, a classification of all liabilities is made in order to propose a friendly reorganization plan. After each supplier, creditor and customer meeting, a letter is sent to confirm the agreements and the terms reached for a month of grace with each of them.

In the next three weeks an Immediate Action Plan is prepared and presented to the Management Committee. If approved, it would then be presented to the board of directors, and if approved, to the creditors. After the Immediate Action Plan is in place, the pace of the weekly Management Committees is maintained, and the reporting system is improved. The Agenda is aligned with the due diligence process indicated in the Action Plan and the needed information for the Business Plan is obteined.