The first operational fix in a turnaround. What to stabilise before you touch strategy.

An incoming manager arrives wanting to fix the strategy. The strategy is usually where the interesting work is, where the CEO’s judgment feels most valuable, and where the board most wants to see a plan. So the instinct is to spend the first weeks designing the new direction, and the instinct is wrong, because a strategy built on an unstable operational base is a strategy built on something that is still moving under it.

A company in trouble is a company whose operations are not holding. The cash is leaking, the clients are escalating, the team is firefighting, the delivery is unpredictable, name it… Strategy work on top of that is premature, because the strategy assumes a company that functions well enough to execute it, and a company in crisis does not yet function that well. The first job is to make the operations hold, and only then to decide where the now-stable company should go.

Why strategy-first fails in a turnaround

The strategy-first turnaround fails in a predictable way. The CEO designs a compelling new direction, presents it to the board, and begins to execute, while the operational problems that put the company in crisis continue underneath. The cash keeps leaking, so the runway the strategy needs is shorter than the plan assumed. The clients keep escalating, so the team that should be executing the strategy is instead absorbed in firefighting. The delivery stays unpredictable, so the strategy’s milestones slip from the first quarter.

The deeper reason is that a company in crisis cannot execute a strategy, because execution capacity is exactly what the crisis has consumed. The team is spending its energy on the fires, the leadership is spending its time on the escalations, and the cash is spending itself faster than the model says. A strategy is a set of instructions for an organisation with spare capacity to act on them, and a company in crisis has no spare capacity. The strategy sits on the shelf while the company fights to survive, and then the board asks why the strategy is not working.

Stabilising first is not a delay of the strategy work. It is the precondition for the strategy work mattering. The stabilisation creates the capacity, the runway, and the predictability that a strategy needs to be executed at all, and a strategy designed after stabilisation is also a better strategy, because it is designed with an accurate picture of the now-functioning company rather than a guess about the company in crisis.

Stabilise the cash first

The first fix is always cash, because cash is the constraint that ends the company if it is not held. Everything else can be wrong for a while; the cash cannot, because when the cash runs out the turnaround is over regardless of how good the strategy was.

The cash stabilisation is concrete and fast. Find the real burn from the bank statements rather than the reported figure. Find the real runway from the real burn and the real obligations. Then stop the largest, fastest leaks: the revenue that is invoiced but uncollected, the costs that produce nothing, the contracts that lose money on every transaction, the spending that continues out of habit rather than decision. None of this is strategic. All of it buys time, and time is the resource the turnaround is shortest on.

The collection of overdue revenue is usually the fastest win. A company in crisis is often owed significant money it has not collected, because the discipline of collection eroded along with everything else. Reinstating that discipline, chasing the receivables, tightening the payment terms, moving clients to prepayment or auto-collection, converts money the company already earned into cash the company can use, and it does so faster than any other lever. The cash stabilisation buys the runway that everything downstream depends on.

Stabilise the client escalations second

The second fix is the client escalations, because escalating clients consume the leadership bandwidth the turnaround needs and threaten the revenue base the turnaround is built on. A company in crisis usually has a handful of clients who are angry, escalating, and at risk of leaving, and each of them is pulling the CEO and the senior team into firefighting that prevents any other work.

The stabilisation here is to take the worst escalations seriously and personally, resolve the ones that can be resolved, and create a structure that stops them recurring. The CEO often has to step into the worst client relationships directly in the early weeks, because the relationships are senior and the company’s credibility is on the line, and a personally handled escalation that lands well buys back both the client and the team’s time. The goal is to move from a state where escalations arrive constantly and consume the leadership to a state where they are rare and handled below the CEO.

The structural fix matters as much as the individual saves. The escalations recur because something underneath produces them: a delivery process that misses, a support function that does not respond, a communication discipline that lets problems surface late. Stabilising the escalations means fixing the thing that generates them instead of just resolving each one as it arrives, because a turnaround where the CEO is the permanent escalation backstop never gets the CEO back to the work only the CEO can do.

Stabilise the delivery third

The third fix is delivery predictability, because a company that cannot deliver reliably cannot keep the clients it has or take on the new ones a strategy would bring. Unpredictable delivery is both a cause of the escalations and a constraint on growth, and stabilising it makes the previous two fixes hold.

The delivery stabilisation is about making the output predictable rather than fast. A turnaround does not need the delivery to be excellent in the early weeks; it needs it to be reliable enough that clients know what to expect and the team stops being surprised by its own commitments. That means realistic timelines honestly communicated, a clear view of what is actually in progress, and the discipline to stop promising what cannot be delivered. Predictable-but-modest delivery stabilises a client base that erratic-but-occasionally-fast delivery destabilises.

This is where the operational and the cultural overlap. A company in crisis has usually learned to over-promise, because over-promising is how it kept clients and won deals while everything was falling apart. Breaking that habit, moving the company to promising what it can deliver and then delivering it, is a cultural change as much as an operational one, and it is the change that makes the client base durable enough for a strategy to build on.

Stabilise the team fourth

The fourth fix is the team, because the people who execute everything else have usually been worn down by the crisis, and a team in survival mode cannot execute a turnaround. The strong people are often the ones most at risk, because they have the most options and the least tolerance for a sinking ship.

The team stabilisation starts with stopping the departures that would gut the company. The CEO identifies the people the turnaround cannot afford to lose and gives them a reason to stay: clarity about the plan, confidence that the crisis is being handled, and a visible sense that the company is moving from chaos to control. The early operational wins, the cash stabilised and the escalations handled, are themselves the strongest retention tool, because the strong people stay when they can see the situation improving and leave when they cannot.

The other half of team stabilisation is restoring the basic operating rhythm: the meetings that should happen, the decisions that should get made, the ownership that should be clear. A company in crisis usually has a broken operating rhythm, where decisions stall, ownership is ambiguous, and the team is reacting rather than running a cadence. Re-establishing the rhythm gives the team the structure to execute, and the structure is what lets the CEO step back from being the point of every decision.

Only then, the strategy

Once the cash is held, the escalations are handled, the delivery is predictable, and the team is stable, the company has the thing a strategy requires: the capacity to execute it. Now the strategy work is worth doing, because now there is a functioning company to point in a direction, a runway to fund the direction, and a team with the bandwidth to move.

The strategy designed after stabilisation is also a better strategy than the one the CEO would have designed in week one. The stabilisation taught the CEO the company, because nothing reveals a business like fixing its operations under pressure. The CEO who stabilised the cash knows the real economics, the one who handled the escalations knows the real client base, and who fixed the delivery knows the real operational capacity. That knowledge, earned in the stabilisation, is what makes the subsequent strategy grounded rather than speculative.

The sequence is the point. Cash, escalations, delivery, team, and only then strategy. A turnaround CEO who runs that order keeps the company alive long enough for the strategy to matter and designs the strategy with the knowledge the stabilisation produced. A turnaround CEO who reaches for the strategy first designs an elegant plan for a company that may not survive to execute it, and discovers, usually too late, that the operational base the strategy assumed was never there.