"For a company, the descent into troubled territory may be a slow slide; product margins dip; sales cycles stretch, and team morale slides from urgency to resignation. Leaders can sense that performance is softening, but instead of making definitive, structural changes, they hesitate. Companies react with token fixes, making small austerity cuts, shuffling around leadership, and rebranding business units. But small changes only amount to small improvements."
"By moving slowly, the C-suite gives up most of the gains before they even start. When leadership fails to treat the problem as acute, any turnaround effort becomes cosmetic in nature. This is where most turnarounds stall. Execution gets hindered by compromise. Decision rights lack clarity. Stakeholders pull in different directions. Eventually, priorities blur and plans fizzle. Less than one in three transformation efforts improve performance and sustain it over time."
"The starting point for the leadership of these companies must be clarity: Define what the business does best and determine whether that is profitable at scale. That's the core, and anything that doesn't support it becomes a candidate for elimination. In successful turnarounds, companies simplify their operations and focus on high-margin, high-potential products or services. Companies that cut back on their product offerings can see a 0.9% boost in their profit margins."
Companies often enter decline gradually as margins fall, sales cycles lengthen, and morale shifts from urgency to resignation. Hesitant leadership commonly applies token fixes—small austerity cuts, leadership reshuffles, and rebranding—yielding only marginal improvements. Slow or cosmetic responses forfeit gains, create unclear decision rights, invite stakeholder conflict, and cause plans to fizzle. Fewer than one in three transformations sustain improved performance. Successful turnarounds require radical simplification and structural change: identify the business's core profitable strength at scale, eliminate non-supporting activities, concentrate on high-margin products or services, and reset the cost structure with decisive leadership.
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