Business Turnaround Management: How to Develop a Plan for Overcoming Business Challenges

The process of a company’s recovery, often referred to as turnaround, requires a multidimensional approach. Many managers tend to think that cutting costs and quickly implementing a few changes is enough to save an organization. However, in practice, these actions often fall short. So why do so many companies fail in the turnaround process?

1. Lack of managerial involvement

Any change within a company requires leaders who are actively engaged in the process. Unfortunately, key managers sometimes remain on the sidelines, not getting involved enough. This is a serious mistake—without their support, even the best strategies can fail. Leaders must be visionaries who inspire the team and guide the changes in the right direction.

2. Improper change management

Implementing restructuring tools alone is not enough. Proven change management techniques are needed to ensure that these changes are effective and sustainable. Change is a process that requires the engagement of the entire team, clear communication, and ongoing monitoring of results.

3. Obsession with finances

Organizational recovery is more than just cutting costs. Focusing solely on financial aspects, such as reducing expenses, may bring short-term benefits but doesn’t solve the core issues. Companies need to think more broadly—about internal processes, innovation, and employee development. Managers must understand that without this, cutting costs is just a band-aid for a larger problem.

4. Short-term thinking

Many organizations focus on quickly saving the situation, forgetting about long-term development. It’s a bit like treating symptoms without understanding the root cause of the illness. A successful turnaround requires a long-term vision—not only how to save the company now but how to ensure its future success.

5. Lack of a holistic approach

Organizations are complex systems, composed of many elements: processes, organizational culture, technology, and people. Focusing on just one of these aspects, such as finances, without considering the company as a whole, can lead to failure. Companies must be managed holistically, taking into account all the key areas of their operations.

6. Turnaround managers need to be exceptional

This task requires leaders with exceptional skills. A turnaround manager must be resilient, stress-resistant, charismatic, and versatile. Knowledge across various areas of the company’s operations, along with strong people management skills, is crucial. Such a leader must not only implement changes but also inspire the team to act, even in tough times.

In summary, the process of organizational recovery is not just about quick fixes and cutting costs. It’s a complex process that requires the engagement of leaders, proper change management, and long-term vision. Managers must take a holistic view of the organization, and they need broad knowledge and skills to successfully guide the company through difficult changes.

Is your organization ready for a successful turnaround?