If you've never been through a business turnaround before, it's easy to imagine someone walking into the company on Day One with all the answers.

That isn't how it works. Or at least it isn't how I work.

In fact, if someone starts offering solutions before they've taken the time to understand your business, I'd be concerned.

  • –Every company is different.
  • –Every management team is different.
  • –Every financial crisis has its own history.

After more than 25 years working with founder-led businesses, major real estate developments, and companies under financial pressure, I've learned that successful turnarounds don't begin with answers. They begin with better questions.

The First Job Isn't Solving Problems. It's Understanding Them.

When I'm first brought into a business, I don't assume I know what's wrong. I begin by listening.

I'll typically meet with the owner, founder, CEO, CFO, controller, or board to understand why they believe I'm there. Then I begin asking questions. Lots of questions.

One of my personal mantras has always been: "Ask a lot of questions, then shut up and listen."

The temptation is to start offering solutions immediately. Resist it. You're still gathering information.

Follow The Data, Not Your Assumptions

One of the biggest mistakes people make during a turnaround is falling in love with their own theories. I've learned to do the opposite. I follow the data.

That means understanding both the financial side of the business and the operational side. I want to know:

  • –What products or services generate the most profit?
  • –Which customers matter most?
  • –Where are the operational bottlenecks?
  • –How is cash flowing through the business?
  • –Who reports to whom?
  • –Which departments work well together — and which don't communicate?
  • –What does success look like when this business is healthy?

Numbers matter. But businesses aren't spreadsheets. They're groups of people trying to solve problems together. Understanding how those people interact is just as important as understanding the financial statements.

Walk The Shop Floor

One of the first things I like to do is spend time where the work actually happens.

  • –If it's a manufacturing business, I want to walk the production floor.
  • –If it's a construction company, I want to understand how projects move from estimating to completion.
  • –If it's another type of business, I want to see how value is actually created.

I don't limit my conversations to executives. I will also talk to controllers, sales managers, operations staff, executive assistants, receptionists, and supervisors. Everyone sees a different part of the business. My job is to assemble those individual pieces into one complete picture.

There Is Always At Least One Surprise

I've never walked into a turnaround without somebody in the company eventually saying: "I didn't know that was happening."

Not because management was hiding something. Because every organization develops blind spots.

The management team may be focused on declining sales while the real issue is poor communication between departments. The founder may believe cash flow is the problem when the real issue is an unprofitable division that's been quietly draining resources for years.

Sometimes everyone inside the business knows a different piece of the puzzle. Nobody has assembled the whole picture. That's one of the biggest values an outside advisor brings: perspective.

From Chaos To Focus

Once the picture becomes clear, it's time to build a plan. This is where communication becomes critical.

When people hear that a turnaround advisor has been brought into the company, many immediately assume layoffs are coming. Fear spreads quickly. People stop sharing information. They begin protecting themselves instead of helping the business.

One of my goals is to replace fear with focus. That starts by communicating honestly:

  • –Here's where we are.
  • –Here's what we're trying to accomplish.
  • –Here's the role each person plays.
  • –Here's how we'll know we're making progress.

People don't expect miracles. They want to know someone has a plan. They want a calm hand at the wheel.

Focus On the Biggest Problems First

Every struggling business has dozens of problems. Trying to solve all of them at once usually creates even more confusion. Instead, I prioritize.

Cash flow almost always comes first. Without cash, businesses don't survive long enough to solve anything else.

After stabilizing cash flow, attention shifts to the biggest bottlenecks: where are we losing money? Where are decisions getting stuck? Which products or divisions deserve more attention? Which ones need to be improved, sold, or closed?

This is where Pareto's Law becomes incredibly useful. Usually a small number of products, customers, or issues account for most of the business's success — or most of its problems. The goal isn't to work harder. The goal is to focus on the right things.

A Turnaround Doesn't Mean Saving Everything

One misconception about turnarounds is that every department, product line, project, or employee can be saved. Sometimes that's simply not realistic.

  • –Occasionally assets need to be sold.
  • –Sometimes divisions need to be closed.
  • –In some situations, staffing changes become necessary.

If staffing changes are required, I believe they should be thoughtful and strategic — not arbitrary. The objective isn't simply reducing payroll. The objective is building a healthier organization for the future: removing duplication, clarifying responsibilities, making sure the right people are in the right roles.

A successful turnaround isn't about preserving yesterday's organization. It's about creating tomorrow's.

When Do I Know The Turnaround Is Working?

Interestingly, the first signs rarely appear on the financial statements. I notice them in the people.

  • –Management meetings become calmer.
  • –Communication improves.
  • –Departments begin working together instead of blaming one another.
  • –Employees stop worrying about whether they'll have a job next month and start focusing on serving customers again.
  • –Information becomes more accurate.
  • –Problems get reported earlier.
  • –The company begins making decisions instead of reacting to emergencies.

Eventually the numbers catch up. Cash flow stabilizes. Profitability improves. Relationships with lenders and suppliers strengthen. But those are usually the result of better leadership and better communication — not the cause.

What I Hope Every Leadership Team Learns

When a turnaround is complete, I hope management remembers three things.

First, stay focused. Every business has opportunities. Not every opportunity deserves to be pursued.

Second, have a clear plan and make sure everyone understands it. Confusion is expensive. Alignment creates momentum.

Finally, avoid drift. Every decision has benefits and costs. Before chasing the next exciting opportunity, ask yourself what dominoes that decision sets in motion. Businesses rarely fail because of one catastrophic decision. They slowly drift away from the things that made them successful in the first place.

The Darcy Principle

A successful turnaround isn't measured by whether a company survives a crisis. It's measured by whether the business is stronger after the crisis than it was before.

That means restoring focus, improving communication, rebuilding trust, eliminating drift, and right-sizing the organization so future growth is sustainable.

My goal is never simply to save yesterday's business. It's to help leadership build a better one for tomorrow.