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The Turnaround Triage: What I Look at First When a Company Is in Trouble

A man sits thoughtfully with a laptop, illustrating the process of identifying and fixing the most important problems in a company turnaround.

When a company is in trouble, everything tends to feel urgent.

It usually isn't.

Some things are existential. Some are important. Some are noise. The first job is separating them.

I think of this as turnaround triage.

I want to know how much cash exists, what is coming in, what has to go out and when. I want to understand debt, payroll, taxes, leases, critical suppliers and any obligation capable of creating an immediate problem.

Then I look at revenue concentration and customers. Who actually pays the company? Which relationships cannot be disrupted? Is revenue declining because of the market, the product, execution or something else?

People come next because a distressed company can lose critical knowledge very quickly. Who is essential to operating the business? Who owns key relationships? Where is leadership strong and where is it failing?

Then I want the operating reality. What is working? What is consuming cash without producing enough value? Which projects have become sacred cows? Which assets can be monetized? Which commitments can be renegotiated?

Finally, I look at the capital situation in context. Raising money into a broken system can simply finance more of the problem. Before deciding the company needs capital, I want to understand what that capital would actually change.

Put every issue into one of three buckets

A simple way to create clarity is to classify problems as now, next or later.

Now contains threats to survival and control.

Next contains the changes required to stabilize and reposition the company.

Later contains opportunities worth pursuing once the first two are under control.

This sounds almost too simple, but distressed organizations often suffer from attention fragmentation. A clean sequence can itself create value.

The broader process is covered in Corporate Turnarounds. Triage is simply the opening move: stop treating every problem equally and identify the few things that determine whether you get the chance to solve the rest.

Continue exploring

This article is part of my Business & Strategy authority series. Continue with Business & Strategy hub, Unlocking Hidden Potential: How I Think About Business Strategy & Transformation, Positioning Is Strategy: If the Market Doesn't Understand the Value, the Value Is Harder to Unlock and Venture Building: How I Think About Turning an Idea Into a Real Business.

Chad McMillan

Chad McMillan is a creative entrepreneur and strategic advisor with over 20 years of experience in and around the capital markets, focused on finding hidden potential in companies, ideas, markets and people, and advancing what they can become.