Addressing Flailing Performance: Business Turnaround Strategies for Sustainable Success
During times of uncertainty, performance can often falter. But when an organization faces sharp declines—whether in revenue, market confidence, or employee engagement and performance—swift action becomes a business imperative. A business turnaround is not simply a crisis response. It’s a structured opportunity to stabilize, realign, and reimagine the future.
Organizations facing a business turnaround don’t need quick fixes; they need focused leadership, disciplined action, and a structured path forward. Sustainable turnarounds rely less on sweeping overhauls and more on the ability to clarify priorities, rebuild trust, and align teams around what matters most. By helping leaders narrow their focus and measure what drives results, organizations can make the shift from reactive decisions to deliberate, high-impact execution—especially when the stakes are high.
Utilizing a four-phase roadmap, leaders can execute a successful business turnaround with an approach grounded in insight, action, and transformation. Each phase is designed to help leaders move from reactive decision-making to strategic, principle-based leadership. Rather than relying on quick fixes or surface-level adjustments, this framework empowers organizations to thoroughly diagnose challenges, focus on what matters most, and re-establish operational and cultural excellence.
Understanding Business Turnaround
The best time to plant a tree is twenty years ago. The second best time is today.
A business turnaround is the deliberate process of reversing poor performance, often marked by financial instability, internal misalignment, and declining stakeholder confidence. A business turnaround moves a struggling organization from decline to renewed stability and growth.
A turnaround may be necessary in several circumstances, including:
- Persistent revenue decline or market share loss.
- Liquidity and cash flow challenges.
- Significant drops in stock value or investor confidence.
- Large-scale layoffs or talent attrition.
- Repeated failure to meet strategic goals or execute on plans.
- Leadership turnover or credibility issues.
Say you’re running a mid-sized manufacturing firm that’s experienced a 20% drop in revenue over three consecutive quarters. Financial stress forces layoffs, further eroding morale and performance. Compounding this, your leaders are misaligned on priorities, and communication is inconsistent. These symptoms reflect more than operational failure—they reveal a breakdown in clarity, execution, and trust.
These are serious issues that can threaten the survival of an organization if not properly addressed. But because flailing performance is a multifaceted problem, how can organizations devise a plan of action that will have lasting, widespread results?
3 Phases of Business Turnaround Success
While understanding the conditions and risks of flailing performance is essential, a business turnaround depends on a clear-eyed assessment, courageous leadership, and an unwavering commitment to cultural alignment. This three-phase approach can often help businesses address ongoing performance issues and facilitate a successful turnaround.
Phase 1: Assessment and Diagnosis
Facing Reality and Understanding the Situation At-Hand
Turnaround begins with truth. Leaders must take a comprehensive, unbiased view of the organization’s current state, where it’s underperforming, why it’s happening, and what can be done about it.
This process begins by evaluating execution gaps and identifying the internal and external forces at play. Key questions include:
- Are our teams aligned on the most important objectives?
- Where are we missing on execution?
- Which metrics truly matter for a successful turnaround?
While lag measures like revenue and profit are important outcomes, it’s actually the lead measures—like customer calls made or product iterations completed—that should be the main focus. These lead measures are supported by individual actions that influence and achieve overarching organizational goals.
Having actionable insights like these can help organizations shift from reactive problem-solving to proactive execution. A successful diagnosis requires transparency and collaboration on the goals and activities that matter most.
Download our free workbook, 4 Steps to Refine and Execute Your Team Goals, to access our simple formula for successful strategic execution and start putting plans into action.
Phase 2: Strategic Planning for Turnaround
There will always be more good ideas than there is capacity to execute.
Setting a Clear Vision and Rebuilding Confidence
With insight comes focus. Once the current state of the organization is made clear, leaders must define a forward-looking vision paired with an execution roadmap with time restraints attached. Commonly, these roadmaps might span 90 to 180 days, which isn’t a long time for a long list of scattered initiatives to be achieved. That’s why leaders should set and focus on a Wildly Important Goal® (WIG®) that will deliver the most impact during the turnaround process.
Effective strategic planning during a business turnaround includes:
- Setting 1–2 high-priority objectives (WIGs) that address root challenges.
- Assigning ownership and accountability at every level.
- Ensuring tight alignment between frontline staff, middle management, and senior leaders.
A focused plan drives clarity. Clarity drives confidence. And confidence fuels execution. That said, confidence doesn’t always come automatically—and it can’t happen without shared belief in the effort. No turnaround succeeds without the people who make the work happen. Employees, suppliers, and customers must believe in the organization’s ability to rebound. That belief must be grounded in action.
Rebuilding confidence starts with transparent, trust-fueled organizational communication. Leaders must share the reality of the situation alongside the strategy for moving forward. When people feel informed and valued, they’re more likely to stay committed during difficult transitions.
Organizational agility teaches leaders to balance adaptability with consistency. Reaffirming values and reinforcing purpose give employees a solid foundation amid change. Leadership must also be visible, decisive, and compassionate. During instability, employees ultimately need reassurance from leaders who can guide teams through change.
Register for our live webcast, Turning Strategy Into Results in Uncertain Times, to learn how to align vision with action when it matters most.
Phase 3: Execution and Implementation
All leaders know that results require both strategy and execution. Unfortunately, we overvalue strategy and underestimate the challenges of execution.
Mobilizing Teams With All Hands On Deck
The best strategy means nothing without successful execution. Effective business turnarounds depend on the organizational ability to galvanize employees across all levels toward shared objectives.
High-trust teams are the engine of effective execution. When leaders actively seek to build trust by demonstrating behaviors like accountability, transparency, and respect, they’ll be better positioned to engage their direct reports, align them around important initiatives, and achieve results.
Middle managers and first-level leaders, in particular, are critical to a successful turnaround. They serve as the link between strategy and execution, helping to mobilize teams to improve performance in significant ways. When organizations equip these managers with clear goals, coaching, and support, they’ll empower them to lead their teams confidently through change.
Download our free guide, Crucial Insights for First-Level Leaders, to help your organization’s frontline managers navigate change and align their teams around top priorities.
Reconfiguring Operations
Turnaround demands operational discipline. This may mean rethinking processes, retiring outdated systems, or removing bureaucratic bottlenecks. It can also involve determining the most impactful activities and redistributing resources to prioritize those main focal points.
Download our free 80/20 Activity Analyzer tool to uncover which of your team’s activities matter most for achieving your most critical goals.
Leaders may choose to implement weekly scorecards or visual dashboard-like tools to encourage a culture and cadence of accountability. By creating a compelling scoreboard, leaders can help employees see the impact of acting on lead measures. Regular visibility of lead measures enables faster decision-making and creates a rhythm of accountability.
Even small wins can generate momentum. Celebrate progress, however incremental, and use it to fuel the next phase of execution.
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The Final Phase: Stabilization and Growth
There is no quick fix to chronic problems. To solve these, we must apply natural processes. The only way we can reap the harvest in the fall is to plant in the spring and to water, weed, cultivate, and fertilize during the long summer.
Institutionalizing Success Practices
Once stability returns, the focus must shift toward sustaining and scaling success. This requires embedding high-performance behaviors and systems into the fabric of the organization.
At this point, organizations need to set long-term Wildly Important Goals that encompass financial resilience, customer growth, and employee engagement. Unlike traditional OKRs or KPIs, WIGs bring a laser-like focus to the few things that matter most, ensuring that energy and resources are consistently aligned with high-impact outcomes.
That said, execution practices aren’t enough to sustain a thriving organization. Leaders must work with teams to define the organization’s cultural values and then reinforce them in every decision, from hiring to strategy. When culture and performance move in tandem, high performance becomes sustainable.
Download our free guide, The 4 Pillars of a Thriving Workplace Culture, to learn how to engage your employees and fuel future growth.
Sustained performance doesn’t come from systems alone; it comes from people. A successful business turnaround is only complete when the organization is positioned to grow from the inside out.
Whether during flailing performance or post-turnaround, organizations that recognize their people as their most valuable assets will be better positioned to succeed. Investing in leadership development, coaching, and performance tools ensures your teams are prepared—both for today and tomorrow.
A successful business turnaround is more than financial triage—it’s an opportunity for reinvention. By combining structured turnaround management with courageous leadership and cultural alignment, organizations can emerge stronger, more focused, and ready to thrive.
Whether you’re facing a performance crisis or seeking to preempt decline, discover how to stabilize flailing performance, regain focus, and build the momentum needed for lasting results.
Download our free guide, The Leadership Challenge of Flailing Performance, to discover what it takes to facilitate a successful business turnaround.