3 Big Takeaways from Steve Swayne
I. Every business has three fault-lines
Financial ratios matter. Free cash flow, debt structure, covenants, customer concentration – they tell you if the business is viable.
They don’t explain how it drifted into trouble. For that, you look at:
Process (governance). Is the board seeing the right information? Is it complete, timely and unvarnished – or filtered and rehearsed before it reaches the table? In many distressed organisations, the board are working off a sanitised version of reality.
Risk. Are the big, high‑impact, high‑likelihood risks actively discussed, or just parked on a register? Supply chain fragility, legal exposure, regulatory relationships, these are the issues that bring down companies that still “look fine” on paper.
People. Does the board behave like a board? Does the executive team communicate honestly up and down the organisation? Is there a credible succession plan if the CEO fails? Most importantly: is what leaders believe is happening actually what is happening on the ground?
That last question is where most of the damage hides.
II. Speed is a strategy
Most distressed organisations move too slowly for the reality they’re in – not because people are weak, but because the drumbeat was built for normal times.
In a turnaround, that rhythm has to change:
Monthly reviews become weekly – sometimes daily.
Meetings get shorter and sharper, not longer and vaguer.
The agenda shrinks to the two or three levers that really determine survival.
Very quickly, the organisation should start to look and feel different: fewer meetings, a small set of critical KPIs everyone understands, and direct, unambiguous communication with staff, lenders and regulators.
The businesses that recover accept this change of pace early.
Those that don’t usually discover that, by the time they’re ready to move quickly, the runway has already gone.
Every week of delay is a week closer to the cliff edge.
III. Somewhere in your business, someone knows the truth you don’t
In almost every distressed organisation, there’s a gap between the story in the boardroom and the reality in the business.
Sometimes that gap is weak governance.
Sometimes it’s deliberate concealment.
Often it’s people telling senior leaders what they think they want to hear.
You don’t close that gap with another model. You close it by going outside the usual circle:
Talk to major customers.
Talk to the people who touch those customers every day.
Talk to the receptionist who sees which suppliers are chasing payment and who looks worried in the lobby.
This is why external operators add so much value. They have no stake in the existing narrative, can ask questions insiders have stopped asking and listen to answers insiders have stopped hearing.
When the “golden thread” between chair and frontline is broken, the board is essentially managing a fiction.
2 Key Insights
I. Debt structure matters more than headline debt
Most boards obsess about the total debt number. The real question is how that debt is built.
Short‑term facilities that can be called quickly, covenants that trip at exactly the wrong moment, and lenders who are kept in the dark, these are the combinations that turn a manageable problem into a crisis.
That’s why the relationship with the bank has to be built in the good years. A lender who trusts management and has been kept informed behaves very differently when things get tight than one who only hears bad news at the point of breach.
II. The next couple of years will expose weak structures
Interest rates are not going back to zero. Exit markets are patchy. Costs are rising. Confidence is fragile.
For many mid‑market and PE‑backed businesses, that means more time under ownership, more pressure on cash, and less room for error.
The practical response isn’t glamorous:
Know your working capital cycle in detail.
Be honest about which customers and products are truly profitable.
Make sure your debt structure gives you a real runway, not just theoretical headroom.
Communicate early and clearly with lenders, regulators, customers and staff.
It’s basic blocking and tackling but it’s also the difference between a company that comes out of a tough period stronger and one that doesn’t come out at all.
1 Thing to Watch This Week
Odd Behaviour
There’s a story about a board that spent half its meeting discussing the Christmas party while the business was weeks from insolvency.
It sounds extreme but displacement activity is common in stressed organisations.
What is your organisation spending time on that is not one of the two or three things that genuinely decide survival right now?
If you are facing a turnaround or value‑creation challenge and would like to talk, get in touch.
Oliver Colling
Kingsgate – kingsgate.uk.com
We have a 75% success rate for a reason.
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