Why most recovery programmes lose value before they begin, and after they end
Stelios Pigadiotis | Wellman Partners
The company is missing its plan. Cost reduction may steady the numbers, but growth will not return unless the way the business is led and managed changes.
Leadership first, followed by the behaviours, accountabilities, management cadence and technology choices that make the plan executable.
When a company misses its plan, the board's first move is usually to commission a diagnosis. The diagnosis is usually right. The trouble starts afterwards. The report names what is wrong, a cost programme begins, and the numbers stabilize. Eighteen months later the business is lighter but not better run.
Here are three observations on why this happens, and what boards facing underperformance should do differently.
McKinsey's 2021 transformation survey shows how much. Executives at successful transformations estimate they captured only 67% of the achievable financial benefit; everyone else captured an average of 37%. Nearly a quarter of the value lost disappears at the target-setting stage, before the work begins. The other end leaks too: a fifth of the loss occurs after implementation is complete, and embedding the new disciplines into business-as-usual structures is more common among the programmes that hold.
1.1. Set targets against the value creation plan, not last year's budget. A target the current team finds comfortable has usually already given value away.
1.2. Before the programme starts, decide who owns each gain after it ends. A recovery the company cannot run on its own will not last.
The strongest evidence comes from a randomized field experiment. Bloom and colleagues (Quarterly Journal of Economics, 2013) introduced structured management practices into large Indian textile firms — targets, performance tracking, review routines and incentives. Productivity rose by 17% in the first year.
This is why the operating model is the fastest EBITDA lever in a turnaround. Cadence, KPIs and consequences turn intent into behaviour.
2.1. Install a quarterly review in which every critical outcome has a named owner, a number and a consequence. If a missed commitment produces a discussion rather than a decision, the culture has not changed yet.
A new CEO without a performance system falls back on heroics. A performance system without the right leaders becomes a reporting exercise. Neither survives a culture that tolerates missed commitments. And a company that stabilizes without a technology direction recovers into a market that has already moved.
The pressure is building. In AlixPartners' 2026 leadership survey, 27% of private equity firms say their underperforming assets are increasing, and AI has become the sharpest dividing line between executing and genuinely transforming.
3.1. Cut discretionary technology spend that does not serve the plan, but keep making technology decisions. Name the one or two technologies the recovered company will compete on, and who owns them.
The implication. Stabilization is a milestone, not the outcome. A turnaround is finished when the gains survive the people who drove them.
At Wellman Partners, the turnarounds we have delivered have taught us a consistent sequence. It starts with leadership: the right senior people in the roles that carry the plan, assessed rather than assumed, and replaced or supplemented where the evidence says so. Then alignment — tailor-made workshops that bring the team onto one way of working, because a team that has not agreed how it will operate will not hold a plan under pressure. Then the performance system, which is what tells you, quarter by quarter, whether the turnaround plan is actually being implemented or only reported. In one European industrial asset, that sequence produced the financial turnaround inside 18 months and, more lastingly, a results-oriented culture the team still runs the business on.
If your company is behind its plan, I am happy to share our view on where the constraint sits.
Information shared will be handled confidentially and reviewed directly at partner level.
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