When Improvement Isn't Enough

Most underperforming companies start in the same place:

We just need to execute better.

Cost programs are launched. KPIs are tightened. Consultants arrive with operating models and slide decks. And for a while, things look controlled.

Then the results stall. At some point, performance improvement stops being a solution and becomes a delay.

Here are five signals that tell you it’s time to stop optimizing and start restructuring.

1. The Math Doesn’t Work

If your cost base was built for CHF 100m of revenue and the business now generates CHF 60m, no efficiency initiative will close that gap. You can cut travel. Freeze hiring. Renegotiate suppliers. It won’t matter. This is not an execution problem. It’s a structural one. The only answer is structural cost reduction, headcount, footprint, complexity.

2. The Market Has Moved

When the core product is disrupted, customer preferences have shifted, or the market itself is shrinking, execution excellence becomes irrelevant. You can run the business perfectly and still fail. Performance improvement assumes the model is sound. Restructuring accepts that it may not be.

3. Subscale Everywhere

Multiple products. Multiple regions. Multiple business units. None with critical mass.

Overhead duplicated across the organization. Complexity without returns.

At this point, “focus” workshops are cosmetic. The real choices are harder: exit, consolidate, or divest. Restructuring is about deciding what not to be.

4. Unit Economics Are Broken

Weak revenue per head. Structurally thin margins. An LTV/CAC ratio that never worked and never will. If the unit economics are upside down, scale makes things worse, not better.

This isn’t about improving performance inside the model. It's about redesigning the model itself.

5. The Clock Is Ticking

When runway is measured in months, covenants are under pressure, and liquidity is tightening, gradual improvement becomes a luxury. There is no time for pilots. No time for phased programs. Speed matters more than elegance. Restructuring is not optional, it’s urgent.

The Real Shift

• Performance improvement asks: How do we run this business better?

• Restructuring asks: What business should we actually be running?

The mistake leaders make is waiting too long to switch the question.

By the time performance initiatives fail visibly, value has already been destroyed.

The companies that preserve value are the ones that move early, before optimization turns into denial.