When to Seek Help in a Business Crisis: Amber Flags vs Red Flags
Someone asked me a great question on my business turnaround introduction video: "What are the amber and red flags that you'd suggest companies pay attention to, and use as a trigger to speak with you?"
It got me thinking about the pattern I see repeatedly - and why I approach business turnaround differently than most.
Most specialists are brought in when the red flags are screaming. Consecutive quarters of decline, losing a major client, board losing patience, struggling to make payroll. By this point it's emergency stabilisation. You're out of time and options have narrowed dramatically.
Here's what I've learnt from 12 years of living through genuine business crisis:
The real damage happens during the amber flag stage - when things feel manageable in isolation.
I know this from experience. In the first couple of years of running my business, our biggest client - 85% of our revenue - announced they were no longer going to use us. It took weeks, possibly months if I'm being really honest, for me to get my head around what was truly happening and the implications for my business.
Fortunately there was a wind-down process in the relationship with the client that took a year, which gave me a window - once I'd come to terms with it and accepted the reality - to aggressively go after replacement business. But because of my inability to confront the brutal truth quickly enough, I couldn't pay myself anything for several months, in an effort to protect the business as much as possible. It's perfectly possible I would have had to make that sacrifice anyway, but the personal pain went on longer than it probably needed to.
I'll tell the full story in the coming weeks, along with other stories about the crises I've navigated and what I've learnt from them.
This is why business crisis is as much about self-awareness as it is about cash flow.
The amber flags look like this:
You're constantly firefighting rather than building anything
Leadership meetings are dominated by problem-solving rather than executing on long-term strategy
Difficult conversations with key people who are disgruntled about direction
Innovation is no longer a priority
Every decision is about surviving this quarter, not building for next year
I've even seen management teams agree not to discuss certain issues in meetings to avoid worrying external investors. That tells you everything about how honest they're being with themselves.
Leaders convince themselves they just need to get through this rough patch. They tell themselves it for 6-12 months before admitting the trajectory and decision-making hasn't been strong enough. They're not lying to others - they're lying to themselves.
By that point, options are much harder to execute.
Most turnaround specialists focus on financial engineering - cutting costs, restructuring debt. Essential work. But it won't transform your business.
I've developed three capabilities that don't often sit together: financial expertise to handle complex restructuring, crisis leadership from navigating every scenario imaginable, and coaching capability to support the psychological journey that determines whether change actually sticks.
Because the companies that recover strongest aren't just the ones who get the numbers right. They're the ones where leaders had the self-awareness to act on amber, not wait for red - and who had someone who could manage both the financial reality and the human one.
What warning signs have you seen leaders ignore in your own experience?