Restructuring Reframed: A Strategic Tool for Forward-Thinking Leaders

By Jim Martin, Managing Partner

In today’s business environment, volatility is the constant. Interest rates have surged, geopolitical tensions are shaping trade flows, and technology continues to disrupt entire industries. Amid this uncertainty, restructuring still carries a stigma, often seen as synonymous with failure. But this perception is a misconception. Restructuring should be viewed as an essential tool for strategic renewal.

Turnaround strategies don’t just apply to distressed companies—they apply to any business facing an inflection point. The most successful companies are often those that embrace challenges early, with clarity and purpose. The real difference between recovery and reinvention lies in how businesses approach challenges when they first appear.

  1. Shift Your Strategic Paradigm
    Many business leaders wait too long to act. They recognize early warning signs – slowing sales, tightening margins, rising costs – but hope to ride them out. Delaying action costs valuable leverage. By the time leaders seek help, they are reacting to a crisis rather than leading through it.

Business leaders should reframe the situation. They should not view challenges as failure, but as evolution. Structural shifts, whether internal or market-driven, should be seen as signals, not setbacks. Proactively repositioning a business before external pressures force a change offers more options. A company can still raise capital, retain customers, and protect its culture, but it requires initiating change early.

When stepping into a new situation, one must first ask: where is the real pressure point? Is it related to cost structure? Leadership alignment? A fundamental shift in industry dynamics? Customer behavior? Or perhaps new government regulations? Identifying this core challenge is the first step toward building an effective strategy.

  1. Align All Constituents to the Strategy
    A plan on paper means little without alignment across the broader ecosystem. Alignment is not only about securing executive buy-in; it also involves ensuring that every stakeholder, from suppliers and lenders to investors and regulators, is moving in the same direction.

Take, for instance, a manufacturer facing tariff pressures. If the strategy doesn’t account for supplier negotiations or recalibrated pricing structures, it is bound to fail. Asking suppliers to shoulder burdens they didn’t agree to, or springing higher costs on customers and expecting loyalty, is unrealistic. Effective collaboration is key. By sharing the challenge, proposing short-term solutions, and committing to revisit terms once stability returns, a company can maintain stronger relationships across the value chain.

Internally, a lack of alignment within a management team can cause more harm than the external challenges the company faces. A clear strategy is essential, but its success depends on a unified approach to execution.

  1. Build Strategic Supplier Relationships
    Early in my career, one of the most significant strategic shifts I made was reconsidering how I approached suppliers. Like many, I initially viewed negotiations as a zero-sum game—my win was their loss. That mindset proved shortsighted.

When businesses put excessive pressure on suppliers, they risk not just quality and service but the stability of their entire supply chain. External disruptions – whether a pandemic, political shifts, or a supply chain crisis – can leave a company without viable alternatives if those relationships have not been properly nurtured.

Investing in supplier relationships, by contrast, yields substantial benefits. When suppliers view a business as a reliable, transparent partner, they prioritize that business, even when capacity is tight. Strong relationships open doors to better terms and new opportunities. Moreover, helping suppliers grow their businesses—through referrals or joint initiatives—creates a mutually beneficial ecosystem. Strategic supplier relationships are not a soft skil,l but a competitive advantage.

  1. Keep Lenders Close, Especially When Things Tighten
    A common mistake I often see is when businesses, facing cash flow issues or declining performance, stop communicating with their lenders. They hope to turn things around before the bank notices, sending outdated financials or providing overly optimistic projections.

This approach typically ends poorly. Banks do not require perfection, but they do require transparency. If a business is under pressure, the lender should be the first to know. A proactive approach—clearly communicating the situation and presenting a realistic plan—allows the company to maintain the relationship, buy time, and retain some control over the outcome.

When leaders remain silent, the bank starts preparing for worst-case scenarios, often without the company’s input. This creates a situation where options are significantly reduced. In one case I advised, a company failed to be forthcoming with its lender. As a result, the bank called in the loan, forcing the company into a fire-sale transaction. Had the company communicated six months earlier, the situation could have been turned around through debt restructuring, recapitalization, and preserved value.

In these circumstances, control isn’t about having all the answers; it’s about establishing the conditions to find the right answers through transparency and trust.

  1. Use Turnaround as a Path to Opportunity, Not Just Survival
    Restructuring is often viewed as a reactive measure, but its true power lies in proactive action. Many businesses use downturns as opportunities to rethink their entire cost base, renegotiate vendor contracts, revisit pricing models, and optimize their organizational structures.

Rather than just surviving a downturn, businesses can thrive by seizing these moments to reinvent themselves. In one instance, a company facing margin erosion used its challenges to pivot into a higher-margin vertical. Another company consolidated operations and exited underperforming markets, freeing up capital for growth.

In both cases, restructuring was a catalyst that led to long-term success. The result wasn’t just survival; it was acceleration, demonstrating that strategic restructuring can be the key to unlocking significant future value.

Lead the Change Before It Leads You
Every business will encounter turbulence. What sets enduring companies apart from those that fail is how early and decisively leadership intervenes.

Restructuring is not just for companies in dire straits; it’s for those committed to discipline and long-term growth. When handled strategically, restructuring doesn’t signal an end; it marks the beginning of a transformation.

For business leaders facing early signs of stress—or those simply looking to reassess their strategic approach—it is essential to act sooner rather than later. Consulting with professionals who specialize in strategic transitions can help guide your business through challenging times and unlock long-term value.

James F. Martin is the founder and Managing Partner of a firm specializing in guiding businesses through economic transitions, providing strategic financial advice, and helping companies build long-term resilience.

For more information, visit ACM Capital Partners.

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