When everything stalls but every part is working

Almost every time I’m called in, it’s for the numbers.

The cash is tight, a key figure is heading the wrong way, the bank is asking questions, and someone has decided the business needs fresh eyes that can read what’s really the problem.

That’s the door I come in, and it’s usually the only door owners and leaders know because the numbers are where the issues show up.

But the numbers are almost never where the work ends.

I have written before, in “When the problem is called cashflow“, that a cash shortage is a signal rather than a problem. It is telling you that something upstream is out of balance.

What does that upstream work actually look like when you follow it all the way?

A manufacturer that did not have a cashflow problem

The business made a specialised product protected by its own manufacturing patents. That product was the engine of the whole operation, profitable and well established, the thing that paid the wages and kept the lights on.

The owner was an entrepreneur in the truest sense. Restless, inventive, always half a step into the next idea. Alongside the established business he was building a second and far more ambitious venture, one that needed capital, needed development, and needed time before it would pay anything back. Part of it was funded by grants he chased hard. Most of it, though, was funded by something less visible.

Every month the cash was tight. The established business was plainly profitable, so the tightness made no sense on the face of it. That was why I was called. Read the numbers, find the leak.

The leak was not hard to find. Following it was the interesting part.

Money was leaving the business through purchase orders the owner was placing himself, for the second venture, without telling the accounts team, or his co-owner, or anyone running the day to day. Capital items. Development costs. Ideas he had committed to on his own and set in motion. The rest of the business would learn about them when the invoice arrived and then have to find a way to pay it, usually out of the cash the established business had generated to run itself.

So, the profitable business was quietly funding the experimental one, one unannounced decision at a time.

That is the growth-funded-from-working-capital pattern I described in the cashflow piece, but with a particular edge. Here the growth was not just outrunning the capital. It was being decided in one place and paid for from another, with nothing in between to catch it.

What the numbers were actually pointing at

This is the part that matters, most.

The finance problem and the leadership problem were the same problem, seen from very different perspectives.

The cash was short because decisions were being made off to the side and funded from the centre. Which meant you could not fix the cash without changing how those decisions got made. And changing how decisions got made was not a finance task. It was a leadership task. The trail of numbers led straight out of the ledger and into the way the business ran itself.

Underneath both sat a question of strategy that no one had put into words. How much of the proven business should go into building the unproven one, and on what terms. It had never been asked out loud, so it was being answered by accident, one purchase order at a time, the cash cow quietly underwriting a bet nobody had sized.

That is what made it one problem and not three. You could not set the strategy without the real numbers, because the numbers were the only honest read on what the venture was costing. You could not hold the strategy without the people, because it lived or died on how decisions got made across the business. And you could not fix the finance on its own, because the leak was not an accounting error. It was a strategic choice being made in the dark. Move any one of the three and the other two moved with it.

The team was not the issue. That is worth saying clearly, because the easy read here is that the business had the wrong people, and it did not. It had good people, each capably running their corner. Someone on sales. Someone on marketing who also carried the grant applications. Someone on manufacturing, someone on logistics, someone keeping the books. The co-owner held admin and people and spent a great deal of energy keeping the peace while the pressure built.

Everyone had a corner and everyone was holding theirs.

What the business did not have was anyone holding the whole. No one sat above the corners with both the standing and the range to see across all of them at once, to connect a decision made on the second venture to its effect on the cash of the first, to the pressure that then landed on sales, to the tension it created between two owners. That capability was missing. Not from a seat that was empty. From the business entirely.

The immediate fix, and then the long term one

First, we stopped the bleeding.

A quick refinance on some equipment and a modest capital injection took the acute pressure off, the same way you splint a break before the healing can start. That bought room. It fixed nothing on its own.

Then the real work.

I put a weekly accountability rhythm across the operation. Everyone in the same room, on the same cadence, seeing the same picture. The owner agreed to something he had never done before, which was to forecast his capital spending rather than commit to it in private and reveal it later.

And I brought a decision framework to the table, and facilitated the team, and especially the owner, in choosing the criteria that options would be judged against. Those agreed criteria were the test every idea had to pass before money was committed to it. What is the return. When does the cash come back. How does it sit against the other things we could do with the same money and time. Not a way of saying no to the owner. A way of making his own thinking visible to him before he acted on it.

Roughly nine out of ten of his ideas did not survive that test.

I want to be careful about how that reads, because it is not a criticism of the man. The ideas were the engine. His restlessness was why the business existed at all. But an idea that is brilliant and an idea that is grounded in the cash reality of the business are two different things, and he had never had anyone alongside him who could tell them apart with him, in a way he trusted, before the money was gone. The framework did not dull the entrepreneur. It gave the entrepreneur a floor to stand on.

I also sat in the middle of the two owners. Not as a referee exactly, more as the person the pressure could run through instead of running between them. A great deal of the tension in that business was really just the absence of anyone holding the whole, and once someone was, the tension eased on its own.

We fixed the marketing at the same time, because the established business was leaving money on the table while the marketing person was spread thin writing grant applications. Its advertising led on price and drew price-shoppers, and the real story was in the features only it could offer. I have told that half of it in “The one thing that sets the pace“, so I will not retell it here, except to say the reframe lifted sales and profit in the established business, which lifted its cash, which meant the second venture could finally be funded properly instead of by stealth.

None of that was five separate fixes. It was one answer to a single question. How the proven business could carry the new one without being drained by it, worked through the finance, the decisions and the people at once.

Everything started to settle. The business made real money. And for the first time the owner was free to go and build the thing he had actually wanted to build.

Why they kept me, and what that says

When the business was stable and the owners were ready to step back from the day to day and pursue the second venture in earnest, they did not thank me and close the engagement.

They asked me to run the business.

I stepped in on a regular cadence as their acting chief executive, holding the operation together in their absence, keeping the accountability alive, being the eyes and the ears while they were away.

That is close to the highest thing a business can say to an outside advisor, and it happens to me more than you might expect. They ask me to come inside, to take the chair, because I’ve shown them I can see the whole picture and they would rather that capability stay than leave.

I do not usually take the chair.

The value is in being the one who holds the whole from a position slightly outside it, not in becoming one more person inside it pulling in one direction.

The story is really telling

The business did not have a cashflow problem. It had a holding problem.

Capable people in the right places, and no one with the range to hold them together, and the cash shortage was simply the most visible symptom of that gap.

This is the pattern at the heart of the thinking series article, “The real problem isn’t where you’re looking“. The problem an owner first describes is rarely the real one, and here the real one sat a full layer beneath the numbers I was called in to review.

The fix was not a report, or just a refinance, or even a better decision framework. The fix was someone holding the whole.

Which is why almost every client I work with stays, in one form or another.

Some weekly, some monthly, some intense at first and then settling into a quieter rhythm.

Not because the first problem was never solved. Because once an owner has felt what it is like to have someone holding the whole with them, they understand it was the thing they had been missing all along, and they are not keen to go back to running without it.

The capability these businesses need most is the one they can almost never build quickly in-house and cannot simply hire, because it is not a role. It is a way of seeing across strategy, finance, and the people at the centre all at once, and then holding them together while everyone else holds their corner.

That is the work I do.

It usually starts with a number. It rarely ever ends there.

When all the parts work but everything still stalls.