A turnaround is not a narrative. It is a sequence of decisions executed against a cash clock. In the German and Iberian mid-market, the difference between companies that recover and companies that enter a second restructuring cycle is rarely strategic insight. It is almost always craft: the discipline to move working capital before the covenant conversation, to renegotiate the three contracts that matter rather than the thirty that feel urgent, to consolidate sites before the next wage round, to migrate IT before the ERP decision becomes a board crisis. Tactical Management takes companies in exactly these phases. We do not write concept papers. We run the business. This essay sets out what a real operative Wende looks like, why the first 100 days and the first 18 months serve different purposes, and why Permanent Capital materially changes the quality of the work. Dr. Raphael Nagel (LL.M.) founded this house around a simple premise: restructuring is engineering, not rhetoric.

The First 100 Days: Cash, Not Vision

The opening phase of a turnaround is a liquidity exercise. Nothing else ranks above it. Before any strategic repositioning can be considered, the operator secures the cash runway. That means a rolling 13-week liquidity forecast built from invoice-level data, not controlling averages. It means identifying the three customers who determine 40 percent of receivables and the four suppliers who determine the same share of payables. It means walking the factory and the warehouse, not reading the inventory report.

In the first 100 days, Tactical Management does not launch transformation programs. We stabilize. Payment runs are centralized. Unauthorized spend is frozen. Overtime is reviewed line by line. Dormant SKUs are identified and prepared for runout. Customer concentration risk is mapped against contract termination clauses. These are unglamorous tasks. They are also the tasks that determine whether the company still exists in month twelve.

Governance is the second workstream. A functioning Beirat is installed or reactivated. Reporting cycles shorten from monthly to weekly. Management and shareholders receive the same numbers at the same time. Where §613a BGB applies in an Asset-Deal scenario, employee communication is sequenced against legal reality, not against sentiment. Advisors typically produce a plan at day 90. Operators produce a stabilized cash position, a functioning management cadence, and a list of the decisions that can no longer be postponed. The distinction is not semantic. It is the difference between a document and a running company.

Working Capital Before Strategy

Mid-market companies in Sondersituationen almost always carry 60 to 120 days of trapped working capital that can be released without touching the commercial model. Receivables are aged because nobody has been empowered to pursue them. Inventory is inflated because procurement is rewarded for price, not for turn. Payables have been stretched until supplier relationships have become adversarial, which in turn raises input cost.

The operator attacks this in a defined order. Receivables first, because the lever is internal. Credit limits are reset. Dunning becomes a managed process rather than an accounting afterthought. Inventory second, because it requires cross-functional alignment between sales, planning and procurement. A 15 percent reduction in finished-goods inventory, executed over two quarters, is an ordinary outcome in a mid-market operation that has not previously run a disciplined S&OP cycle. Payables third, because rebuilding supplier trust is slower than damaging it.

Procurement is the adjacent lever. In most mid-market industrials, 70 to 80 percent of external spend sits with suppliers who have never been tendered competitively in the current decade. The work is not aggressive sourcing theatre. It is category-by-category renegotiation, indexed to verifiable volume commitments, with contractual terms that survive a downturn. This is operator work. It does not generate slides. It generates margin. Tactical Management runs these programs from inside the company, with the CFO and the head of procurement, not as an external workstream.

Contracts, Sites, Portfolio: The Structural Decisions

Beyond working capital sit the harder decisions. Long-term contracts that no longer reflect input-cost reality. Sites that made sense in a prior product generation. Portfolio complexity that has accumulated through two decades of customer accommodation. These are the decisions owners and incumbent management typically defer, because each one carries organizational friction.

Contract renegotiation begins with the supply side, because the counterparty usually has an economic interest in the company’s continued existence. It extends, selectively, to the customer side, where loss-making accounts are either repriced or exited. The operator does not exit customers on spreadsheets. The operator exits customers in sequenced conversations, protecting the order book during the transition.

Site consolidation is a multi-quarter exercise. Works council engagement is not a formality. It is the mechanism through which consolidation becomes executable. The legal framework, including §613a BGB where applicable, is respected as a design constraint, not resented as an obstacle. A site decision announced in month six is typically effective in month eighteen. Portfolio focus is the third structural lever. A mid-market industrial carrying 4,000 active SKUs often generates 90 percent of contribution from fewer than 800. The long tail is not harmless. It consumes planning capacity, inventory capital and sales attention. Rationalizing it is unpopular internally and essential externally. Tactical Management runs this decision with the commercial leadership, not around it.

IT Migration: The Restructuring Nobody Announces

Every mid-market turnaround eventually confronts the IT estate. Legacy ERP systems, uncontrolled Excel layers, shadow databases built around retired employees. The company cannot steer what it cannot measure, and in many Mittelstand situations the reporting backbone has quietly decayed over a decade of deferred investment.

IT migration inside a turnaround is not a greenfield digitalization program. It is a triage. Which data structures are reliable enough to steer on. Which interfaces must be stabilized before any commercial decision can be trusted. Which modules can be deferred until after the operative stabilization. The operator’s task is to prevent the IT conversation from absorbing the turnaround. System selection is not a year-long beauty contest. It is a constrained decision taken against the operational roadmap.

This is where advisor-led restructurings frequently stall. A consultancy can model a target architecture. It cannot decide, on a Tuesday, that the planned SAP module is deferred by two quarters because the cash forecast does not support parallel workstreams. That decision requires accountability for the P&L, not for the deliverable. Tactical Management takes that accountability. We sit in the steering committee as shareholder and operator. We approve the sequencing. We own the consequence. The test of an IT workstream inside a turnaround is simple: does management receive cleaner numbers at month twelve than at month one. If the answer is yes, the migration is working. If the answer is no, the program has become its own problem.

The 18-Month Horizon and the Incentive Problem

The first 100 days stabilize. The next 18 months rebuild. This phase is where most fund-structure restructurings compromise, because the exit clock begins to dictate decisions. A classic PE sponsor operating on a five-year hold, three years into ownership, cannot afford the two-year site consolidation that would genuinely reset the cost base. The decision gets trimmed to what is presentable in an exit process. The structural problem is deferred to the next owner.

Permanent Capital removes this constraint. Tactical Management is a private Beteiligungsgesellschaft without fund structure, without LP quarterly reporting, without a defined exit horizon. We do not sell in five years. We run the company. That changes what can be decided in month fourteen. A payback period of 30 months on a procurement automation investment is acceptable. A works council agreement that takes four quarters to negotiate but delivers a durable cost structure is acceptable. Product portfolio surgery that depresses revenue for two quarters before contribution margin recovers is acceptable.

This is not a philosophical preference. It is an alignment of incentive with craft. Dr. Raphael Nagel (LL.M.) built Tactical Management around this alignment. The operators who have done restructurings, as opposed to those who have observed them, understand that the real work sits in months nine through twenty-four. A capital structure that forces divestment at month thirty-six is structurally incompatible with that work. Wir entscheiden. We decide, and we stay to live with the decision.

Turnaround is not rhetoric. It is a craft composed of small, sequenced, unglamorous decisions, executed under cash pressure by people who are accountable for the outcome. Working capital discipline, contract renegotiation, site consolidation, portfolio focus and IT migration are not strategic themes. They are the line items of a functioning operative Wende. Tactical Management operates in this register because it is the only register in which restructuring actually works. We do not advise from distance. We take the company, we run it, and we stay. For owners in the DACH-Mittelstand and in Iberia facing Nachfolge, Carve-Out or Neuausrichtung: the conversation begins at tacticalmanagement.ch.