January isn’t just another month; for a mid-tier business, it’s a window of opportunity. In my experience advising UK companies in the £1m–£100m range (including plenty of private-equity backed firms), the seeds of a collapse are often sown in the year’s early weeks. Leadership teams charge in with optimism and plans, but under the surface, you often find the real crisis triggers: a drifting leadership, fragile operations, rosy financial assumptions, communication breakdowns, and entrenched silos.
The good news is these are fixable now, before they mushroom into disasters. No theory or platitudes here, just hard-earned steps to stabilise your organisation fast. Start the year by taking these eight actions, and you’ll greatly reduce your risk of a crisis (or be far better prepared to handle one) in the next 12 months.
Align the Leadership Team on Goals and Roles (Stop the Drift)
A business without unified leadership is a ship without a rudder. One subtle warning sign I’ve seen before a collapse is leadership drift, when capable people at the top each pull in different directions. It often starts innocently: conflicting agendas, unclear division of responsibilities, or a CEO assuming everyone is on the same page when they’re not. The result is slow, confused decision-making and “mission creep” that leaves the company aimless. In one turnaround case, we found executives each had different priorities for Q1, sales pushed growth at any cost, finance was quietly panicking about cash, and operations was firefighting yesterday’s issues. Little wonder the firm felt stuck.
Use the first weeks of January to slam the brakes on drift. Get your leadership in a room (literally or figuratively) and hash out the plan for the year. Agree on 3-5 non-negotiable priorities and make sure every director knows who is accountable for what. If there were disagreements or mixed messages lingering from last year, surface them now and resolve them decisively. This is also the time to ensure any new board members or PE investors are aligned with management on realistic goals. Unity at the top is not a “nice to have”, it’s the bedrock of swift, confident action. When a crisis brews, the last thing you need is your leaders second-guessing each other. Set a clear direction and chain of command now so that everyone, from the CEO to department heads are steering the company the same way. Clarity and alignment in January will prevent paralysis when pressure hits in June.
Challenge Your Financial Assumptions (No More Wishful Thinking)
Financial illusions are deadly. I can’t count how many businesses walked into a crisis blinded by their own optimistic forecasts or outdated assumptions. Unchallenged financial assumptions about sales growth, margins, funding, or costs lull leaders into complacency. Maybe your 2025 plan assumed a smooth supply chain, steady interest rates, or a big contract win that hasn’t materialised. By the time reality bites (a market downturn, a sudden cost spike), you’re on the back foot and scrambling to adjust with creditors or investors at your throat. We’ve seen a well-regarded £50m company nearly unravel by autumn because leadership “assumed” a COVID-era sales bump would continue and built costs around it, it didn’t, and the numbers went south fast.
January is the time for a financial reality check. Sit down with your finance team (and ideally an external pair of eyes) and pressure-test everything. Re-forecast your cash flow and revenues using hard-headed scenarios: What if sales drop 20%? What if that investor funding is delayed? What if inflation adds 5% to your costs? Identify the assumptions that, if wrong, could break your business. Then adjust plans accordingly. This might mean trimming a bloated budget, delaying a major spend, or lining up contingency financing before you need it. Yes, this exercise can be uncomfortable; it forces honesty over hope, but it’s far better to confront tough numbers now than to explain a surprise collapse later. For private equity-backed firms, be especially blunt: if the growth targets in the deal thesis look unrealistic, speak up and reset expectations now. Challenging your assumptions isn’t pessimism; it’s prudent leadership. It ensures your strategy for the year is built on rock, not sand.
Shore Up Your Cash Reserves and Liquidity
Cash is the oxygen of your business; if you run out, it doesn’t matter how promising everything else is. One common feature of companies in crisis is a cash crunch that catches leadership off guard. Maybe it’s a piling of unpaid invoices, an unexpected tax bill, or simply overextending in the first quarter. Mid-tier businesses, especially, can spiral quickly once cash gets tight because they lack the huge credit lines of a FTSE 100 firm. We saw this first-hand in a near-insolvency case: by the time we were called, the company was weeks from running out of money, directors were scrambling to negotiate with banks and HMRC, and overnight everything became a fight for survival. It all traced back to not monitoring and protecting cash early in the year when the warning signs began.
Don’t let that be you. Fortify your cash position now. Start with a robust 13-week cash flow forecast that you update continuously; this is your early warning system. If it shows trouble ahead, take action immediately. That could mean securing an overdraft or credit facility before you’re in dire straits, negotiating extended terms with suppliers, or accelerating client billing. Also, stress-test your balance sheet: do you have enough liquidity to withstand a dry patch or a late-paying major customer? If not, build a buffer. This might involve pausing non-essential investments or converting some assets to cash. And remember, profit and cash are very different beasts; a healthy profit on paper means nothing if cash is tied up in inventory or receivables. Pay extra attention if you’re PE-backed and burning cash for growth; make sure your investors are ready to support the plan if forecasts slip. Bottom line: treat cash preservation as a strategic objective for Q1. It’s much easier to pursue growth (or handle a crisis) with a safety net in the bank. Cash gives you options when conditions get bumpy, and options can be the difference between crisis and recovery.
Identify Your Operational Weak Spots (and Shore Them Up)
Every business has a fragility somewhere, a single point of failure that nobody notices until it fails. It could be an overworked operations manager who “always pulls through,” an ageing IT system held together by patches, or a sole supplier providing a critical component. In calm times, these operational fragilities hide in plain sight; under stress, they snap, and suddenly you’re facing a crisis that could have been prevented. I recall a manufacturing firm that nearly had to halt production because their one specialist engineer (the only person who understood a legacy machine) fell ill. It was entirely predictable and avoidable with foresight. Similarly, consider supply chains: we’ve all seen how one disruption can cascade. Even corporate giants struggle (remember how a ransomware attack at a household-name retailer took weeks to stabilise operations and cost them nearly £1bn in lost value). Mid-sized companies have even less room for error when something breaks unexpectedly.
This January, audit your operations ruthlessly. Walk through each department and project, and ask: “What would happen if X failed or didn’t show up?” Look for the brittle points, a key person with no backup, a critical supplier with no alternative, a process dependent on outdated technology or a single customer that you’re overly reliant on. Once you’ve mapped these, take action before they bite you. Cross-train employees so you’re not dependent on one guru. Line up a secondary supplier (or stockpile crucial materials) in case your primary one falters. Invest in that system upgrade or security patch you’ve been putting off; cyber and IT failures can cripple you overnight. If there’s a piece of equipment or a distribution channel that’s make-or-break, get it properly maintained or diversified. And don’t ignore “soft” operations like compliance and legal processes; an overlooked regulatory requirement can hit just as hard as a factory fire. The goal is to build resilience: your business should be able to absorb a hit in one area without the whole machine stalling. By hunting down and fixing these vulnerabilities now, you’re essentially vaccinating your organisation against future operational crises.
Break Down Organisational Silos
When companies fall apart under pressure, silos within the organisation are often a big part of the story. Departments that don’t talk to each other, teams guarding information, leaders solving problems in isolation, it’s a recipe for instability. In a crisis, silos are fatal: I’ve seen boards try to respond to a fast-moving disaster while legal, finance, operations, and PR each push conflicting plans. The result is chaos and delay while the problem snowballs. Even outside of a crisis, silos breed small internal crises every day: the left hand doesn’t know what the right hand is doing, and critical issues slip through the cracks. One client discovered too late that their IT team had been handling a serious data breach solo, never informing the rest of leadership, turning what could have been a manageable issue into a full-blown reputational scandal. Why did that happen? Because the culture was “everyone, mind your own turf.”
Make it clear from day one this year: we operate as one team. Actively break down the walls between departments and functions. This can start with simple steps, set up a weekly cross-functional risk meeting where each leader shares what’s keeping them up at night. Encourage your operations, finance, legal, and communications heads to actually collaborate on contingency plans, rather than each writing their own playbook. If you have a private equity board or external advisors, integrate them into these conversations too; external stakeholders shouldn’t be in a silo of their own. The message to instil across the company is that no department succeeds (or fails) in a vacuum. For any significant initiative or threat, bring all the relevant players to the table early. By doing so, you’ll catch interdependencies and conflicts sooner, whether it’s a new contract that sales is rushing (but legal sees risks) or a cost cut that finance loves (but operations knows will hurt service). In practice, busting silos may mean reorganising project teams or communication flows so that information travels horizontally, not just up and down. It may mean incentivising managers to solve overall business problems, not just their department’s KPIs. The payoff is huge: an organisation that can move in unison when pressure mounts. Remember, when a crisis hits, you can’t afford turf wars or Chinese whispers. Start fostering that “one firm, one fight” mentality now, and you’ll greatly improve your crisis immunity.
Make Open Communication Your Default
One of the fastest ways to breed a crisis is to stay quiet when it matters, or to let honest communication falter. In stressful times, people tend to hold information tightly; executives worry about spooking employees or investors, managers sugarcoat bad news for the boss, and front-line staff hesitate to speak up about problems. This is how small issues turn into big crises in the dark. A classic warning sign I warn leaders about is communication breakdown: important messages don’t get to the right ears, and a culture of silence or confusion takes hold. I’ve lived through a collapse where internal silence was a killer, employees knew something was wrong long before the leaders admitted it, and the lack of clear, truthful communication from the top bred panic and gossip. By the time leadership finally addressed the issues, trust was broken, and half the team had one foot out the door. We had a crisis inside the company before the external crisis even fully hit.
Don’t let miscommunication (or lack of communication) be your undoing. Make transparency and candour the norm from the get-go this year. As a leader, commit to regular, straightforward updates to your team about how the business is really doing, not just cheerleading, but the challenges too. If there’s uncertainty or a bump in the road, own it and communicate your plan to handle it. Employees don’t need perfection, but they do need honesty and to feel “in the know.” This not only prevents rumour mills, it actively builds trust and resilience; when people trust leadership to tell them the truth, they won’t panic at the first sign of trouble.
Internal communication should come first, but external communication can’t be an afterthought. Make sure you have a basic crisis communication plan prepared now, before you need it. That means deciding: Who will speak for the company if something goes wrong? How will we get accurate information out quickly to customers, regulators, or the public? Even a simple draft holding statement (“We’re aware of the issue and are responding actively…”) can save you precious hours in a crisis. The key is to avoid a communication vacuum; if you don’t fill it, someone else (or social media) will, and you won’t like the narrative they create. So set the tone of openness early. Encourage your managers and teams to flag problems upward without fear, and make it clear you’d rather hear bad news early than be surprised later. And conversely, push critical information downward and outward promptly when it’s needed. In a stable business environment, good communication keeps things running smoothly. In a volatile environment, it can literally keep your organisation alive. As one CEO client told me after we navigated a rough period: “We found out people will forgive a lot of things, but only if you communicate. If you go silent, they assume the worst.” Wise words, take them to heart.
Establish a One-Team Crisis Plan (Be Ready to Act Fast)
Hope for the best, plan for the worst. Even if you do everything right, crises can still hit; a sudden lawsuit, a market shock, a key client bankruptcy, you name it. The difference between a company that survives and one that doesn’t often comes down to preparedness and speed of response. A unified crisis plan is your insurance policy. I’ve seen companies without a plan improvise in all the wrong ways: they waste days figuring out who should do what, advisors pull them in ten directions, and decisions get stuck in endless debate just when time is of the essence. In contrast, the businesses that handle crises best are those that have pre-decided how they will respond when something goes wrong. No panic, just execution of a playbook.
So build your crisis response playbook now, when heads are cool. Identify a small crisis leadership team, ideally senior people from each critical domain (finance, legal, operations, HR, comms), who will mobilise immediately if trouble strikes. This echoes the “break down silos” point: your crisis team must function as one cohesive unit, not a committee of silos. Assign clear roles: who assesses the legal implications? Who runs point on operations if, say, your IT systems go down? Who communicates to stakeholders (and coordinates messaging so there’s one version of the truth)? Also decide the chain of command: in a crisis, is it the CEO or Chair calling the shots, or a designated crisis lead? Everyone on that team should know the answer and be ready to step in.
Next, sketch out response checklists for your top 2-3 nightmare scenarios. For example, if your biggest supplier suddenly fails, what’s step 1, 2, 3 in the first 24 hours? If a serious fraud or compliance breach emerges, who needs to be alerted, and what immediate actions will you take to investigate and contain it? This doesn’t need to be a 50-page manual; in fact, shorter is better. The plan should be concise, actionable and known to those who need to execute it. I often advise clients to run a tabletop simulation in January: gather the crisis team and walk through a hypothetical crisis just to see if your plan holds up. It’s a safe way to spot gaps. For instance, you might discover that two executives both assumed they’d lead the response, better to clarify that now than have a power struggle later. Or you might find you have no quick way to reach all employees after hours, so you set up an emergency text alert system or phone tree.
The overarching principle is speed and unity. When a real crisis hits, there’s no time to debate fundamental responsibilities. Having a one-team plan means that when the fire starts, everyone knows their job, critical decisions can be made in minutes, and the left hand and right hand stay coordinated. This integrated approach is exactly what we stand for at Arx Nova because we learned the hard way: a fragmented response is a failed response. Don’t rely on luck. Take a little time this month to ensure that if the worst happens, your team can swing into action like a well-practised unit. It could be the difference between a contained incident and a company-ending fiasco.
Take the Pulse of Your People and Culture
Finally, remember that a business’s stability isn’t just about plans and processes; it’s about its people. In every corporate crisis I’ve observed, there’s a human undercurrent that often decides the outcome. If your employees are engaged, trusting and focused, you can weather almost anything. If they’re demoralised, in the dark, or divided, even a small issue can set off a chain reaction. That’s why I tell leaders: don’t wait for an emergency to find out how your team really feels. Use the start of the year to take an honest pulse of your organisation’s health.
What does that mean in practice? First, get out of the ivory tower. Talk to employees at different levels, not in a perfunctory way, but genuinely ask what’s working and what isn’t. You might be surprised by what you learn. Front-line staff and middle managers often know exactly where the next crisis will come from in the business. It might be a dysfunctional new software rollout that’s frustrating clients, a brewing conflict between departments, or a policy that everyone grumbles about quietly. Create safe channels for people to voice concerns and surface red flags. This could be informal chats, an anonymous survey, or town-hall Q&As, whatever fits your culture, so long as it invites candour. And when you hear about issues or see patterns (e.g. multiple people citing the same pain point or risk), do not ignore them. Those “little” problems can be harbingers of bigger trouble. If staff morale took a hit after last year’s layoffs or a tough quarter, acknowledge it and outline how you’re going to support the team going forward. If there’s anxiety about something (say, a potential acquisition or a new strategy), address it head-on with facts and empathy.
Also, take a hard look at whether your company culture encourages collaboration or inadvertently rewards selfish behaviour. Crises have a way of exposing culture, good and bad. A culture that promotes accountability, teamwork and speaking up will contain a crisis; one that’s rife with blame, fear, or apathy will combust. As a leader, set the tone in January. Reinforce positive values (for example, recognise a team that solved a problem collaboratively) and stamp out toxic dynamics before they fester. One practical step is revisiting incentives and KPIs: make sure they’re not pushing managers to hide problems or hoard resources. Align rewards with overall business success and resilience, not just siloed achievements.
By actively taking the pulse of your people, you accomplish two things. One, you might catch early warning signs of instability, essentially giving you a head start on fixing them before they explode. And two, you build goodwill and trust. Employees who feel heard and valued are far more likely to rally in a crisis rather than cut and run. I’ve had teams go the extra mile to save a company because they believed in leadership and felt part of the mission. That loyalty is earned in the quiet times, through everyday gestures of listening and fairness. So start the year by investing a bit of time in your people. It could pay the highest dividend of all: a unified organisation that stands strong when tested.
You can’t predict every crisis that 2026 will throw at your business. But you can stack the odds in your favour by acting early and decisively on the fundamentals. The eight actions above are not complicated, expensive, or theoretical; they’re straight from the trenches of crisis management and business turnarounds. Taken together, they fortify the very areas where companies are most vulnerable: leadership, finances, operations, communication, and culture. By tackling these in January, you’re effectively building your “new fortress”, a business that’s clear-eyed, resilient and agile. Whether this year brings smooth sailing, a few storms, or a full-force crisis, you’ll be ready. And being ready means you won’t just survive challenges, you’ll have the clarity and control to capitalise on opportunities as well.
After all, businesses rarely fail for lack of market potential or talent; they fail because they run out of clarity, alignment, and time. So give your organisation the clarity, alignment and time it needs now. Your future self and your stakeholders will thank you when it matters most.
Who’s behind this post?
Simon Larkin
Director & Co-Founder
Simon Larkin is a Fellow of the Chartered Institute of Marketing and a Chartered Marketer. As Co-Founder of Arx Nova, he brings over 20 years of experience in crisis communications and marketing. Simon works with leadership teams to manage reputational risk, control the narrative, and restore stakeholder confidence during periods of uncertainty.
