How to diagnose and fix stalled business growth

Executive overview

Growth stalls are rarely caused by external forces alone. Four internal dynamics — misalignment, loss of focus, loss of nerve, and inconsistency — operate as a self-reinforcing cycle that pulls companies down.

McKee Wallwork & Company discovered these patterns after experiencing a stall themselves, then commissioning research across Inc. 500 companies. The four dynamics showed up in 60% of those firms.

Fixing alignment first cascades into focus and nerve — the other three problems often resolve themselves.

The four destructive internal dynamics

1. Lack of alignment — The most common and insidious. Manifests as eye-rolls, hallway conversations, passive aggression, and meetings where nothing gets decided. Strategy doesn't execute if leadership isn't aligned — regardless of how good the strategy is.
2. Loss of focus — Either from hubris (extending into markets you're not credentialed for) or from a tectonic shock (chasing wrong business, discounting, redefining yourself in desperation).
3. Loss of nerve — Fear shows up in two ways: cutting what doesn't hurt immediately (marketing, R&D, training) and retreating to safety (no sharp elbows, blending in with competitors).
4. Inconsistency — Chasing silver bullets. Short-term tactics that grab attention but accelerate decline (e.g., Pontiac giving away cars on Oprah — a splash, not a strategy).

How the cycle works

• The four dynamics aren't discrete — they reinforce each other.
• A lack of alignment fuels loss of focus → loss of nerve → inconsistency → deeper misalignment.
• Entry point varies: a recession can trigger loss of nerve first; hubris typically triggers loss of focus first.
• Healthy companies have a strong immune system that keeps these factors tamped down. A significant external shock depresses that immune system.
• McKee used weekly Monday morning check-ins on all four factors to navigate the 2009 recession while peers didn't.

Sears as a case study

• Was 1% of US GDP at its peak — effectively Amazon 120 years ago via mail-order catalog.
• Loss of focus began in the 1980s: acquired Coldwell Banker and Dean Witter, launched the Discover Card — corporate hubris at peak success.
• Never properly embraced e-commerce when it arrived.
• Eddie Lampert split the company into 40 divisions with separate P&Ls, boards, and management teams — misalignment at scale.
• Couldn't retain a CEO, which made alignment structurally impossible.
• Discounting followed as loss of nerve; inconsistent partnerships (selling tires through Amazon, then competing with Amazon) sealed the decline.
• The brand retains value, but internal dysfunction has run it nearly to zero.

Resolving misalignment

• Surface the issue explicitly — name the vectors of disagreement without taking sides.
• Go study the market. When data resolves the strategic ambiguity, internal factions tend to coalesce around evidence rather than opinions.
• Some people self-select out once the direction is clear. That's not failure — it's resolution.
• If a CEO is in denial, little can be done from below. The leader must evolve or they will undo any framework imposed around them.
• Two diagnostic questions for an underperforming executive: (1) Would you feel relieved if they quit tomorrow? (2) What if you had 10 people like them?

The role of CEO humility

• The most successful turnaround engagements share one trait: a humble CEO.
• Confidence in what they know, honesty about what they don't.
• Affluence and past success can erode that humility — "I got here, so I must be smart."
• An external shock sometimes provides the humility. But if it arrives too late, the company is too far gone.
• Leaders who serve a mission rather than their own ego can address all four dynamics — because they're willing to look honestly.

Applying the framework at any size

• Works for solo operators, mid-market firms, and Fortune 100 companies.
• A solo contractor can have a lack of alignment — with themselves — if they can't commit to a direction.
• A Fortune 100 company used the framework after a five-year strategic transformation left people adrift with no internal identity.
• Fixing alignment and focus there eliminated the loss of nerve: people got energised and wanted to invest and engage again.
• Consistency then becomes a matter of keeping your eye on it over time.