1. Introduction

CEOs and their executive teams appear to be misaligned in their assessment of the severity of the market conditions they face, with CEOs consistently reporting higher levels of market pressure than their C-suite colleagues, according to AlixPartners’ Disruption Index1.

This perception gap creates a governance problem, thereby raising the stakes for leadership teams regarding their approach to their non-core assets, as market pressure has become structural. When those setting the strategy and the teams around them executing it view their environment differently, portfolio decisions could stall or happen for the wrong reasons.

2. The problem with sequential thinking

When a business unit underperforms, companies typically try to address the issue. They bring in a turnaround team, cut headcount, and renegotiate supplier contracts. If the unit struggles after 18 months, they look for a buyer. If no buyers emerge, they talk about closing it. Companies evaluate fix, sell, and close in sequence.

This approach destroys value. By the time a company decides to sell, it is negotiating from a position of weakness. A poorly executed fix program depletes the asset, the buyer pool shrinks, the timeline compresses, and the price drops. The sequential model treats portfolio decisions as a process of elimination, but a better model treats them as a simultaneous evaluation.

3. A framework built for uncertainty

Evaluating portfolio options requires a concurrent decision architecture. Fix, sell, and close must be assessed simultaneously and on equal footing alongside a fourth baseline: do nothing.

That baseline does not exist as a real option; rather, it explicitly highlights the cost of inaction. When leadership teams see the exact financial cost of continued drift, discussions about active options become sharper.

A concurrent structure also prevents motivated reasoning. A leadership team emotionally invested in a business unit they built defaults to fixing it, while a board under pressure from activist investors defaults to selling. Assessing all options at once creates a forcing mechanism that prevents any path from being preselected before the facts are clear.

3.1 Fix: More than a cost story

Management teams under pressure tend to reduce fixing a business to fast, visible actions like headcount reductions, facility consolidations, and discretionary spending cuts. These moves create the appearance of action but rarely solve root causes.

Apparent structural weakness often reflects accumulated complexity or misaligned incentives rather than terminal decline. A business that appears broken often has significant latent value if you examine the full value chain rather than just the cost lines.

A credible approach examines operational performance across the supply chain, sales effectiveness, product complexity, pricing logic, and organizational design. The work moves from rapid mobilization through stabilization to structural prevention. Establishing data transparency quickly, aligning leadership, and building clear governance allows a team to move from assumptions to facts and identify immediate measures within weeks.

A successful fix often leads to a sell decision. When operational improvements make underlying value drivers clear, they frequently reveal that a stabilized asset is no longer a core strategic priority. Fixing the business creates the clarity needed to make a deliberate, fact-based divestment decision.

3.2 Sell: Strategy, not disposal

A well-designed sale frees capital, reduces organizational complexity, and redirects management attention to areas with genuine strategic advantage.

Selling could involve targeted carve-outs, partial sales, joint ventures, or full exits, and the right structure depends on who will be buying. Strategic buyers and financial investors operate with different value-creation logics, so the buyer question must be answered early on. Strategic buyers typically plan for full integration and accept transitional service arrangements. Financial investors need the acquired business to stand on its own from day one. They place a high emphasis on separable systems, ring-fenced financials, and independent management. Clearly, a carve-out designed for one buyer type could undermine value for another.

The fix and sell processes should run well when aligned. Fixing the business defines value levers, while selling validates market appetite through incorporation of value-creation focused initiatives, early soundings and refines the transaction perimeter. Running these concurrently compresses the timeline and broadens the pool of credible buyers.

3.3 Close: A strategic choice, not a strategic failure

Closing a business unit is a legitimate strategic outcome that must be included from the beginning to ensure careful consideration. It becomes relevant when neither fixing nor selling offers a realistic path forward, and continued investment consumes resources without a credible prospect of recovery.

The distinction between a deliberate close and a forced one is enormous in financial, reputational, and operational terms. A well-structured wind-down limits value erosion, protects reputation, and reduces long-term legal and financial risk. A reactive close destroys all three.

Rising insolvency trends across European markets
show what happens when companies fail to prepare, fix, or sell processes with sufficient rigor. These companies do not choose to close; they eventually run out of other options.

4. The decision architecture: How to run the evaluation

Strategic intent without analytical rigor produces confident decisions based on incomplete evidence.

Every option must be assessed against a consistent set of decision dimensions. This includes, among others, financial impacts on the profit and loss statement and cash flow, one-time costs, enterprise value enhancement, implementation time, and reputation risk. It also requires reviewing the workforce implications and aligning with the company’s mid- to long-term strategy.

Quantification is non-negotiable. Trade-offs become explicit only when translated into comparable financial terms and documented for C-level decisions. The lower one-time cost of doing nothing looks different when compared to the long-term drag of keeping a structurally uncompetitive business.

The preferred output is a set of strategically and economically coherent paths that a company can pursue in parallel or sequence. This preserves optionality while enabling decisive action.

5. How to fix-sell-close

Concurrent evaluation requires capabilities that most organizations lack internally. Companies need the bandwidth to run parallel workstreams, the transaction expertise to test market appetite in real time, and the operational depth to stabilize a business while preparing it for divestiture or wind-down.

This work requires integrated transformation expertise that cuts across functional silos, rapid outside-in diagnostics that create fact-based decision transparency within weeks, and the restructuring and M&A expertise to move from evaluation to action. Success depends on having practitioners and tools ready to execute whatever path the evidence demands.

6. Optionality is the asset

The structure of decision-making determines the outcome. Leaders who evaluate options sequentially make decisions under progressively worse conditions at each stage. However, those exploring all scenarios simultaneously will make decisions with more information, better use of their time, and stronger negotiating leverage, in turn making the quality of the process a source of value.

While broader structural market forces remain intense, the best companies are learning to operate more effectively under that pressure, managing capital by evaluating all options concurrently with full quantification and without a pre-selected outcome.

7. Case study: Fix-sell-close in practice

A global telecommunications provider operated multiple in-house customer service sites that were structurally losing relevance. Network modernization, digitalization, and self-service channels had eroded volumes, resulting in underutilization and margin compression. The strategic question was whether each site retained strategic relevance in the portfolio. The company evaluated fix, sell, and close concurrently to ensure a value-optimal decision.

7.1. The approach

In the Fix phase, the team established full performance transparency through a price-per-minute benchmark against external providers. They replaced the internal cost center logic with a profit-and-loss statement. A targeted improvement program unlocked more than EUR 20 million in run-rate savings, increasing the standalone value of every site.

The Sell track ring-fenced two non-core sites and ran a full M&A process, including an information memorandum, a qualified bidder shortlist, a data room, negotiations, and a dedicated project management office. The value created in the fix phase flowed directly into the transaction perimeter.

The Close option was quantified as a standalone ramp-down scenario. It served as the economic benchmark against which every bid had to prove itself on cash, timing, workforce impact, and reputation. That benchmark changed the negotiation. Bidders competed against each other and against a credible internal alternative.

7.2. The result

The company signed a transaction with a strategic outsourcing partner. This secured a sustainable operating model for the divested sites and a transaction value defensible against any internal close-down case. The fix process created the value, the sell process captured it, and the close option maintained compliance.

1 https://www.alixpartners.com/disruption-index/