Investors are cashing in on Rolls-Royce’s turnaround story. The British engine makers’ profits more than doubled last year, with Tufan Erginbilgi? taking the helm in January 2023. Dividend payments are set to resume, and its share price is up over 60 per cent this year alone. The former BP executive, who shook up the company’s top teams, reduced duplication and culled middle managers must be pleased with himself. But he also knows how fragile the gains can be. He said Rolls-Royce’s midterm targets are a “milestone, not a destination”.

Restoring the feelgood factor, for managers, staff and shareholders, plays a vital part in the revival of any struggling enterprise. Some of the best known names in business have undergone their own revamps — from Apple to Ford to Xerox. Citigroup under Jane Fraser is another example of a turnaround under way. Purging the leadership, shrinking the headcount or rolling out some new technology alone is not enough to transform a faltering company. So what should a business do?

Having a clear grip of the level of distress is essential if a leader is to understand what type of turnaround their company needs. Is it a rescue, like BP, which was on the brink of collapse after the Deepwater Horizon disaster? Or a strategic shift, as at Netflix, which moved from rental DVDs to streaming? And which underlying strengths can a leader still exploit?