A transformation is a long-term and fundamental shift of an entire organisation regarding its business-model, culture, structure, processes, and systems. Transformations require significant investments of time, resources, and effort.
A turnaround, on the other hand, is a more tactical and reactive effort to stabilise a company that is in a crisis or underperforming. Turnarounds typically involve cost-cutting measures, divestitures, and restructuring of the company’s operations and debt. The goal of a turnaround is to quickly restore profitability, cash flow, and stakeholder confidence, often through a combination of short-term fixes and longer-term strategic actions.
Both transformations and turnarounds need to be managed professionally to succeed (change management).