1- The firm’s business model no longer delivers a rate of return acceptable by investors.

2-Sustained drop in the firm’s EBTIDA (Earning before charges of interest payment, taxes, depreciation, amortization).

3- Declining customer satisfaction.

4- Rising costs per sale.

5- Rising administrative ratio.

6- Indirect labor costs.

7- Rising warranty claims.

8- Workforce dissatisfaction.

• These signs always first detected at lower levels as the lower level employees touch them personally .
• When the firm is rigid, centralized, it will take time to reach the top management.
• Some top managers actively campaign against changing if they put their self interest ahead of financial well being of the owners & employees, this requires forceful intervention by the board of directors ( may need to replace the CEO if needed ).