The late Alex d'Arbeloff, founder of Teradyne, an electronics equipment supplier, introduced me to the term the "walking dead." At the time, I was working for a company he had invested in, one that he put into this category. He explained it like this: A "walking dead" company is one that brings in enough revenue to keep going but never enough to take off.
Since then, I've come to understand how companies end up in this awful predicament. In a desire to stay afloat, they chase revenue, any revenue. That means they end up taking on work that isn't particularly strategic. They often under-price it just to close the deal quickly. In a cash crunch, they often hurry, which means they don't listen as well as they should, or invest enough time understanding client needs. That means the work often goes over budget and way over schedule so the cash crunch continues. To get out of it, the company takes on yet more non-strategic work and the cycle continues.
Walking dead companies think that the problem is cash. But actually the real problem is time. They can't afford the time to think, to define, adopt, and stick to a strategy. The cash-time trap means they're always busy but, on a deep level, not productive because they aren't making real progress. Meanwhile, everyone is running as fast as they can; the smart people can see the company isn't getting anywhere.
I've known many companies like this and worked for a few. It isn't fun and escape plans aren't obvious. Cut costs and you can't deliver services or products. Try to take time and cashflow sinks you. Meanwhile it's hard to score triumphs significant enough to land more investment. VCs have seen a lot of walking dead companies and they can spot them a mile away.
The walking dead are a salutary reminder that positioning and strategic focus aren't luxuries but necessities. You have to know what you offer, to whom, and why they value it. Never deviate unless or until you change direction decisively. Don't take on almost-but-not-quite-strategic work. Don't deliver work that is just okay. Don't over-promise and hope your customers won't notice when you under-deliver. Don't, even for a day, start thinking about "getting away with it." Each small step of course brings you closer to twilight.