Implementation-oriented consulting in all crisis phases

The creation of a restructuring concept is often equated with the end of the crisis. After all, the causes of the crisis have been analyzed, restructuring measures have been defined and the financing has been presented. However, a look at practice shows: the actual goal - a sustainable overcoming of the crisis - only starts after a restructuring concept has been presented and is only completed when the company has been realigned and all measures have been operationally implemented. We reveal what companies need to bear in mind.

ERSTELLT AM 24. September 2021

Once the restructuring concept has been drawn up and presented to the banking community, the way forward seems clear: the mission statement, i.e. the future direction of the company, has been described and the necessary restructuring measures defined. Both content blocks are reflected in the figures of the concept and show a restructured company at the end of the reporting period. However, one aspect that is critical to success is either only mentioned in passing in most concepts or very often not addressed at all: How shall the implementation be managed operationally?

In many cases, the elation over the restructuring concept, especially the financing bottlenecks seemingly solved by further bank loans, interim financing or shareholder contributions, obscures the actual “practical challenge“ that follows the “theoretical brainwork“: Many companies simply lack the personnel to implement the measures described for restructuring in the required quality and within the required timeframe. Thus, it is not unusual that the first restructuring concept is followed by the second after one or two years, but with significantly increased pressure to act. The elation over the first concept has meanwhile given way to dissatisfaction and, in some cases, to the bank's intention to terminate its cooperation with the company.

To ensure that this does not happen, companies should pay attention to a number of points - on the one hand in the fundamental development of the concept, but also with regard to the complexity of the issues over time. It is mandatory, that the company considers and checks the feasibility of all the redevelopment measures that have been worked out - starting with savings in material costs and ending with the strategic repositioning of a company in a market environment that may be undergoing major changes. Writing down wishful thinking and an entrepreneurial ideal is just as pointless as the often not even remotely resilient “field hockey stick planning“ of many companies.

Every company should keep an eye on the classic questions in each subject area and critically examine the support for implementation provided by its own resources in order to avoid a situation where it has to develop a second restructuring concept.

Roughly speaking, the operational implementation of the measures can be divided into three phases of action, each of which is critical to the success of the restructuring process, but which place different demands on the support in terms of structuring the content and implementation:

1. transformation of the company
2. implementation of the reorganization measures
3. control of the reorganization process

1. Transformation of the company
Strategic changes, starting with the design of the service and product portfolio, through the adaptation of processes and organizational structures, to the possible acquisition or sale of business units, are the “supreme discipline“ of operational change projects. Structuring and managing these projects is a full-time task. Any approach to deal with these topics alongside day-to-day business or delegate them to the organization is doomed to failure. Instead, the company should bring in consultant support experienced in these topics as a “sparring partner“ for its top management. This is the only way to ensure that the relevant topics - from the strategy to the goals to the derived measures - are developed with the appropriate competence and goal orientation and then do find their way into implementation.

2. Implementation of restructuring measures
Companies seem to find it easier to implement measures to improve earnings. However, the following phenomenon often emerges: “harmless“ measures, for example the reduction of material costs, are usually tackled first and are implemented to some extent as planned. However, such measures, which are accompanied by changes in the organization, are rarely accompanied by euphoria from the organization, but are often torpedoed or simply ignored. This refers not only to measures aimed at reducing personnel costs, but also to those aimed at redesigning work environments, processes or organizational structures.

At this point, it is helpful to make use of a “neutral third party“ who is responsible for project management and implementation of the remediation measures. Even if an employee from within the company may have the appropriate technical and management expertise, he or she runs the risk of being “thwarted“ in implementation. With the support of external consultants, issues can be pursued and implemented in a goal-oriented manner.

3. Control of the restructuring process
Monitoring the implementation of measures is essential not only for internal management purposes, but also for documenting the restructuring process to third parties and as a key prerequisite for the success of the restructuring process. The company must ensure that the requirements of the parties involved in the restructuring process, for example the financing banks, are taken into account in regard to the type and scope of the progress report.

However, a simple presentation of the implementation status of the restructuring measures “in traffic light logic“ is by far not sufficient. In addition to describing the content of the implementation status, it is also essential to compare it quantitatively with the restructuring concept. Professional restructuring controlling and reporting must be used to compare the respective earnings situation and current liquidity with the planning in the concept. This is the only way the company can identify deviations as early as possible and take countermeasures.

Controlling also requires close and open communication with the stakeholders involved, such as the banks. This communication in particular is often not free of areas of tension and should therefore be taken into account as a critical component of the restructuring process.

What can we do for you?
Further to drawing up a restructuring concept, Restrukturierungspartner can support your company in the operational implementation of the restructuring. Here, we attach great importance to adapting our work to your company, the relevant objectives and the parties involved in an “entrepreneurial dialogue“ with you.

We accompany companies in all phases of the entrepreneurial crisis - figuratively speaking from “quarter to twelve“ to “quarter past twelve“:

1. Process analysis and organizational changes in the strategy crisis
2. Realisation of cost savings in the earnings crisis
3. Implementation of refinancing in the liquidity crisis
4. Securing the continuation of operations in an insolvency crisis

In all four phases, we can also take over the operational management function on an interim basis and help you to overcome the crisis.

Restrukturierungspartner has already assisted numerous companies in all phases of the entrepreneurial crisis. Our advantage is the holistic and solution-oriented coverage of the entire restructuring process - starting with the preparation of the restructuring concept through to the full implementation of the measures.

We have compiled the most important information clearly for you: OnePager Implementation-oriented restructuring consulting in all phases of the entrepreneurial crisis (PDF in German only)

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