Almost half of the German participants in a survey carried out by the /amo Network in several European countries told us that “after the pandemic, the success of a business will be measured more by resilience than by pure growth”. This is remarkable because it dispels the traditional view that the management’s agenda must focus solely on numbers and efficiency, particularly in a restructuring scenario.
But how do you define corporate resilience? The term appears in many different discourses – from psychology to economics, and from social sciences to materials management. Resilience is not used in the meaning of strength (i.e. one needs to “endure” something), but to describe the agility and speed required to appropriately react to setbacks. A company is resilient if it can quickly adapt to new conditions and demonstrate “stability through flexibility”.
This is a bold step beyond the context of numbers-driven management agendas which are the basis for most restructuring operations. Restructuring programmes often follow the logic that a joint, time-limited “effort” would bring the company back on track. The language used often reflects this, by naming restructuring projects “fitness programmes” and rallying employees to achieve a common goal with maximum performance.
Immediate crisis management and securing liquidity still have top priority in such an acute crisis. There is also greater recognition of the importance of preparing a company to deal with unforeseeable events. Economic conditions, as the pandemic has shown in such dramatic fashion, are more volatile than ever. Upheavals of various dimensions are unsettling the markets at ever shorter intervals. Companies are permanently under pressure to adapt. Hence, it is increasingly difficult to proclaim a return to stable conditions as the goal of a restructuring process.
Consequently, stakeholders’ communication needs are becoming more complex and require more attention. Three aspects should be considered to increase resilience through thoughtful communications:
- Involve communicators at an early stage:
Communications in companies is still often reduced to informing people about decisions that have already been made. During a restructuring process, this is often too late. Communicators need to be at the table when decisions are made and assess the best options together with the management.
- Communicate uncertainties:
In uncertain times, no one should ever give the impression that they already have all the answers. Instead, the reasons behind a particular course of action and the underlying assumptions should be explained and a readiness to deal with open questions demonstrated.
- Don’t hide:
In uncertain times it would be disastrous to avoid communicating. Lack of communication can lead to employees feeling like they are no longer in touch or aware of what is happening internally, especially in a context of working from home. So don’t hide! Communicating that you are not able to say anything (yet) is always better than remaining silent. Continuous updates promote trust in the actors and in the restructuring plan, thus increasing resilience.
Communication that takes these points into account creates trust – and helps to build a maximum of resilience.
More on this topic in the /amo report “When will the wave break? Corporate insolvencies & restructuring in Europe”.
Photo: H/Advisors Deekeling Arndt