Besides being a threat to human health, the corona pandemic has also triggered a serious crisis in the real economy. Across sectors, it is causing declines in revenue and liquidity bottlenecks, while at the same time it is difficult to plan with any certainty. And all of this is happening during a phase of digi­tali­sation, changing market conditions and high cost pressure in which many companies are already in the midst of trans­formation processes, changing their business models and having to make con­siderable invest­ments.

The corona crisis has made conditions more challenging for many companies. It has increased pressure in a situation that is already highly complex. The following factors contribute to this complexity:

1. Multiple simultaneous issues: Digi­tali­sation offers companies an oppor­tunity for a turnaround; it is both the reason and key catalyst for strategic adjust­ments. At the same time, it is also the greatest challenge. Capital is needed to overcome the digital backlog. And that means resorting to radical cost-cutting in certain business areas, while investing and expanding in others. The pivotal task for communi­cations teams is now to convey the good news and the bad news simul­taneous­ly.

2. Accommo­dating individual interests: Restruc­tu­ring programmes no longer con­centrate on a limited number of centres affected by change. In a time of digi­tali­sation and innovation, a more com­prehensive re­adjust­ment must be made to business models that impacts all business fields and units – both natio­nally and inter­natio­nally. However, the rational business approach often clashes with indi­vidual interests. In politics and public relations alone, widely diverging demands on multiple different levels and in various regions need to be taken into account.

3. New business solutions: When con­sidering ways of re­focusing business acti­vities and managing digi­tali­sation, executives are looking beyond the tradi­tional strategic repertoire. Partner­ships and plat­forms, demergers and new joint ventures, disaffi­liations and spin-offs, outsourcing and out-tasking must be explained anew to the stake­holders; the advantages must be spelled out from a variety of view­points. Communi­cating during the restruc­turing process means managing multiple stake­holder groups. Investors, suppliers, customers, mass media, policy­makers, works councils and employees need to be informed and included. In the corona crisis this becomes more challenging, as it is no longer possible to commu­nicate directly and companies are forced to increasingly use digital channels they have little experience with.

4. Added complexity due to corona: Restruc­turing processes are extremely challenging for companies even at the best of times. In these times of corona, the stress level increases even more: declines in demand, stops in deliveries, halts in production and contact restrictions lead very quickly to a collapse in revenue, the extent and speed of which could not have been predicted. The general economic crisis makes it difficult to procure capital in distressed situations. Extensive state aid is important and very wel­come in this situation, but due to the large number of new measures it also increases the complexity of the restruc­turing process as there are new scenarios for the continuing operation of the company. These need to be considered care­fully – also in terms of communications.

5. Additional public pressure: During the corona crisis, the media and society are keeping a parti­cularly close eye on companies’ recovery measures, especially with regard to staff cut-backs. Suspicions (or rumours) quickly spread that a company is using the crisis to take restruc­turing measures that would not be imple­mentable in “normal” circum­stances. In addition, the impression might be created that the seemingly unlimited state aid should be enough to ensure job security. At the same time, the conse­quen­ces of shorter working hours and cut-backs for those affected are especially severe due to the difficult situation. Families with two people in gain­ful employ­ment are often hit doubly hard. This situation and the public opinion that goes hand in hand with it have to be taken into account in the communi­­cations process.

To put it in a nutshell: During the corona crisis, companies going through restruc­turing need to deal with additional complexity even faster and under stronger observation than usual. In this situation, three factors are more essential than ever to ensure that communi­cations contribute towards a success­ful turn­around:

Preparation: The sooner the communi­cations strategy is thought­fully planned and the materials for various situa­tions are ready to go, the better it is for the company concerned. Fundamental decisions and agree­ments have to be made before the situation becomes serious. If this is done, communi­cations in the restruc­turing process can make a decisive contri­bution towards preventing damage to the company and building trust in its success­ful future.

A stable process: Restruc­turing programmes create uncertainty and nervousness. Communications should comply with all legal require­ments and guide­lines on content and should acknowledge the demands of all affected groups. This minimises speculation and knee-jerk reactions, and ensures that communi­cations are active, not reactive. Moreover, this enables senior manage­ment to maintain authority over what is communi­cated and how it is interpreted.

Real perspectives: In restruc­turing programmes, facts, figures and data dominate. Communi­cations that draw a convincing picture of the future make it easier for all involved to accept cut­backs; it also makes the company more attractive to customers and the capital market in the long term.

Our experts can help you going through restruc­turing as a specialised task force, they make complexity of restruc­turing processes manageable and ensure that all relevant stake­holder groups are taken into account.

Our experts for your restructuring programmes:

Olaf Arndt, Susanne Arndt, Volker Heck, Jörg Kohnen-May, Stephanie Verena Prager, Stephan Rammelt