The persistent need for restructuring – management of complexity

In spite of the current favourable economic conditions, restructuring is still the order of the day – primarily as a result of political and technological developments. Thus current issues are such as the sanctions against Russia, Brexit or increasing regulation affect business activities. Moreover, the mounting pressure of digitalisation is felt across all industries. Growing customer demands and heightened price pressure due to the addition of new competitors are affecting the consumer goods and automotive industries in particular. The focus of restructuring is on adjusting business models while scaling down organisations and processes.

Restructuring programmes are now characterised by steadily increasing complexity. This is determined by the following factors:

1. Concurrence of multiple issues: Digitalisation offers companies an opportunity for a turnaround; it is both the reason and 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 of communication 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 impact all business fields and units. However, this general business rationality 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. This magnifies the number of stakeholders to be factored in.

3. New entrepreneurial solutions: When considering ways of refocusing business activities and managing digitalisation, executives are looking beyond the traditional strategic repertoire. Cooperations 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.

Communication during the restructuring process means the management of multiple stakeholder groups. Investors, suppliers, customers, mass media, policymakers, works councils and employees need to be informed and included. Of particular significance are:

A stable process: Restructuring programmes create uncertainty and nervousness. The communication process should comply with all legal requirements and guidelines on content and should acknowledge the demands of all affected groups. This minimises speculations and knee-jerk reactions, and ensures that the communication process is active, not reactive. Moreover, this enables the senior management to maintain authority over interpretation.

Real perspectives: In restructuring programmes, facts, figures and dates dominate. Communication that puts forward a convincing picture of the future makes 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.

As a specialised taskforce, we make complexity manageable and ensure that all relevant stakeholder groups are taken into account.

Our experts for your restructuring plan:

Olaf Arndt, Susanne Arndt, Dr Dirk Barghop, Alfredo Flores, Volker Heck, Jörg Kohnen-May, Stephan Rammelt

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