Restructuring Against The Odds

How to win in a crisis

Competing with a crisis can seem undefeatable at first, unless all members of an organization are well equipped with the communication tools and the knowledge to combat it. Economic downturn has an impact that spans far beyond the economic sector. A crisis regardless of its level of intensity, holds the potential to afflict turmoil on an operating companies’ reputation and profitability. Causing issues that plague the entire infrastructure of an organization, an effect strong enough to reach across borders and industries. Each sector should anticipate how potential crises will directly affect them, their operations and their customer base.

Experts expect more companies to undergo crisis

The European economies have done very well over the past years. However, there are early signs that this decade of almost continuous growth may be coming to an end. Two-thirds of the participants in our survey believe there will be more companies in crisis mode in the future. In addition, they assume that higher trade barriers and weaker growth in emerging markets may intensify a new economic downturn. On the other hand, crises are not necessarily caused by a general industry decline but instead by changes in technologies or customer needs, which also allow for opportunities if they are addressed with the right business design.

Sustainable success requires the right strategy

The strategic elements of a restructuring concept, such as a strong understanding of the market context, a thorough analysis of the root causes for the crisis, and a compelling target picture for the turnaround, are rated as most important by lenders and financial sponsors. Making such a concept successful, however, requires more than just the standard tools for a short term improvement; instead, it calls for deep expertise and tailored concepts to bring the company back to health.  

Will a potential economic crisis be more severe than the one that shook Europe 10 years ago? What factors could cause a crisis or intensify it? What measures are available for mastering and eventually emerging even stronger from a crisis? What are the elements for making the turnaround sustainable? And do they require a new way of collaboration between management, financiers, and advisers?

These are the questions we address in this year’s Restructuring Report. It is based on an expert survey across Europe, complemented by Oliver Wyman analyses and Points-of-View.


Source: Oliver Wyman Restructuring Survey 2019

Restructuring Against The Odds