Restructuring management is a process dedicated to corporate renewal, which uses analysis and planning to save companies in trouble and return them to solvency. It involves management review, analysis of the root causes of bankruptcies, and SWOT analysis to determine why the company fails. Once the analysis is complete, a long-term strategic plan and a restructuring plan are created. These plans may or may not involve a bankruptcy filing.
Once approved, restructuring professionals begin implementing the plan, continuously reviewing its progress, and making the necessary changes to the plan to ensure that the company is solvent again. Replacement is a strategy in which senior managers or the chief executive officer (CEO) are replaced by new ones. Renewal managers are also called renovation professionals and are often interim managers who only stay as long as necessary to bring about the change. With a renewal, a company undertakes long-term actions, which are supposed to lead to successful management performance. The role of a manager in a turnaround process is essential for the success of the company. The restructuring manager will measure performance regularly and review milestones with key stakeholders, including creditors.
Progress during this phase will be closely monitored and the plan will be adjusted as necessary. More and more managers are becoming a one-stop shop that helps companies obtain funding (in close collaboration with banks and the venture capital community) and professional services firms (such as lawyers and insolvency professionals) so that they have access to the full range of services that are normally needed in a restructuring process. However, this does not mean that they are capable or even qualified enough to carry out a recovery. In this case, the selection must be done quickly, as it may not be possible to make a second recovery after new or existing poor performance. This restructuring strategy is used because it is theorized that new managers bring recovery and strategic change, as a result of their experiences and backgrounds different from those of their previous work. Therefore, restructuring management is closely related to change management, transformation management, and post-merger integration management.
It is a necessary determinant of organizational success and must be a fundamental element of a valid recovery model. If a public organization is in a situation of change, it is subject to the dimensions of performance; however, it can help in any situation where it is necessary to implement a direction, strategy or general change in the way of working. As an expert in restructuring management, I can tell you that having an experienced manager on board during this process can make all the difference between success and failure. A manager should have an understanding of the company's financials, be able to identify potential problems before they arise, and have strong communication skills to ensure that all stakeholders are kept informed throughout the process. They should also have experience in developing strategies for long-term success and be able to work with other professionals such as lawyers and insolvency professionals. In addition to these skills, it's important for managers to have an understanding of how different strategies can be used in different situations.
For example, if bankruptcy is an option for the company, then they should understand how this process works and how it can affect other stakeholders such as creditors. They should also be able to develop strategies for dealing with creditors if bankruptcy is not an option. Finally, managers should have experience in developing plans for long-term success after the turnaround process has been completed. This includes developing strategies for growth and sustainability as well as creating plans for how the company will continue to operate after it has been restructured.
