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If somehow there is always a crisis, how do you deal with it? What skills do managers need to avert the crisis and how do they succeed in aligning an organisation as a perpetual motion machine? We talked about this with Prof. Dr. Henning Werner, Professor for Transformation, Restructuring and Turnaround at the SRH University of Applied Sciences Heidelberg.

Dr Werner, other people shy away from the crisis, yet you have made it your life's work. What fascinates you so much about it?

In the life cycle of a company, the crisis is the most exciting phase for me. Everyone involved is under a lot of pressure, but at the same time you can achieve an incredible amount because things have to change. It is also important for quickly identify the key levers. Getting everyone involved on board also requires a lot of psychological skill. And last but not least, you have to work together in an interdisciplinary way during a crisis, for example in the fields of business administration and law. That is also exciting for me.

How did you come to the topic of restructuring?

I did my doctorate on the topic of financing and then initially worked in the start-up environment. As is well known, start-ups and crises are very closely related. I later moved to a medium-sized automotive supplier and worked there in operational restructuring. Since 2005, I have held a professorship at the Faculty of Business Administration at the SRH University of Applied Sciences in Heidelberg and have been working on the topics of transformation, restructuring and turnaround, specifically in this environment.

How have the crises changed in recent years, and what impact does this have on the restructuring process?

The topic of the business model has moved more into focus. When I started in Heidelberg, restructuring was still very financially oriented. Then they started to focus more on performance-related issues because they saw it was not sustainable to restructure purely from a financial perspective. Because we are now seeing such fundamental structural changes in so many sectors, it has become important to also deal intensively with the strategic orientation of the company and the  business model.

At the same time, megatrends, such as digitalisation and sustainability, must be dealt with and integrated into the corporate strategy. This also has consequences for the preparation of restructuring concepts: the new IDW 6 standard, which will soon be adopted, states that companies must, for example, comment on ESG criteria and the topic of digitalisation and reflect these in their mission statement if the business model makes this necessary. In restructuring law, additional instruments have been created with the STARUG. Overall, restructuring is becoming more holistic, but also more complex.

What does this mean for the profile of those involved, especially on the counselling side?

In any case, it's not getting any easier. I think that if you want to advise your clients holistically, you have to constantly educate yourself. At the same time, restructuring is a process based on the division of labour. So you must not only have great expertise, but also a good network, because no one can master all topics in depth alone.

What skills does a leader need to successfully navigate a company through rough seas in such a challenging time?

If you look at the past years, one crisis follows the other. In addition, as previously mentioned, there is structural change in many markets. Change is therefore becoming more and more intensive, as numerous empirical studies also demonstrate. Change competence is thus becoming a key competence that managers need in order to adapt their organisation. Furthermore, you need people at the management level in a company who are able to systematically deal with the topics of strategy and business model - simply put because it will no longer be the case that things will run the same way for the next 30 years as they have for the last 30. Moreover, a high degree of change management competence is required so that you develop a corporate culture that takes the employees along during this change process. This aspect is also very important against a backdrop of the shortage of skilled workers. If you want to find and retain employees, you need to communicate a clear vision and provide orientation. By the way, all this applies not only to the managers in the companies, but also to the consultants.

Where do you get these skills?

In the area of key competencies, we at the IfUS Institute are on the move with various training formats. Last year we developed the "Transformation and Turnaround Manager" certificate course in addition to classics such as our "Restructuring and Reorganisation Consultant" course, and we have already completed three courses with practitioners. It is all about the following: how do I systematically set up a transformation project? The course focuses on strategic realignment, adaption of the business model, cultural change and aligning the organisational structure and processes to increase adaptability. In these areas, we teach tried and tested tools that participants can use in their companies. Above all, we all benefit greatly from the interaction with each other. In our last course, we had managing directors and executives who had over 300 years of top management experience between them. Exchanging ideas in this circle presents a great added value in itself.

How do you see the further development in the restructuring market?

I expect that we will see a much higher level of activity in restructuring and reorganisation over the next few years. During the Corona period, we all expected the restructuring tsunami, which did not come, mainly because the market was flooded with liquidity. Now the KfW loans have to be slowly repaid, and the grace periods are running out. I don't want to herald the next wave of insolvencies, but I think that providers with proven expertise in restructuring will be well utilised in the next few years. That's what I always tell my students when it comes to choosing their major.

Thank you very much for your assessments, Prof. Werner.

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