Category: Crisis, Turnaround & Restructuring

Crises very rarely come unexpectedly. In most cases, a crisis is a gradual process that persists over a number of years, gradually intensifying until the symptoms of the crisis become openly apparent.

Transparency is one of the key factors in successfully managing a company. This applies equally to economically good and economically challenging times. The only difference is that a lack of transparency in economically challenging situations makes corporate management significantly more difficult and its absence can have far-reaching consequences. When company management acts on the basis of facts and figures, it creates a foundation for a future-proof organization. Ultimately, management based on facts and figures is an elementary component of good corporate governance.

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Interest rate reversal, energy price inflation, material price increases: according to the insolvency report by Creditreform Wirtschaftsforschung, the current economic developments and price shocks have hit many already struggling companies hard. The result after the first half of 2023: After years of falling insolvency figures, this trend has now reversed. Insolvencies have increased significantly in Germany with 8,400 corporate insolvencies. Medium-sized companies with 51 to 250 employees are particularly affected. Here the insolvency figures have risen by 133.3 per cent. Which is not surprising. Since the coronavirus pandemic and the outbreak of the war in Ukraine, SMEs have been surrounded by multiple crises. The reasons for a corporate crisis today can therefore be manifold. If a company is in crisis, only a swift and professional reorganisation can help to avoid insolvency and successfully lead the company out of the crisis. The aim of restructuring is to stabilise the company in the short term with immediate measures and to preserve its existence. In the long term, a successful reorganisation ensures the company’s success by sustainably eliminating the causes and triggers of the crisis.

The Decisive Factor in a Company Reorganisation: Time

The time factor plays a central role in a reorganisation. The earlier an impending crisis is recognised on the basis of early warning indicators, the greater the scope for action to avert the crisis and the better the chances of success. Early warning signals can be falling sales or margins. An advanced crisis in an already critical phase typically manifests itself in liquidity bottlenecks, which quickly lead to acute liquidity problems. There is then usually not enough time to avert the acute danger of insolvency. In addition to the time aspects, the financial prerequisites must be in place for a successful reorganisation. The company must fulfil a minimum of requirements in order to secure liquidity and finance the restructuring measures.

Proceed thoroughly and professionally: The way out of the Crisis

When THE MAK`ED TEAM is called into a company that is in crisis, we first discuss what stage it is at: On the timeline, crises range from strategic to operational and from stakeholder to liquidity crisis. Quick, strategic action is required to avoid insolvency. Crisis management is established within the company and a suitable reorganisation concept is professionally managed.

The restructuring concept analyses the causes of the crisis and develops ways to eliminate them. The reorganisation concept must also provide mathematical proof that the measures taken will lead to the desired success, i.e. that the company will once again generate profits and be competitive. This shows that the content of the reorganisation concept affects all areas of the company. From securing liquidity as an immediate measure to the complete restructuring of the value chain and marketing and sales. These are not only developed, but also mapped in an integrated corporate plan, which in turn forms the basis for controlling the implementation.

Creating transparency, building trust

The right communication is fundamental to all reorganisation and restructuring measures. Be it with stakeholders – creditors, employees, customers or other relevant persons. Restructuring communication is crucial for the successful realisation of the restructuring concept. After all, it’s not just figures, data and facts that are relevant – “soft” factors also count when it comes to convincing people to make concessions. Communication requires a great deal of experience, tact and sensitivity in order to “pick up” and “take along” the dialogue partners on the path to restructuring. Especially in family businesses. Reorganisation and restructuring pose particular challenges here, as the interests of the family and the company need to be reconciled and the family’s assets secured. There can be many emotions and complex constellations here.

The tools and methods that can be used here are just as varied and individual as the various crisis situations. With the right toolbox and customised methods, the desired milestones can be reached quickly and in a focused manner.

One thing is certain: the more advanced a crisis is, the more complex and difficult the reorganisation becomes, if it is still possible. That is why it is important to act immediately if you have a bad gut feeling and to have the situation assessed by a professional external expert, draw conclusions and take effective measures.

THE MAK`ED TEAM is an experienced national and international partner for the reorganisation and restructuring of medium-sized companies. We act with the right tools and methods for a successful turnaround. With our interdisciplinary team, we contribute our high level of expertise and many years of experience to restructuring projects in order to successfully accompany companies on their way out of the crisis.

Source: Insolvencies in Germany, 1st half of 2023, Creditreform Economic Research,

Insolvenzen in Deutschland, 1. Halbjahr 2023 | News | Creditreform

In the current economic situation, which is challenging for most companies, we will be devoting ourselves intensively to the question of what makes medium-sized companies resilient at our Event & Dialogue on 19 April 2023. In cooperation with the employee consultancy stg, THE MAK`ED TEAM invites managing directors, executives and HR managers to a joint evening above the rooftops of Nuremberg, which will be dedicated to professional exchange and dialogue. The focus will be on many practical topics related to resilience management. THE MAK`ED TEAM will give an overview of organisational resilience: How can a company develop the right balance between stability and flexibility? We will show management approaches and discuss resilience strategies suitable for SMEs. stg will again look at individual resilience: What can the company do to strengthen the resilience of its employees? The Event & Dialogue “Robust, adaptable, strong: Resilience Management in Practice” offers an intensive professional exchange. The agenda includes:

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The medium-sized companies sector is in permanent crisis mode. That is why the question is more urgent than ever for many medium-sized companies: How can we set up our organisation in such a way that it is immune to external disturbances and emerges from crises unscathed? How can the company grow and develop even in an unstable environment? This requires resilience.

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Current economic developments are increasingly unpredictable and times are uncertain for SMEs: This is why resilience as a strategic principle is becoming an important, even decisive factor for the future of companies.

What characterises resilient companies? Resilient companies are economically robust, resilient and have the capacity for continuous change. Resilience can be found at different levels in a company: At the macro level, it is about resilient processes and organisational structures, i.e. organisational resilience. At the micro level, it is about the individual, i.e. the resilience of each individual employee. The levels interact with each other within the company and in the company network. If the company wants to strengthen its resilience, it is important that both the organisation and the employees are strengthened in their resilience.

Resilience: What does it actually mean?

The term resilience comes from physics. In materials science, it refers to the ability of a material to return to its original shape after deformation. Transferred to a company, a resilient company is able to return to its steady state after a disruption, a crisis or a shock. And not only that: resilient companies can use the crisis to their advantage and emerge from it stronger. Resilient companies are able to react quickly to changes and – if necessary – to carry out the transformations that are crucial to success within a crisis. The word resilience thus includes not only the aspects of “standing firm” and “persevering”, but also the ability to adapt and innovate. In resilient companies, stability and flexibility are in a balanced, individually adapted equilibrium. But how does a company become resilient? In order to be able to offer our customers a holistic resilience concept and to ensure resilience at both levels in medium-sized companies, i.e. at the level of the organisation and at the level of the employees, we have agreed on a cooperation with stg, the employee consultants. THE MAK`ED TEAM, as a consulting firm, accompanies companies on their way to strong organisational resilience and stg supports employees in building individual resilience.

A Strong Cooperation: THE MAK`ED TEAM and stg

In the complementary cooperation at the organisational and individual level, medium-sized companies receive a strong overall package: THE MAK’ED TEAM, with its interdisciplinary team, has a lot of experience in building resilient organisations. Resilience plays a role in all areas of a company: digitality and agility are just as important as good resources, a positive corporate culture, transparent organisational structures or stable supply chain management. This cross-section makes it clear that resilient companies are not only better protected against crises – they are also fundamentally more sustainable, efficient and competitive. As a holistic consulting company, we know how medium-sized companies can position themselves resiliently in the relevant business areas. THE MAK`ED TEAM is rooted in medium-sized companies and works in a structured and process-oriented manner. Our way of working is well balanced between strategy development and concrete action. Companies that want to become more resilient with us at their side are not only resilient on paper, but resilience is anchored in the entire company and lived out in everyday corporate life. How far our resilience concept extends varies from company to company and depends on the individual company goals.

Since a company can only be resilient with a strong team, resilient employees are indispensable. This is where our partner stg comes in: The external employee consultancy strengthens employees with a resilience model. Resilient employees have the ability to adapt to new conditions, to grow in the face of challenges and to emerge strengthened from a crisis. For the development and strengthening of individual resilience, the corresponding mindset is developed, mental health is promoted and metaskills are strengthened.

Together, the teams of THE MAK`ED TEAM and stg develop resilience concepts for medium-sized companies that optimally interlock at the organisational and individual levels to ensure resilience at both levels in the company.

Our cooperation partner stg: Externe Mitarbeiterberatung (Employee Assistance Program, EAP)

“What happens to my customers when energy becomes more expensive?”. How will the high material costs affect my prices or my procurement market? These and other pressing questions are currently being asked by many SMEs. Questions raised by economic crises and changes in many influencing factors. Questions that should be answered at an early stage. Only then does the company have the best possible chance of averting potential risks and crises. This requires transparency in the relevant areas of the company, which can be created by an early warning system.

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Wie gehen Unternehmer mit der aktuellen wirtschaftlichen Lage um, in der Energiepreise, Lieferketten, Inflation und Fachkräftemangel zu deutlichen Beeinträchtigungen führen?

The press releases are piling up: small and medium-sized companies are increasingly experiencing economic difficulties – many have concrete closure plans and are implementing them. The offers for sale are increasing. Energy shock, brittle supply chains, shortage of skilled workers and inflation are the reasons. Price increases are not only hitting their own profit and loss statements, they are also causing customers to hold back and lower sales. An analysis by the information service provider CRIF sees an increased risk of insolvency for around 300,000 companies in Germany. That is around 10% of the companies in Germany. The industries that are particularly energy-intensive have already shown significant increases in insolvency cases. This situation calls for attention and caution.

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Sooner or later, undesirable developments in a company become apparent in its earnings situation. Once there, it is usually only a matter of time before the company’s liquidity is also affected. So, if there are negative deviations in sales and/or earnings compared to corporate planning, if the results are below those of comparable companies or even negative, it is imperative to take countermeasures. Precisely because time is usually of the essence in such cases, it is crucial to proceed thoroughly and professionally.

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People and nature are among the most sensitive areas in a company’s sphere of influence. After all, life and health are at stake here. Violations can have serious consequences. The liability risks arising from occupational health and safety and environmental protection law are correspondingly high. Of course, the basic obligations towards employees or other persons and the environment are known to every entrepreneur and compliance is not a new topic in these areas. Every company will consciously or unconsciously implement compliance measures in this area. However, the topic has become very much the focus of the authorities – and the focus of the public.

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No question about it! In economically uncertain times, many companies are susceptible to crises. Now is the time to take special care in risk management. In times of energy crisis, Ukraine conflict and supply bottlenecks, very few companies know what tomorrow will bring and drive on sight. However, anticipating the development of one’s company is crucial, especially in volatile times, in order to recognize crisis indicators in good time and largely avoid a crisis that could threaten the company’s existence. The StaRUG has made this a corporate duty. The Stabilization and Restructuring Framework Act, which came into force on January 1, 2021, aims to protect companies from insolvency and support them in a restructuring process through various instruments. Permanent planning and transparent risk management are mandatory components in the entrepreneurial toolbox. This enables management to assess how the company is developing at any time and to identify crisis indicators before the crisis makes big waves.

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