Communications in a Multi-Crisis Environment

When the COVID-19 pandemic emerged as a serious challenge for corporations at the start of 2020, it seemed as if the business environment could hardly be more volatile. Yet nearly three years later, COVID-19 is still present, and serious geopolitical tensions with massive economic implications are contributing to even greater volatility.

This environment is already driving several German companies to consider or initiate fundamental restructurings — with experts anticipating many more to come. But unlike previous eras, affected companies may find the process for reaching financial and operational stability more complex and unpredictable. That’s because a multitude of crises combined with ongoing issues from before the pandemic are creating so much uncertainty.

Global Disruption of Supply, Demand and Financing

The war in Ukraine is disrupting businesses worldwide on multiple fronts. In addition to affecting their ability to procure and move goods along supply chains, the war is driving up prices for raw materials and energy. The higher prices are squeezing the margins of companies that are unable to pass the full increases on to their customers. On top of this, inflation is broadly escalating, weakening overall customer demand. A looming recession in some of the world’s largest economies is further dampening B2C and B2B demand.

Meanwhile, central banks are tightening monetary policy, driving up interest rates and fundamentally changing the landscape for debt financing. Financial investors as well as corporates within these unsettled capital markets have become risk averse, limiting the access to financing and the chances for divestments at reasonable prices. Finally, companies that received state loans during the pandemic will eventually have to repay them, thus reducing free cash flows.

Ongoing Challenges Caused by Global Megatrends

A number of mid- to long-term issues that predate the pandemic remain in critical need of being addressed more fully. One is the move toward digitalisation, which affects the entire value chain from production to retailing, putting companies under enormous pressure to transform key aspects of their businesses. Another is decarbonisation, a megatrend driving the need for significant investments and realignments for sectors such as automotive, energy and real estate. ESG and sustainability are also a focus, with compliance expectations from investors to consumers to employees. Lastly, corporations are challenged by the well-documented labour shortages.

A New Environment for Restructuring Communications

Companies will do everything in their power to adapt and survive in this new environment, including drastic restructurings. Not only is the number of restructurings likely to go up, but we can expect individual cases to have a high degree of unpredictability due to the crises and issues mentioned earlier. We’ll likely see adjustments and readjustments of measures taken throughout the restructuring process.

With all this uncertainty, company stakeholders will expect timely and frequent reporting from management. This is where the importance of a sound restructuring communications strategy comes in. With proper execution, restructuring communications is designed to build and maintain stakeholder confidence in the company and, more specifically, in its leadership — even with limited clarity on the outcome or timeline of the process.

Specifically, successful restructuring communications demonstrates two qualities about the company’s top and upper management that appeal to stakeholders: competence and commitment to save the company. And the more stakeholders are onboard, the more likely it is a company will be able to enforce its restructuring plan — even against the will of individual stakeholder groups when they are adversely affected. That’s key, because sooner or later, groups who feel they are losing out are likely to resist.

Answering Additional Challenges

Communicating throughout a restructuring process is always challenging because a company must bridge two aspects that are hard to reconcile. On the one hand, the need for information is immense: Stakeholders are watching the company’s every move since they have so much to lose — whether it’s jobs or revenues or investments. On the other hand, precise outcomes and processes are generally unsure, because it is often impossible to tell how communication measures will work. The goal of restructuring communications in this context, then, is to convince as many stakeholders as possible — as thoroughly as possible — on how things will turn out in the end without giving them definite information.

The way to manage this is to focus on the two qualities of competence and commitment:

Competence is the ability to handle the issue. A majority of key stakeholders must perceive that management has the business and finance knowhow to lead the company out of the current situation and into a better future. Essential for demonstrating competence is to transparently outline not only the overall short- and long-term challenges that led the company to restructure, but also the risks for temporary disruptions that might affect the turnaround.

Commitment is the willingness of management to do everything possible to preserve the company and position it for future growth and profitability. Once a majority of stakeholders realise that management will give its all, it becomes easier to create an understanding and acceptance of difficult and unpopular decisions. To demonstrate commitment, it’s essential to outline both the need for restructuring and a broad action plan for doing so, and to keep all stakeholders updated on progress toward saving the company.

It is vital for company executives to be consistently present for stakeholders and to communicate the same set of messages. Depending on the measures taken and the stakeholder group, middle managers and team leads may need to be available as well. Communications measures should include:

  • Precisely outlining the challenges and risk factors that the current environment imposes on the company, as well as goals and a clear action plan for reaching stakeholders even with adverse factors at play.
  • Regularly updating key stakeholder groups about measures that affect them (e.g., informing investors about debt reorganisations or employees about job cuts) while reiterating the goals and a broad action plan. This is not about sharing all information at the time it emerges, however. Rather, it is about balancing the trade-off between maintaining buy-in from stakeholders by letting them know where they stand and releasing premature information that could jeopardise trust.
  • Managing uncertainty in the process by being present for stakeholders. This means, for instance, showing up when stakeholders have pressing questions even when there are no clear-cut answers.


In such a turbulent macroeconomic and geopolitical environment, we can expect an increase in restructuring cases. Moreover, we can anticipate they will contain a high degree of uncertainty, with a corresponding high demand from stakeholders for information and communications. Now, more than ever, a sound restructuring communications strategy — with competence and commitment at its core — is key to retaining stakeholder buy-in and confidence in company leadership to carry out its plan.


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