[minute-consulting] Operational Restructuring vs. Banking Restructuring
Last Updated on 13 July 2020 at 18:58
Question: What is the best Operational Restructuring method for a business ? Banking or Consulting ?
Answer: If a business is in a need for operational restructuring consulting, the route offering better results in terms of business output is on-site consulting & implementation. Indeed, banking exit operations are different in on-site restructuring. However, in some cases, a banking-based restructuring can be a better way, especially if the cash-flow is missing and the operational improvement program cannot offer a great experience.
All things considered, what’s the better method ? I always head about the banking path when the business is in insolvency, but never about the ‘consulting path’ in such a situation. An operational restructuring mandate is challenging and interesting as long as the operational budgets pay for a growth strategy. Also, I am right in saying that Restructuring Consultants would be the ones playing the interim CEO or Chief Restructuring Officer type roles in such special situations.
Money is not the primary motivation to take those mandates. It is also about ‘fixing’ business operations. If money is the primary motivation, then exit operations are a better deal. Some businesses at the mid-markets segments have decent and experienced restructuring teams groups.
Any other thoughts ? Are banking and exit operations the clear way to go ?
It depends. Operational restructuring consultants are passionate about improvement aspects. However, this passion does not translate in going full with the consulting path because the implementation is much more important in such a situation. Banking and financial exits do not have sufficient on-site experience. The more hands-on experience is with consulting and on-site implementation.
If a business wants to have a better impact on the company, then the consulting path is the better path. A junior-level investment banker can literally kill a company, despite great financial modelling or impressive business pitches.. The banking industry do not care about the company, but only about the deal flow and cash flow.
Is it possible to work with both banking restructuring and consulting restructuring ? The answer is definitely yes. In some industries and geographical areas is quite common. However, in the modern market, the globalization leads to adaptation of a common approach which is either banking approach or operational approach.
Do you have a question about the operational restructuring ? Ask your and get it answered on this blog.
Elena Debbaut is a strategic execution expert to boards and executive teams. She leads and advises on complex transformations when governance barriers, internal politics, or structural fragmentation prevent organizations from executing critical decisions.
Specialities:
• governance-constrained transformation
• operational restructuring
• strategic recovery & execution