Restructuring Officer in high demand, says advisory

The importance of Chief Restructuring Officers has significantly increased in the past 10 years, with many believing their deployment to increase even further in the next decade, research by Roland Berger shows. No longer are companies bringing in CROs to just restructure their business after a crisis, more and more firms are hiring CROs to transform their business before a crisis might occur, resulting in a changing role of the CROs.

Roland Berger recently released new research into the role of and trends in the deployment of Chief Restructuring Officers (CROs), in its ‘CRO – The company saviour with a new profile’ report. For the research, the consulting firm surveyed nearly 100 CROs and restructuring practitioners.

In the past 10 years, the demand for CROs has increased significantly, with 79.6% of CROs saying the use of their services has increased, and is expected to increase even further in the coming years. More than half of respondents expect to see more CROs in ten years to come, compared to 2% who think the number will decrease.

Changing role
Not only the number of CROs is changing, also the role they fulfil, as they are taking on a more proactive role. No longer are CROs only brought in by external stakeholders as a restructurer of companies in an acute state of crisis, but more and more companies are hiring their own CROs to transform their business before a crisis might occur. The vast majority of restructuring practitioners feel that it makes sense for the CRO to be involved in the development of the rescue plan.

“Whereas CROs used to be brought in primarily to restructure companies, what they are now doing is transforming companies before things get to that point, so there's no need for them to go in and rescue the company at all,” explains Sascha Haghani, Partner and Deputy CEO Germany at Roland Berger.

As CROs are expected to master the full spectrum of entrepreneurial functions, including financing, cost cutting, change management and stakeholder management, they are becoming temporary CEOs, fulfilling the role of developer, implementer, moderator and controller.

According to Roland Berger, as the deployment of the CRO is limited, companies need to have a clear picture of the CRO’s role, which criteria need to be met when talking of a successful transformation, and define a clear exit scenario. The majority of respondents feel that the deployment of the CRO should end when financing has been secured, followed by the achievement of sustainability and the implementation of the restructuring concept, all of which indicate a position of the company to move forward with the new processes on its own.