Looking for a CRO?
The Chief Restructuring Officer (CRO):
Yielding transformation beyond cost-cutting
When you have to accomplish a challenging corporate transformation, like a major restructuring or a substantial structural innovation, and particularly when your organisation is facing a corporate crisis, you might want to add additional power and competency to an existing executive team. This is when it could be useful to drill from the temporary support from an experienced Chief Restructuring Officer (CRO). In the practice, the financing banks often ask for an additional CRO whenever the risk levels pass beyond a certain point. Whilst in the past the focus has often been on driving cost-reductions, more and more people understood that sustainable success generally requires to reach well beyond the cost-cutting, particularly when you need to inspire and enable an organization to drive top-line growth.
3 key success factors
From my experience of a number of challenging transformations, three factors are particularly important for success in such situations:
Factor 1: The CRO should work for reaching an alignment between banks, shareholders, supervisory board, executive team and - not to forget - the staff. Gaining and keeping the respect and trust of those 5 different parties, understanding and integrating their respective needs and interests in the transformational process is vital for success. A substantial amount of time needs to be dedicated to permanently ensure the parties buy-in to the transformation.
Factor 2: Nothing generates more trust than positive results. When the parties start to see that the transformational initiative generates faster results with positive outcomes, the level of trust increases, tensions are reduced and the transformation gains further momentum. So the CRO should ensure appropriate focus on realizing early-wins.
Factor 3: As the CRO often acts with formal powers, he becomes the interim CEO for transformation. This might create latent or explicit tensions or irritations in the management team - particularly with the CEO and/or COO. Rather than acting like a bulldozer, the CRO should engage with the existing senior executive team and clearly address expectations and work towards a shared strategic plan. This explicitly includes his own exit scenario.