Risks. The biggest risks in this context include the failure of the carve-out in the preliminary stages, an aborted sales process because of uncertainty on the part of the buyer, or even an inadequate transition to autonomy or integration into another company. Even during the preparatory stages, employees and managers often become disorientated and dispirited. The rejected business unit often feels stigmatised, which makes positive action more difficult. The structures, processes and corporate culture also need to be reviewed for the possible changes to the company's orientation, size and affiliation.

Transition Management. Transition Management ensures the transfer of the outsourced business unit to a new company in a smooth and forward-moving manner, and with a powerful and positive start. Early on, this requires a clear design of the change processes and a prompt implementation of measures, which ensure that the performance curve is being maintained. It is important to be able to understand the meaning of the carve-out as well as the rather extensive changes in the everyday working life of the workforce. Managers will be needed to promote the new, autonomous company. External and internal insecurity needs to be countered with a plan and perspective.

Risks. As one of the foundations of successful business, corporate culture is often underestimated in the run-up to such an initiative. Often enough, the presentation of the culture change remains vague, the link to the business in the dark, the scope for interpretation arbitrary and the consequences for one’s own actions unclear. The biggest risk is that the programme will not be considered urgent enough and will simply be waited out as if it were just one of the CEO's whims. In this case, the culture change will be dragged along, and not only does nothing change, but resistant forces in the company even feel strengthened.

Transition Management. Transition Management supports a company in transferring its existing culture to a new culture. It is important to understand meaning, approach, responsibilities of all employees and the necessity for culture change. Furthermore, the culture needs to be aligned in order to support the business model, market environment and success factors of the company. In the best case, the initiative creates a spirit of optimism and is part of the (new) mission statement. Ideally, employees and managers should contribute to such a process and be actively involved in transferring the values into their daily actions. The initiative must not stop with development or proclamation, because attitude or behavioural changes are long-term processes.

Risks. Digital Transformation does not only concern the introduction of new technologies, but also involves managers and employees because of the profound changes to the existing working environment. There is often also the need for a culture change, in which cross-functional collaboration, thinking in processes instead of inflexible structures, independent action, transferring knowledge and working in projects become increasingly relevant. The greatest risk is that new technologies require modern forms of collaboration, but the culture and working method remain behind the technical advance, as do the people who should work with new IT systems.

Transition Management. Transition Management needs to ensure that the targets of the digital transformation are clear, the path is comprehensible, and managers and employees understand the changes in their daily routine. Top-level management should be able to present the digital strategy, its added value for the business and the actual impact on the different areas in a clear manner. Managers need to be enabled to convey the digital transformation to the team in an understandable way as well as take the fear of initially unfamiliar approaches away from their employees and mobilise them for implementation. The future with “digital people” needs to give people space and time for the people, to become familiar with new working methods, but also new ways of thinking. Therefore, the basis for a successful digital transformation is the understanding and participation of all involved and concerned parties in the company.

Risks. If the current and potential owners and investors see more risks than opportunities for themselves in the planned transactions, the project will fail. Often, the withdrawal of a single involved party is enough to jeopardise the project, and the given time period is strictly limited. Thus, the special characteristic of financial restructuring is the divergence of the interests of important stakeholders.

Transition Management. Transition Management helps balance these interests in negotiations and maintaining the operational business, even though the outcome of the negotiations and the specific consequences for the individual stakeholders are not yet known. Employees and managers, customers and suppliers need to be kept in line, and rumours need to be countered without being able to use substantial facts from ongoing and confidential negotiations. In this situation, the trust of stakeholders in the management is crucial, and therefore, the most important task is to strengthen it.

Risks. Three risks in particular need to be taken into account. Firstly, the new units need to be connected intellectually and mentally to the company. Secondly, care must be taken to ensure that they start out motivated and eager. Thirdly, the old units also need to be taken into account, as they often put up resistance because of the fear of becoming insignificant.

Transition Management. Transition Management needs to ensure that employees understand the internationalisation, accept it as progress and safeguarding for the future and, in particular, that they support the new regional units in their development. Moreover, governance, responsibilities and roles should to be clarified and implemented because ultimately, the self-conception of the different operating units needs to be clear. Often, the rules of collaboration need to be redefined in the context of very different cultures, and collaboration and development of the common corporate culture should be promoted.

Risks. M&A transactions and the ensuing post-merger-integration put a company in a critical mode. Internal structures and processes are being revolutionised, and the cultural framework is being toppled. Externally, there is the threat of image loss and reputational damage as well as a loss of confidence. Often, the subsequent integration is not being considered well enough during closing preparation, the start is difficult and the employees “taken over” do not feel sufficiently involved, while the “acquiring” employees just wait and see how the project develops. Uncertainty, fear regarding loss of control, emotional involvement and cultural differences can, in extreme cases, lead to paralytic shock and productivity loss, while there is a particularly strong external risk of the deal and its success being interpreted negatively by the market.

Transition Management. The management must set up the new company with consideration and circumspection, introduce the necessary changes and perhaps even address restructuring measures at an early stage. Transition Management needs to orchestrate the integration on all levels, accompany the changes (from processes to structures and tasks), provide understanding, give room to merge, and create motivation for the new situation. Cultural differences need to be addressed and handled through to a new, common self-conception as a company, which subsequently leads to a confident brand identity and convinces the customers. Externally, integration also needs to be presented as a success, and uncertainty of the stakeholders needs to be avoided.

Risks. The first question to be asked is: why is this particular person now the right one for the job? This is a question of trust. It may also be that the team questions strategy, priorities, important projects and structures. This is a question of leadership. At the same time, the new CEO or board must assert their claim to leadership from the start. This is a question of authority. Naturally, they should provide evidence early on that they are leading the company.

Transition Management. Transition Management can provide support for all three challenges by deliberately addressing these three questions and therefore enabling them to be discussed as well as offering evidence demonstratively. It is not just about verbal and non-verbal communication, which needs to underline the claim to leadership, but also about top management teaming up. Necessary tasks include understanding individual roles and cooperation within a team, revising goals, strategy and priorities. Furthermore, leadership needs to be expected and the management circle needs to grow together. Externally, the change should naturally be considered as good.

Risks. Often, this change affects all areas of the company and, naturally, its customers and the market. Changing course leads to the process of defining and developing the reorientation, which should include many important high performers. An unnoticed or wrongly interpreted reorientation is a significant external risk. Internally, however, the reorientation and all its consequences need to be understood, accepted and implemented.

Transition Management. Throughout the development process of explanations and interpretations, Transition Management provides support, and thereby secures the motivation and engagement of the most important leaders in the company. They must become ambassadors of the reorientation, consider the consequences for their respective departments, and implement them. It is also necessary to consider the changes due to the reorientation that may be regarded as painful by some. Externally, the validity and the advantages of reorientation for customers, partners, the public and investors must be made clear in order to direct business in the corresponding direction. Additionally, the implementation of the reorientation must be supported in a consistent manner.

Risks. During a reorganisation, a crucial question long before implementation is: who will be involved in the planning process? This is because a reorganisation inevitably entails an increase in responsibility and influence for some, and a corresponding loss for others. Thus, subjective interests are constantly at play, which can distort the search for the most objectively appropriate transformation. Should the decision be made to entrust the smallest possible circle of people with the planning, the risk of a broader resistance to the new organisational form increases. Those that feel disadvantaged will try to question the validity of the plans, which will slow down implementation and often water down the project. In the worst case, two camps of real or supposed “winners” and “losers” will face each other, which will burden cooperation in the company greatly.

Transition Management. In rebuilding an organisation, Transition Management is already necessary in the planning phase. This is the case when selecting the participants because, being highly political, good reasoning and tactful communication is required. Transition Management will be all the more necessary when the new organisational form is decided upon and being presented. Subsequently, it needs to be introduced and established – this will not happen without conflict. After all, many need to get used to something new, and it is inevitable that some will see themselves as losers. This applies particularly to those needing to be taken along, convinced and shown the opportunities in the new model that have been created for the company or, perhaps, for themselves. Transition Management contributes to transferring the organisation as smoothly as possible into its new form.

Risks. Rebranding processes are occasionally designed and implemented in a more visual than content-related manner, which entails the risk of misunderstanding and missing opportunities that further raise the company's profile. A lack of external and internal understanding would result in decreased sales and less differentiation from the competition. In such a case, brand values and promises become meaningless.

Transition Management. Transition Management assists the conceptual rebranding process as well as the implementation at all points of contact that the company and its brand have with the inside and outside world, right up to the inclusion of all relevant stakeholders. The process itself must be flanked by communication and change measures. Ideally, leadership and employees can deliver input and get to know the process from an early stage. Successful rebranding helps bind customers and investors, prompt a preference between potential customers and suppliers, achieve or improve an emotional bond between employees and enhance the company’s profile with the public.

Risks. The more far-reaching a repositioning exercise is, the more risky it is if the stakeholders do not understand the new profile, let alone internalise it. Although the repositioning is performed on paper, the underlying promises to the employees, customers and public however are not consistently implemented or perceptible at all points of contact. Contradictory statements can completely thwart the success of a repositioning and jeopardise sales under the new framework.

Transition Management. Transition Management needs to ensure that the new position is developed internally in order for it to be better supported, understood and accepted, considered in all its internal and external consequences, and to carry the corresponding changes into the daily operations. Externally, the validity and consequences also need to be made clear, and the public appearance needs to be adjusted, ideally in a distinctive manner. It is often forgotten that the sales team must be competent and needs to be able to conclusively demonstrate the repositioning from the customer perspective.

Risks. The risk of a reputation crisis is that it can grow into a sales and results crisis, as customers are having doubts about products and are demanding discounts, or have even stopped buying altogether. Leadership and employees are also beginning to question the company and its strategies, management style, decisions and procedures.

Transition Management. Transition Management opens a path out of an existing crisis and identifies fields of action and need for change, in order to avoid future crises. Transparent and timely internal communication – regarding the crisis and how it will be alleviated – is necessary to support the numerous ambassadors to the public. Managers need to be involved in the process at the right time. External communication is essential for securing or regaining trust in the “good name” and product of the company. A positive perception of the company is indispensable for managing the crisis successfully. However, many crises make themselves known beforehand and can be fought with issue management before they arrive. Therefore, the development of a general concept for crisis communication – including clear processes and responsibilities – is helpful.

Risks. Management is under tremendous pressure to act. The greatest risks include insecurities, demotivation, and a drop in performance with leadership and employees as well as a loss of trust from customers and partners. Furthermore, implementation is usually complex, as it involves many business units and acting persons. In particular, the insecurities of employees, customers and partners can bring about a drop in performance, sales and, at the very least, a decrease in implementation speed.

Transition Management. Stable turnover and rapid implementation are fundamental for ensuring the ability to act and stabilise the company instead of making the initial situation worse. Transition Management needs to explain the process comprehensively, inform affected parties in a timely manner, support the entire process and, in the case of extensive lay-offs, ensure that the remaining employees see and embrace a new perspective. High performers will otherwise be the first to go, and the goal of consolidating the company future will be thwarted.

Risks. A turnaround is always associated with huge risks that arise from destabilisation due to the specific threat of insolvency; customers and banks are extremely unsettled, as are employees and managers. Although an insolvency process or ESUG proceeding is bound by rigid procedures, it deals with similar risks: if the company fails to instil confidence in the measures it is taking, it is even less able than anticipated to satisfy creditors' claims or successfully overcome a turnaround.

Transition Management. Together with the involved parties, Transition Management must develop a very precise plan for the process, and communicate the sense internally and externally that the situation is under control. This results in calmness and the ability for rapid implementation. It is important to build a basis of trust and generate motivation for implementing measures relating to turnaround or insolvency proceedings. If there is a prospect for continuation, its development, acceptance and mobilisation become essential.

Risks. Very often, the entire company is affected. A transformation program always requires the understanding and involvement of the people in different functions and from different units. Many transformation programs fail because human factors are not considered. The interests – but also the fears, insecurities, concerns and mistakes – are left out of the equation. The inertia of an organisation is often completely underestimated.

Transition Management. Transition Management must ensure that goals and tasks are clear and support the well-ordered process, make it understandable and turn concerned parties into involved parties. Transformations require strict project management, with task packages visible to the organisation. Milestones and success need to be conveyed. In their capacity as ambassadors, leadership needs to be enabled to not only bring transformation to the teams, but also to mobilise their employees. Top management must agree and be able to enact their agreement. Employees need the opportunity to get actively involved. Transformation processes require patience and rely on success stories (and performance measurement) throughout their entire course.

Risks. When managers and employees hear about new growth goals, the first questions that they ask are: “why this goal?” and “how can it be achieved?”. If neither question is answered convincingly, there will be a lack of motivation to achieve this goal from the start. In the worst case, the organisation can fall into a state of defiance, which promotes doubt in the sense or achievability of the growth program and turns this doubt into a self-fulfilling prophecy.

Transition Management. Conveying the urgency of a growth goal and program is one of the toughest challenges. The program can only be successful if middle management takes charge of their role in the process and understands how they can contribute to its success. To make this possible, every change must be systematically and coherently linked to and based on the overall goal. Motivation and optimism must not only be raised in the beginning, but continually upheld. Transition Management delivers the support that is necessary to make the changes required to achieve the designated goals, and to develop the mindset and spirit essential to a successful growth plan.