In times of crisis, CROs are often the last line of defence, tasked with securing liquidity, reorganising the business on a stable basis, and preserving jobs. The pressure is high: for companies, it's about survival, and for financiers, it's about protecting significant investments. When selecting CRO candidates, the general approach is „no experiments.“ „If a bank has worked well with a CRO before, they’ll bring that name up again when the next crisis hits“, comments Michael Hengstmann, founder and managing director of interim management services provider Executive Interim Partners (EIP).

However, the duration of these mandates can often span months, or even years, and with the increasing number of restructuring cases, many of the desired CROs are already taken. „We're facing a bottleneck“, says Hengstmann.

Not all restructuring professionals are willing to take on a CEO or board member role, as these positions come with greater legal liabilities. Some prefer to serve as authorised representatives instead. Adding to the challenge is the industry's growing concern about a lack of new talent. „We’re too many old white men“, admits Hengstmann, who is 60 years old himself. There’s a shortage of younger professionals, and few women are pursuing CRO careers. In his own consulting firm, only two of the 35 senior executives are women. „In other restructuring firms, the proportion of women is unfortunately similarly low.“

At Alix Partners, women in restructuring are also in the minority. „Of course, we want more women on our team – and we’re doing a lot to make that happen", states Rainer Bizenberger, partner and managing director at the consulting firm, and co-chair of the restructuring advisory working group at the Turnaround Management Association (TMA) Germany. He adds that pragmatic solutions are being explored, such as allowing children and accompanying persons to join business trips.

Bizenberger, who regularly acts as a CRO, also mentors new CRO candidates at Alix Partners. Interested candidates can accompany experienced restructuring professionals on mandates, often as part of a CRO's advisory team. „It’s a great way to get to know different stakeholders on the job“, says Bizenberger. He built his own network over more than 20 years, starting with ago through early assignments in restructuring advisory. Bizenberger sees an opportunity for banks to be more open to new CRO profiles, especially for less complex restructurings. „No one needs to start with a billion-dollar mandate.“

For younger restructuring professionals who aren’t yet well-known in the industry, getting started in a CRO career is often difficult, observes Hengstmann. He is currently working on a training program for emerging talent. The content is being developed in collaboration with Henning Werner, professor of transformation, restructuring, and rehabilitation at the private SRH University in Heidelberg.

Of the 35 EIP employees, nearly a dozen are already working as CROs, and many others have expressed interest in further training. „We want to expand the base with this self-financed seminar“, explains Hengstmann. The focus areas are still being developed.

Hengstmann is in discussions with representatives from various banks to understand which skills they value most in restructuring professionals. „We also need the restructuring departments of banks on board so they accept new CROs“, he believes. In addition to industry knowledge, banks often highlight implementation skills, assertiveness, communication abilities, and leadership qualities as essential.

Ahead of TMA's annual conference in November, the association surveyed bank representatives. All agreed that the demand for CROs would rise, but the availability of qualified CROs was considered „insufficient“. Nonetheless, 80% of those surveyed indicated a „moderate“ willingness to test new CRO profiles. „Everyone understands that a greater willingness is needed to collaborate with new CROs“, says Bizenberger. The TMA working group is actively discussing how to connect banks with up-and-coming restructuring professionals, perhaps through networking events. The industry association hopes to increase awareness of new profiles in financial circles, even outside of specific restructuring cases.

The most important skill for a CRO, according to the TMA survey, is stakeholder management. Restructurers need to balance various interests and mediate between different positions. Time commitment and personality are also crucial – these aspects are seen as more important than industry expertise. „Particular interests won’t move a restructuring forward. A CRO must be someone who can build bridges between stakeholders“, says Bizenberger.

While technical qualifications can be taught, these personal qualities are difficult to acquire via theory. Leadership skills come with years of professional experience. As a result, a new CRO candidate is not typically a recent graduate. „When we talk about „young“ CROs, we mean people in their mid-to-late 40s“, notes Hengstmann.

Banks are increasingly expecting experienced restructuring professionals to take a more active role in attracting new talent, observes Hengstmann. He argues in favour of a dual approach, where an experienced CRO and a younger one work together on a mandate. The younger candidates can attend bank meetings, learn about the restructuring process, and, conversely, bank representatives can observe the CRO candidates in action, build trust, and assess their work style.

For aspiring CROs, a two person mandate offers a valuable opportunity to test whether the CRO career is right for them. „You only realise it in practice“, believes Hengstmann. The job is physically and mentally demanding. Restructurings don’t respect after-hours or weekends. Major decisions must often be made under significant time pressure. „As a CRO, you have to deliver unpleasant news, like when a company cuts jobs.“ These are emotional situations for the affected employees, and Hengstmann has witnessed a wide range of reactions, from tears to shock to open threats. „You need to be able to handle that.“

The social life of a CRO suffers during a mandate, admits Hengstmann. „The intense phase of restructuring often lasts six to nine months. During this time, hobbies and social life take a backseat.“ Despite the challenges, Hengstmann would choose the CRO role again. „It’s incredibly fulfilling when a company stands strong after a tough restructuring phase and can offer long-term job security," he says. He hopes more candidates will be drawn to this demanding role. The CRO training program is expected to launch in the first quarter of 2025.

Bizenberger chose restructuring work because of the wide range of strategic and technical topics it covers. „This aspect still appeals to younger colleagues today“, he notes. „There is interest. There are qualified young restructuring professionals who are eager to take on a CRO role.“ Now, the industry needs to clear the path for them. „We need to give them the chance to gain that experience.“