1、Section 2 Establishing a Restructuring AgencyCONFIDENTIALSection 2Establishing, operating and developing a Restructuring AgencyChapter 1Establishing a Restructuring Agency2Overview2Initial funding and ongoing financial support2Ownership structure3RA organisation and structure5Recruiting RA Manager a
2、nd Principal Consultants7Recruiting consultants and support staff9Developing best practice HR policies and staff retention10Selecting premises & facilities11Developing standard operating procedures and suitable governance structures13Chapter 2Operating and developing the RA15Overview15Adopting princ
3、iples of effective management16Developing sustainable consulting methodologies17Developing people training & development18Developing ongoing commercial business20Proposal and Terms of Engagement (ToE) management22Consultancy project management24The importance of client relationship management25Chapt
4、er 3Growing the Restructuring Agency27Overview:27Strategic Management and Development of the Restructuring Agency28The HR dimension:28Establishing and Operating a Restructuring Agency Manual44af2a8d-a7ed-4b24-b37c-1b4573f07fca.pdf, June 2002- 29 -Chapter 1Establishing a Restructuring AgencyOverview
5、There are three distinct groups of actions necessary in initially establishing an RA these are: Agreeing on the physical structure and ongoing financial support legal format, acquiring premises, furniture and equipment; and Hiring and training the right staff - managers, principal consultants, consu
6、ltants and support staff Implementing standard operating procedures to enable a suitable working environment These areas are discussed below under the following headings; Initial funding and ongoing financial support Ownership structure Organisation and Structure Recruiting RA Manager and Principal
7、Consultants Recruiting consultants and support staff Staff retention Selecting premises & facilities Developing standard operating procedures and suitable governance structures Developing sustainable consulting methodologiesInitial funding and ongoing financial supportKey points Initial finance is r
8、equired to cover initial start-up costs and provide the necessary cash flow to cover monthly operating expenditure until such time as the RA is able to collect professional fees from commercial clients. Under the SOERED project the RAs are funded on a sliding scale for the first three years of their
9、 existence. The funding is respectively 100%, 70% and 40% in years one, two and three. Although fees were collected from Phase I and Phase II pilot enterprises restructuring Ongoing financial support will be required to cover monthly expenditure up until the time that professional fees are received
10、from commercial clients; Short term finance may still be required even once fee earning work is secured to smooth out the peaks and troughs of operating expenses and revenue collection In the absence of international donor financial support there would need to be similar financial support from the l
11、ocal government (or agencies) to ensure that RAs could become established.Action Points: Agree resources to be provided from stakeholders assets, working capital Agree with stakeholders the provision of 100% funding of the RA for at least the first year of operations Agree further funding (less than
12、 100%) in respect of years two and three based upon a sliding scale of reduced funding Agree initial funding levels to support purchase of office furniture and equipment and immediate working capital requirements Set up a bank account with access agreed so funds can be transferred.Ownership structur
13、eKey points The ownership structure is less important for future success of the RAs than clear policies, procedures, governance and controls. Where RA is publicly owned, then governance is an important issue since future sustainability will depend upon decisions being taken based upon commercial con
14、siderations such as risk versus reward profile, or performing work only when it is commercially attractive. Under SOERED the RAs were set up as institutions with a majority local government ownership. Two of the RAs did have large private investors alongside local government. These arrangements made
15、 sense at the time because they were convenient and allowed an element of local government oversight in the management of the RAs. As the project progressed and the RAs moved towards a more commercial business model (i.e. selling and delivering commercial consultancy projects) the ownership position
16、 was always likely to require modification to allow equity participation from RA consultants and managers. This is a similar to what has happened within the western models of smaller management consulting firms where many such businesses have a significant employee ownership component. The UK Govern
17、ment through DFID, although contributing to the start up costs and ongoing operating costs, did not require any ownership stake in any of the RAs. The local municipalities also provided start-up capital to purchase fixed assets, such as office furniture and essential equipment. The ownership structu
18、re does matter in the longer term but in the short term there are also operational and motivational considerations that are important: Need for operational decisions to be commercial: Where the RA is publicly owned, then governance is an important issue since future sustainability will depend upon d
19、ecisions being taken based upon commercial considerations such as risk versus reward profile, or performing work only when it is attractive to do so. Need for clear governance structures: Ownership structure less important for future success of RA than clear policies, procedures, governance and cont
20、rols (see below) Confidentiality and distance from government: Consultants will require access to “confidential” information of Enterprises to properly undertake their work. Accordingly “independence” of RA / Consultants from Government (and other third parties) should be maintained so that Consulta
21、nts can be effective. Short-term behaviour: Current models encourage short-term behaviour. These are not conducive to sustainability or a long-term approach. Under government ownership staff want to receive as much as possible now as they have no ownership stake in the RA they ignore the long term a
22、s they have no reason to build for future or even keep cost structures down. There are also problems with corporate governance. If a major private investor is involved, again staff has no stake and therefore no reason to think about the future. There is also evidence that the Private investor too wi
23、ll act in their best short-term interests. Therefore there needs to be some way to involve consultants in equity or incentivise them in some other way which would make them behave in a less short-term manner; perhaps some modified form of partnership. However, we should recognise that, whether private or government controlled, any developing institution
