Ellie McIntyre

Use Training to Remodel Your Business

Organizational Restructuring: Eight Important Considerations for any Business

What do you think about organizational restructuring? When would it make sense for your business? Are there pros and cons to this business practice?

Reports of organizational restructuring seem to increase during recessionary times or when the economy is declining, as has been happening for many months now. In addition, specific business challenges or competitive issues may heighten a sense of urgency. Unfortunately, some business decision-makers react impulsively or immediately start jumping off a cliff—before thinking it entirely through.

First, it’s important to determine the business-case reasons for restructuring before implementing such an event.

To avoid making hasty decisions that could possibly end up jeopardizing your business even more, you may want to first consider the following steps or measures:

1. Think strategically. Design the restructuring around the business’s future state, as well as its present one. Think it through with all members of the senior team. "Begin with the end in mind," as best-selling author Stephen R. Covey wrote in his book, The 7 Habits of Highly Effective People. 
2. Frame the restructuring. In other words, answer questions such as: What is it that you’re going to be doing? Why do you need to restructure? How will the restructuring fit your business model?
3. Analyze business processes before immediately taking out the organizational chart and striking through those little boxes. A business should be very careful about depleting its talent reservoir. Remember, recruiting and hiring new talent is a very expensive process.
4. Strive to be proactive, rather than reactive. Think about what positions will drive your decisions—how many people will you need to drive those business processes, as mentioned above. And what you don’t want to do before implementing a downsizing or organizational restructuring event is say, "OK, these are the last people that came in, so they’re the first people out." That’s not going to help you at all.
5. Avoid becoming a ‘copy-cat.’ Resist the temptation to execute a downsizing or restructuring event as a quick fix or with a one-size-fits-all approach. We see this --- too many business leaders say, "Well, if everybody else is downsizing, then we should downsize, too.
6. Consider the potential financial and customer-service downsides to a restructuring. Some businesses can inadvertently make decisions that end up costing them more money in the long run. Some businesses can also wind up suffering customer losses that could have been avoided. Or, alternatively, if the restructuring will help you increase services or sales call volumes, for instance; and further enable you to increase revenues, then it might be worthwhile. Make sure you can answer the question, "How is this restructuring going to impact my customers?"
7. Place a high priority on change management communication planning. This consideration is very important because it can affect employee and stakeholder morale. Change management communications can make all the difference in whether or not you reach or maximize the benefits and efficiencies you strive to gain by an organizational restructuring. Finally, remember to communicate openly and often.
8. Include your financial and human resources (HR) professionals in your planning and decision-making processes. These professionals are trained to help with all eight of these considerations.

Again, carefully think through all your business decisions and begin with the end in mind.

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