When faced with a challenging economy, most organisations are tempted to downsize, consolidate, or focus on core markets in order to remain competitive and profitable. Despite the prevalence of restructuring across all industries, successful restructuring, that achieves what it sets out to do is rarely achieved. Louise Palmer, director of 7 days discusses the issues organisations should consider to get the maximum benefit from their restructuring efforts.

Focus on the future

When approaching the issue of restructuring, most organisations will begin by drawing an organisational structure chart, with the aim of removing as many boxes or layers as possible. This hasty reaction prevents managers from thinking about the organisations future, which should be the primary focus in any restructuring programme.

To ensure restructuring success, managers need to think about what actually underpins their structure chart, in relation to some of the following issues:

• What are the critical demands of the organisation?




• What are the organisational goals?




• What are the critical processes that drive the business?




• What foundations are necessary to ensure successful restructuring?

Although it’s important to focus on the organisations structure, doing so in isolation can lead to internal ‘turf wars’, where individuals become overly territorial. This can lead to the fracturing of leadership teams who are unable to work together at a time when the organisation needs them most.

Don’t forget to think strategically

It is often restructuring efforts that are driven by cost-saving demands that are least successful because they fail to consider the strategic thinking that underlines the restructuring process. If this is the case, the restructure is likely to be characterised by a lack of creativity and will contribute to an ill-fated cycle of ¡¥strip costs out, put them back in¡¦. What the business actually needs to focus on is simply what work it needs to start and what work it needs to stop to prevent this ¡¥elastic band¡¦ effect.

Businesses should start by assessing the demands and opportunities they will need to respond to in order to perform today and to grow tomorrow. Managers should ask themselves questions such as:

• How will future demands and opportunities differ to today¡¦s environment?




• What opportunities can we take advantage of?




• How will the restructuring changes impact on the critical business processes?




• What work will the organisation need to be doing in a year¡¦s time?




• What does the organisation want to be famous for?

Considering the answers to these questions and identifying the implications on processes, people’s skills and roles will enable managers to identify the right structure.

Involve all employees in strategy development

The organisation¡¦s senior management team is the key factor in the development of a blueprint for restructuring. However, employees lower down the organisation need to be involved in creating the finer detail around these plans in order to turn the restructuring concept into operational reality. The top team won¡¦t have a clear understanding of what happens on the shop floor and as such, there is a danger they may create a great design that is operationally flawed. Bringing together those that do the work with the decision makers during the design process will ensure a more robust outcome to the restructuring.

Engage employees

A crucial element within the restructuring strategy is the need to ensure that employees understand and engage with the business vision and strategy and know exactly what their contribution towards it should be. The process of translating strategy into something meaningful to employees can be challenging, so an engagement framework, that sets out the ¡¥non-negotiables¡¦ within the new organisation will help individuals and departments to grab hold of change.

An engagement framework should include details such as:

• The new organisational structure;




• The behaviours that will and will not be permitted in the new-style organisation;




• The processes that will glue the organisation together;




• The measures the organisation will use to determine whether it is achieving its goals, or not.

The engagement framework should be developed throughout the restructuring process to detail the changes within the organisation. Once a masterversion has been created, each function and individual teams within the functions should adapt the framework to their own practices and ways of working. This will ensure that not only does the organisation achieve employee engagement, but will secure ownership and accountability throughout the business.

Announce the new structure

Once the details of the restructure have been agreed, it is necessary to internally launch the new-look organisation. A series of ‘big and loud events’ would give the CEO and senior management team the opportunity to present the ¡¥new¡¦ organisation and their reasons for restructuring to large groups of employees. An event would also give employees the opportunity to ask senior managers about, for example, the purpose and vision of the organisation.

As the launch of the new structure demonstrates, communication is the key to the success of restructuring projects, whether it¡¦s communicating with employees and stakeholders during the planning stage or communicating with individuals and teams to explain the changes that can be expected. Communication encourages understanding which ultimately contributes to success.