Organization Restructuring – Difference Between Success and Failure

Getting Your Organization’s Restructure Right

It would be fair to say that every organization in the world has gone through some kind of reorganization of varying magnitude in recent months.

The first part of any company reorganization is to determine the reason for the restructuring and direction the company is embarking which will enable the reorganization process to be developed based on its goals and criteria and its success to be measured. With the strategy in mind, consider where the current organizational structure is failing to meet the company’s goals and which parts of the organization are working well.

Business leaders set the tone for how well a restructuring will be received and executed. Company restructuring should be viewed as a fresh start as it can revitalize an organization and reinvigorate new and existing employees. Effective Planning, execution, communication and support are the main four factors which will determine whether your reorganization is a success or failure.

Look at your business model to create a goal-oriented and agile workforce which empowers managers and employees allowing the business to be propelled forward. Delegating day-to-day decision making to employees allows leadership to focus on the strategy and high-level decisions.

The Role of HR in a Restructure

HR plays a critical role in any organizational restructure as one of their main responsibilities during a restructure is to manage the workforce. The way in which a company’s workforce is handled during a restructure can ultimately result in the success or failure of the company.

HR leadership and its team must have strong project management skills with a focus on managing change and culture.

HR should develop the restructuring strategy and work effectively with the leadership team to transform the workforce to enable and successfully execute the restructuring.

12 Step Guide to Successfully Restructure Your Organization

#1 Guiding vision – by clearly identifying the vision and goals, as well as the process you plan to implement and follow and effectively communicating these, the workforce will understand the context for the change, why the restructuring is taking place and help them to come to terms with it. You are more likely to have a successful reorganization with the right people as the new structure will be effective more quickly resulting in cost savings, improved business performance and delivering better service.

#2 Stakeholder communication – restructuring will undoubtedly be an anxious time for everyone in the organization and it is important to ensure that there is frequent accurate information that is shared with within the organization and external parties to avoid rumours and “Chinese whispers”.

HR should develop a communication strategy to outline the purpose of the restructure, timeframe, job implications, policies related to redundancy and HR initiatives to support the management and workforce during the process. There should also be town hall and department meetings with Q&A sessions to ensure that all queries are addressed.

Create an open and consultative environment with clear communication and transparency at every stage focusing on the future to build an atmosphere of trust and collaboration.

#3 Management support – provide managers with the support they need to avoid them inadvertently undermining the corporate message through their own actions and interpretation especially if they are uncertain about their own future. A manager who does not feel support will find it difficult to support others.

#4 Clear the obstacles – there will inevitably be obstacles during the journey such as resistance, cynicism, politics and a decline in employee engagement and motivation. Addressing these obstacles head on will slow down the progress, buy-in and acceptance. Those that remain with the organization will need to be motivated and re-engaged to get the new structure to be effective.

#5 Managing workforce productivity – the business needs to continue to perform at tis optimal level and during this time HR should be working with management to manage employee productivity. During restructures, it is not uncommon for employees to feel insecure, less motivated and lose focus on their work as they are fearful of being made redundant.

#6 Clean data – the organization will rely on accurate, real-time data to make informed decisions about how best to successfully restructure the company.

#7 Revised organization structures and job descriptions – department structures, job descriptions and talent selection are the most critical elements in implementing a new organizational structure. HR must assess the tasks and workflows required to effectively run and manage the business against the existing jobs and processes. Roles will be removed, created, changed or stay the same.

HR should have the new job descriptions available for discussions with potential employees that are being considered for retention. This should also include promotions, lateral moves and transfers.

#8 Retaining key employees and skills – at the risk of being redundant, high performing and experienced management and employees are at high risk of leaving when they find alternative employment. HR should develop employee retention strategies to retain the most critical skills within the organization.

#9 Redeployment – HR should carry out a workforce assessment to evaluate skills, knowledge and experience and use aptitude and technical tests and competency-based interviews to assess future capabilities to predict how likely an employee is to succeed in a role that they do not currently have relevant skills for. Employees must be thoroughly trained for new or changed roles.

#10 Honoring contractual terms – to avoid the risk of time-consuming and expensive employment tribunals, demotivating the workforce and developing a negative reputation, HR plays a key role in ensuring that all employment terms and conditions are upheld and exiting and remaining employees receive accurate information about their severance and revised employment terms.

#11 Shape the future culture – implement competencies, performance management systems, reward and career development policies that will support the organization’s culture for the future. A reorganization can only work if people’s behaviours change.

#12 Celebrate success – restructures can be emotionally draining and it is important to acknowledge and celebrate the successes when they achieved. It validates the reason why the restructure was an important and wise decision.

When selecting employees to retain, consider them with a forward-thing mindset rather than a focus on their past success. What worked in the past may not work in the new model.

Whether your organization is restructuring to stay relevant, become consumer centric, low business performance or current market conditions, a restructure is only successful when it starts achieving the goals and delivering the benefits of the reorganization and this can take time.

The involvement and influence of the HR leadership and department will have a lasting impact on the success of the new organizational structure.

Change can bring many new opportunities and kickstart or accelerate long-term success. Your business will be healthier and happier with a more optimistic outlook for business growth and success.

Feeling overwhelmed and need help with restricting your business?

Plum Jobs works with businesses of varying sizes helping them through every stage of their reorganization. If you would like to know how we have helped other businesses or would like to discuss how we can help you, please Contact us or call +971 552 167567 for a confidential initial discussion.