Organizational Restructuring Process

Organizational Restructuring Process

What is organizational restructuring?

What is organizational restructuring?

A business model, organizational structure, or operational procedures change as part of an organizational reorganization. The restructuring may involve rearranging the firm hierarchy, making changes to the personnel, or implementing new procedures. A restructuring campaign’s scope may vary depending on variables like the introduction of a new product or satisfying customer demands. 

Large-scale layoffs can be required, for instance, if lowering operational expenses makes restructuring unavoidable. When management determines that a specific aspect of the business needs to change, organizational restructuring may take place. Such changes, if properly implemented, could boost the company’s performance in one or more areas.

How do you successfully restructure an organization?

Restructuring frequently involves the following groups in many organizations:

  • Management: Management frequently works to maintain the organization’s viability and functionality. The executive board, which frequently serves as the management’s representative, may also assess the restructuring process’s actions and offer assistance to make it successful.
  • Employees: While a business might not directly involve employees in a reorganization, if it does so early on with knowledge, it can help lessen opposition and boost success.
  • HR staff: HR staff frequently draws up plans to direct restructuring and inform staff of changes.
  • Stakeholders: Depending on the size of the organization and the scope of the restructuring, stakeholder or investor involvement may vary. They are frequently considered when making decisions that could have a big impact on operations by large organizations with strong investors.

Steps to consider:

1. Select the project leadership group

Strong project leadership is necessary for all significant changes in an organizational restructure. The team’s members should have some prior project management experience and be senior and powerful in terms of rank, reputation, and knowledge. To lead the restructuring, they must be given devoted time. This important task shouldn’t be simply added to their regular obligations.

2. Describe and convey the desired outcome

The end aim must be distinctly defined by the project team and the senior management of the organization. Avoid the temptation to begin detailed planning without first taking into account the grounds for the restructuring. Cost-cutting target percentages may seem to speak for themselves, but they do not make up a vision. The reorganization may disintegrate into a multitude of challenging, incompatible, and time-consuming tasks without a guiding vision.

People can better understand the shift and cope with it when the vision is communicated. The key is communication at every stage. People will fill the void left by a lack of information with rumors and guesswork.

3. Explain “why” in addition to “what.”

People need to be aware of the rationale behind the restructuring as well as the steps they intend to take. Encourage them to think about more than simply the present and future. Keep communicating even if your timetables alter or the restructuring is derailed by outside factors like regulatory agencies, shifts in government regulations, or problems with public relations. Without any facts, people will automatically assume the worst. You risk losing good people because they prefer to jump while waiting to be pushed. You should be in charge of how the news is presented, even if it is bad news.

4. Give managers the tools and resources they need to succeed

Words and actions are both forms of communication. Managers frequently unintentionally damage the business message with their behavior or behaviors. It may be challenging for managers to assist their teams when they are apprehensive about their prospects.

Support managers with briefing materials, mentoring, and training so they can amplify rather than undermine the official statements. Always keep in mind how crucial transparency is to a productive workplace.

5. Talk with and involve your staff

Whether your company is unionized or not, you should always discuss your staff before restructuring your operations. Depending on the scope and complexity of your proposed restructuring, there are legal requirements for both group and individual consultation.

Genuine, unrestricted discussion fosters an environment of trust and cooperation and frequently results in innovative ideas. Employee representatives should receive training to clarify the limits of bargaining and consultation. They will be better able to communicate with their constituents and gain a better understanding of their duties as a result, which will increase employee engagement.

6. Create the culture of tomorrow

Create the culture of tomorrow

The behaviors that are accepted, praised, and rewarded define the culture of an organization. Your competency-based performance management system, career advancement opportunities, and reward policies should all promote the culture you want to build.

People may be relocated, and the number of employees may be decreased, but until the behaviors of the individuals who make up the organization alter, it will not fundamentally change. You must provide people a cause to behave differently if your restructuring is motivated by the need to be more client-focused, responsive, or effective.

7. Make challenging choices

The success of any organizational redesign will be hampered by impediments. These include the politics around senior or long-serving personnel, trade union contracts already in place, and exorbitant remuneration precedents established during prior restructurings.

Middle managers and staff will grow jaded and pessimistic if the leadership team does not bravely confront these challenges, which will slow down the entire process. Before the new organizational structure can begin to be effective, the survivors of the restructuring will need to be re-engaged and motivated.

8. Maintain the proper personnel

Prioritize retaining the right employees over cost-cutting. Consider carefully who you want to keep working for your company, keeping in mind future goals rather than past achievements.

Instead of focusing on who you wish to leave, use assessment centers, competency-based interviews, or other validated approaches to determine who should stay. 

9. Don’t let your focus wander

The physical restructure, which includes creating redundancies and assigning individuals to new positions, is just the start. Once this has been accomplished, enthusiasm for the initiative may wane and people may resume their regular activities. Before the benefits that motivated the restructuring in the first place begin to materialize, the restructuring is not successful. It might take some time. Give the project team specific accountability for managing culture change and assigning responsibilities for it in the project plan.

10. Celebrate when success occurs

If the restructuring takes a while, it’s critical to recognize progress along the way and rejoice in wins. We can rejoice at the money saved, the people successfully put in new employment, the rising customer satisfaction scores, and the increased efficiency. It will serve as a reminder of the restructure’s justification. Don’t wait to celebrate since it’s improbable that there will be a day when everyone wakes up and realizes that the reorganization is over. Seize every chance when it presents itself.

Keep in mind that you are much more likely to succeed if your vision and goals are well defined. With focus and determination, the new structure will be operational more rapidly, resulting in cost savings, increased productivity, and improved service. The organization will have kept the best employees on board for the long term. There will be far less chance of costly, time-consuming employment tribunals.

How do you successfully restructure a team?

How do you successfully restructure a team?

1. Recognizing your present personnel

Sometimes, restructuring can be difficult for a staff. Unexpected layoffs are never pleasant, and the negativity may reduce the remaining employees’ contentment with their jobs. For this reason, you must exercise caution if you want to manage your personnel effectively.

You must first get your strategy perfect before determining which staff to keep and which to fire. Your staff may be given new responsibilities and tasks as a result of a restructuring. You must therefore base your choice on the new employment roles.

Knowing which of your staff might do well in new jobs is now essential. It entails comprehending their aptitude and temperament for the position. You can use an employee personality test to look at each person’s personality characteristics.

You can visit with the staff and look over their performance reviews to better grasp the skills. The point is to exercise extreme caution when choosing to hire or fire any employees.

2. Organizational structure

An organizational structure outlines the duties, responsibilities, and job tasks of each employee. To have a clear knowledge of everyone’s work, it is crucial to establish a clear organization.

To know exactly which staff you want before the reorganization process begins, this framework must be established. Consider the scenario where you are reorganizing to become a small company with a focus on customized materials. Here, a small number of skilled people are needed rather than a sizable workforce for mass production.

Understanding the organizational structure after the reorganization and making plans accordingly are crucial in this regard.

3. Jobs redesigning

The roles and duties must be redesigned in accordance with the new strategy after the org chart has been thoroughly constructed. To comprehend the similarities and differences between the new and old work roles, you can also compare them.

Jobs redesigning

Knowing this can help you determine whether employees are the greatest matches for the position. In some circumstances, new positions might also open up. Instead of hiring new workers, you might think about investing in employee training and development to update the workforce. However, if you believe that the situation does not permit for the same, you might opt for new hires.

4. Downsizing and Redeployment

After making the aforementioned decisions, you must decide who must continue on staff and who must leave. You must use caution when making this choice since widespread layoffs will create a tumultuous situation.

But most significantly, for the restructure to be successful, you must choose wisely. When making a decision, be firm and unbiased, and act appropriately.

5. Techniques for the new workforce

Effective workplace communication is the last step after agreeing on the organizational structure, job responsibilities, and workforce. Restructuring is a difficult process, especially for the employees.

As a result, you need to explain some important information to the current workforce. These are the reasons they are with you, what you expect of them, and the proper way to complete tasks. You could present the new strategies at a seminar on the new direction your business is taking. These were some of the fundamentals that you needed to comprehend before choosing to undergo organizational restructuring.

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