Many organizations determine that they need to reduce their workforce or restructure the organization as a whole. This can be caused by many different things such as the closing of a location, a reduction in income, the rise in costs or many other reasons. This restructuring is the single biggest cause of misalignment in an organization.
Restructuring- What to Consider
If a organization is struggling, or the management simply thinks it could operate better, a restructuring or reduction might be necessary. There are many things that go into making such an operation work.
1. Design- First, the organization needs to make a plan for restructuring and reduction that is appropriate for dealing with the certain problem or challenge. This could even include an opportunity for the organization to grow.
2. Execution- The restructuring process will need to be handled in a certain manner in order for it to be successful. There are many barriers that will prevent it from working and managers need to figure out ways to overcome the obstacles in order to create as much value as possible.
3. Marketing- At some point, the restructuring will need to be explained to employees, investors, customers, and the public in general. The organization will need to market the changes correctly in order to have them supported and accepted.
If any of these challenges are not met successfully, the restructuring and reduction process may very well fail in its ultimate goal. Restructuring will likely be more successful when the managers in charge understand the business strategies and problems that the organization faces. Managers that are just told what to do may follow orders, but that may not be completely what the organization needs.
When to Restructure or Reduce?
It is also essential for a organization to recognize the signs that call for a restructuring or reduction. Many organizations try to restructure too late when there are fewer options and saving the organization is much more difficult. There need to be constant questions regarding the status quo and the way the organization currently runs its business. There should also be questions asked about alternative ways of doing business so the organization can prepare quickly if changes need to be made.
When it comes to any restructuring or reduction plans, the details are the most important aspects. The decisions the managers make have to be implemented in certain ways for everything to work out according to plan. There are many challenges to making it all work out correctly and those challenges often arise in the little details. Small details can blow up into big problems during a restructuring or reduction plan.
No matter what your business is currently facing in terms of obstacles, viable solutions are available. Whether reducing the size or structure of your business, or undergoing a complete restructuring, you can get your business back on track through hard work and focus.
Focus is important, what does your organization focus on? Is it the dollar value saved by reduction in the workforce or the productivity gains through alignment of the workforce? Is your organization aligning its workforce to achieve improved productivity or is it decreasing the workforce to correlate with the decrease in demand?
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David G. Peterson is a business consultant and author of Handling the Remedy. He has extensive international experience managing projects and operations for large financial institutions. He has worked in North America, Europe, Middle East and Asia skillfully managing business and technical requirements, core systems enhancement and support, merger and acquisition integration's, business process reengineering, off-shoring and outsourcing.