How to Carry Out Successful Organizational Restructuring

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Organizational Restructuring is a business constant. Successful Organizational Restructuring is key for a company’s survival. Poorly executed restructuring efforts may not bring about the desired objectives and in fact may escalate problems. In fact, restructuring is a delicate and time-consuming process which involves careful analysis and calculation to minimize costs.

Restructuring Considerations

Organizations should consider several issues before implementing the plan. One important factor is how the company values workers. Does it have a narrow and shortsighted approach where employees are a cost to be cut? Can they evaluate if a downsizing plan, will generate profitable changes? Or, does the organization value the inherit potential of its’ people resource? Will it look for ways to retain and develop a particular asset, even redeploying or retraining individuals, as part of the reorganization?

So how does an organization go successful about a restructuring program?

Successful Restructuring

Organizational restructuring, if carried out in a phased manner, can be bring the desired results, especially when backed by a sound business strategy, supported by a solid communication strategy and with an understanding of the costs integral to the process.

Here’s a look at some of the steps in a successful restructuring plan:

  • It is vital to assess what factors, whether internal or external, are pushing / demanding change in the business;
  • There has to be acceptance and commitment in the organization about change requirements and support of efforts in developing a new strategy to deal with them.
  • It is very important to visualize the impact of the new strategy
    • with no change in the existing structure, and
    • with the organization in the new structure.

This will help identify gaps which need to be looked at.

  • The strategy should be fine tuned to fit the goals and objectives of the organization.

Other aspects to consider:

  • Reduction of Complexity. A complex process or role involves greater costs and can unduly affect performance. Simple is preferred where work design, roles and reporting structure is concerned.
  • Roles in an organization must be aligned to effectively support the changes in business while maintaining a balance with core activity of the role. Deviating too much from the core, too many additions or deletions of significant responsibilities and so on may defeat the purpose.
  • Role restructuring should be carried out because of a business reason. Care must be taken not to overload a manager or leave his role not too light: on the one hand, he may not be able to give his best and on the other, he may be underutilized.
  • It is absolutely critical to determine performance metrics for the restructuring effort. Indicators must be tapped to measure changes and determine how successful the effort is at achieving the desired outcome.
  • Clear communication about lines of authority, reporting structures, roles, accountability and so on must be clarified at the outset of the restructuring effort. Lack of clarity and the subsequent confusion can critically delay decision making and adversely impact the results.

Lastly, maintaining a certain degree of flexibility is vital, as changes in business will always keep happening. Revisions in the strategy will occur over time and resource allocations will change as the business grows or changes direction.

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