Strategy & LeadershipBusiness TransformationDoes your organisation really need a major restructuring?

Does your organisation really need a major restructuring?

For global businesses, 2016/17 has been a period of turbulence. Amid substantial global uncertainty – speculation around the impact of Brexit, the recent US presidential election and heightened trade regulations in some countries, many businesses are facing poor organic growth prospects and considering a major restructuring. But is major restructuring the right move?

Although organisations must constantly change with the time to survive, often times a major change is not necessary. Focusing only on a particular area of the business or flexing the existing model can be sufficient.

The 2017 HRD Summit Europe brought about a fascinating round table on the topic ‘do you really need to restructure?’ Participants from a wide range of industries shared their views and business stories around restructuring.

What kinds of challenges really require a major restructuring?

The kinds of challenges that were brought up in the round table varied: a luxury goods maker is under pressure to accelerate its business from a seasonal cycle of activity to a monthly pulse, affecting everyone from design to supply chain to marketing, and even to HR and Finance; a national broadcaster is planning to digitise its entire business from advertising through to back office systems. From this discussion, we agreed on four main conditions that make up a strong case for a major restructuring:

  1. Fundamental change in the value chain
  2. Fundamental changes in roles and the activities per role
  3. Switch from modes of organising: e.g. from geographical to functional or client segment
  4. And when organisational needs are blocked by human inability to change: location, skills, ways of working, or to achieve the sheer speed required

What kinds of challenges can be handled without a major restructuring?

Since major restructuring is messy, hard and disruptive, unless the case for it is overwhelming, focus only on redesigning a particular area of the business. Below are types of challenges that could be handled without major restructuring; businesses could cope by flexing within their existing structure:

  1. When the issue is failure to deliver against existing roles and specifications, rather than a need to change the roles and specifications
  2. When changes in scale alone are required
  3. When no fundamental change in the business model is needed

When have you seen a restructuring deliver value (and why did it work)?

Below are some interesting examples of when restructuring has delivered value to the organisation:

  1. Aviva*: 12,000 integrated headcount reshaped to 9,000 on time, and on budget
  2. Shell-BG: delivered integration synergies up to $4.5bn vs expected $3.5bn per year
  3. Hospitals in Atul Gawande’s Checklist Manifesto: clear metric in patient mortality

What are your top tips for success when undertaking a major restructuring project?

Major restructuring is risky with many hidden traps along the journey. Examples include strong personalities and ego, budget constraints, and lack of alignment which can lead to restructuring around individuals, restructuring the top level to assert executive power, and ‘rightsizing’ the workforce in an unfair manner. Below are some tips for success to consider during both design and delivery phases.

In the design phase, it’s crucial to establish:

  1. Clarity on overall purpose
  2. Clear design criteria
  3. Aligned metrics for success
  4. Clear case for change

And then in the delivery, identify who will do what, where, when and the cost and headcount impact. For example, what are the benefits of getting clear responsibilities?  What is the benefit of delivering one month faster? This means you will need:

  1. Good data management to track progress
  2. A solid plan to deliver the implementation, not just the design (‘Make it Real’)
  3. Ways to measure and track impact

Finally, I want to reinforce that major restructuring is a tough journey. Organisations need a clear case for change to make it worthwhile. If not, it’s better to consider the improvements you can make within your existing structures, such as by working to achieve clarity on headcount, costs, responsibilities and deliverables.

These topics are all covered in depth in my colleague Rupert Morrison’s book ‘Data-driven Organization Design’.

What's Hot

HRD Roundtable Report: Levelling Up Onboarding for the Hybrid World

Roundtable Report HRD Roundtable Report: Levelling Up Onboarding for the Hybrid World 5 May 2022

9m

HRD Roundtable Report: Levelling Up Onboarding for...

Attracting new talent is shooting up the priority list, but also proving more difficult than ever. A...

View event
HRD Roundtable Report: Redefining Company Culture in Hybrid Work Environments

Roundtable Report HRD Roundtable Report: Redefining Company Culture in Hybrid Work Environments 26 May 2022

9m

HRD Roundtable Report: Redefining Company Culture ...

The process of redefining a company culture is a complex one. Culture contributes directly to the da...

View event
Learning to win the talent war: how digital marketing can develop its people

Whitepaper | Talent Development Learning to win the talent war: how digital marketing can develop its people

9m

Learning to win the talent war: how digital market...

This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. I...

View resource
HRD Roundtable Report: Strategies For Re-Engaging The Hybrid Workforce

Roundtable Report HRD Roundtable Report: Strategies For Re-Engaging The Hybrid Workforce 5 May 2022

9m

HRD Roundtable Report: Strategies For Re-Engaging ...

We know hybrid working is here to stay, forcing many organisations to experiment with innovative and...

View event
HRD Roundtable Report: Making it ‘Worth It’ – What We Need to Reward, Engage and Retain

Roundtable Report HRD Roundtable Report: Making it ‘Worth It’ – What We Need to Reward, Engage and Retain 3 March 2022

9m

HRD Roundtable Report: Making it ‘Worth It’ – What...

We know the pandemic has caused many people to revaluate their careers and relationships with work a...

View event
Dave Ulrich: How can business and HR leaders simplify complexity?

Leadership Development Dave Ulrich: How can business and HR leaders simplify complexity?

1y Dave Ulrich

Dave Ulrich: How can business and HR leaders simpl...

HR thought leader Dave Ulrich outlines ways leaders can deal with complexity in an increasingly busy...

View article
HRD Roundtable Report: Using HR Data to Inform Organisational Decision Making

Roundtable Report HRD Roundtable Report: Using HR Data to Inform Organisational Decision Making 5 May 2022

9m

HRD Roundtable Report: Using HR Data to Inform Org...

Historically, HR hasn’t been as effective as it could be in sharing and communicating data with wide...

View event
Digital transformation investment grows but critical skills gaps remain - Coursera report

Digital HR Digital transformation investment grows but critical skills gaps remain - Coursera report

1y Leah Belsky

Digital transformation investment grows but critic...

Covid-19 has accelerated the rate of digital learning on a global scale. Coursera's latest report pr...

View article
Wellbeing in the hybrid workplace: how to successfully drive engagement

Employee Engagement Wellbeing in the hybrid workplace: how to successfully drive engagement

1y Alara Basul | Sponsored

Wellbeing in the hybrid workplace: how to successf...

Remote working has impacted the way we communicate as a workforce, but striking the right balance be...

View article
How to create a company culture capable of empowering the modern workforce

Culture How to create a company culture capable of empowering the modern workforce

1y Alara Basul | Sponsored

How to create a company culture capable of empower...

While new working patterns that emerged from the pandemic have earned a permanent spot in the w...

View article
WATCH: Connection and collaboration in a hybrid workplace

Leadership Learnings WATCH: Connection and collaboration in a hybrid workplace

1y Amy Kirkham

WATCH: Connection and collaboration in a hybrid wo...

Alison Noon-Jones, VP of People & Culture at Leidos UK & Europe, shares how crucial employee engagem...

View article
Turbulence ahead: Why it’s time to be bold in your leadership

Leadership Development Turbulence ahead: Why it’s time to be bold in your leadership

1y Terence Mauri

Turbulence ahead: Why it’s time to be bold in your...

HRD thought leader and Hack Future Lab founder Terence Mauri sets out why the biggest risk to leader...

View article

Download ‘The Data Goldmine’ free chapter
For more related blogs and articles, click here


Author Giles Slinger is a Project Management Director at Concentra, with responsibility for OrgVue package. He is also a former economic researcher and management consultant. 

 

Comments are closed.

What's Hot

HRD Roundtable Report: Levelling Up Onboarding for the Hybrid World

Roundtable Report HRD Roundtable Report: Levelling Up Onboarding for the Hybrid World 5 May 2022

9m

HRD Roundtable Report: Levelling Up Onboarding for...

Attracting new talent is shooting up the priority list, but also proving more difficult than ever. A...

View event
HRD Roundtable Report: Redefining Company Culture in Hybrid Work Environments

Roundtable Report HRD Roundtable Report: Redefining Company Culture in Hybrid Work Environments 26 May 2022

9m

HRD Roundtable Report: Redefining Company Culture ...

The process of redefining a company culture is a complex one. Culture contributes directly to the da...

View event
Learning to win the talent war: how digital marketing can develop its people

Whitepaper | Talent Development Learning to win the talent war: how digital marketing can develop its people

9m

Learning to win the talent war: how digital market...

This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. I...

View resource
HRD Roundtable Report: Strategies For Re-Engaging The Hybrid Workforce

Roundtable Report HRD Roundtable Report: Strategies For Re-Engaging The Hybrid Workforce 5 May 2022

9m

HRD Roundtable Report: Strategies For Re-Engaging ...

We know hybrid working is here to stay, forcing many organisations to experiment with innovative and...

View event
HRD Roundtable Report: Making it ‘Worth It’ – What We Need to Reward, Engage and Retain

Roundtable Report HRD Roundtable Report: Making it ‘Worth It’ – What We Need to Reward, Engage and Retain 3 March 2022

9m

HRD Roundtable Report: Making it ‘Worth It’ – What...

We know the pandemic has caused many people to revaluate their careers and relationships with work a...

View event
Dave Ulrich: How can business and HR leaders simplify complexity?

Leadership Development Dave Ulrich: How can business and HR leaders simplify complexity?

1y Dave Ulrich

Dave Ulrich: How can business and HR leaders simpl...

HR thought leader Dave Ulrich outlines ways leaders can deal with complexity in an increasingly busy...

View article
HRD Roundtable Report: Using HR Data to Inform Organisational Decision Making

Roundtable Report HRD Roundtable Report: Using HR Data to Inform Organisational Decision Making 5 May 2022

9m

HRD Roundtable Report: Using HR Data to Inform Org...

Historically, HR hasn’t been as effective as it could be in sharing and communicating data with wide...

View event
Digital transformation investment grows but critical skills gaps remain - Coursera report

Digital HR Digital transformation investment grows but critical skills gaps remain - Coursera report

1y Leah Belsky

Digital transformation investment grows but critic...

Covid-19 has accelerated the rate of digital learning on a global scale. Coursera's latest report pr...

View article