Does your organisation really need a major restructuring?
Register for free to become a member and enjoy access to all HRD content.
Register below, or sign-in if already a member
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.
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:
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:
Below are some interesting examples of when restructuring has delivered value to the organisation:
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:
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:
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’.
Attracting new talent is shooting up the priority list, but also proving more difficult than ever. A...View event
The process of redefining a company culture is a complex one. Culture contributes directly to the da...View event
This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. I...View resource
We know hybrid working is here to stay, forcing many organisations to experiment with innovative and...View event
We know the pandemic has caused many people to revaluate their careers and relationships with work a...View event
HR thought leader Dave Ulrich outlines ways leaders can deal with complexity in an increasingly busy...View article
Historically, HR hasn’t been as effective as it could be in sharing and communicating data with wide...View event
Covid-19 has accelerated the rate of digital learning on a global scale. Coursera's latest report pr...View article
Remote working has impacted the way we communicate as a workforce, but striking the right balance be...View article
While new working patterns that emerged from the pandemic have earned a permanent spot in the w...View article
Alison Noon-Jones, VP of People & Culture at Leidos UK & Europe, shares how crucial employee engagem...View article
HRD thought leader and Hack Future Lab founder Terence Mauri sets out why the biggest risk to leader...View article
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.