Revamp your business
Organizational restructuring is the strategic process of making significant changes to the organizational setup and overall structures, roles and operations. This restructuring can take various forms and may involve changes in management, departments, reporting relationships, processes and even in the organization’s culture.
Organizational restructuring can be a complex and challenging process, involving many uncertainties and leading to high levels of risks such as loss of jobs, lower overall performances, employee resistance, disruptions to daily operations etc.
However, when done successfully, it can help companies become more agile, competitive, and better equipped to face challenges and to achieve their strategic goals.
A clear vision and execution plan are a must to ensure success alongside the workforce commitment and the proper channel of the ressources. After all it’s about the rightsizing more than just the downsizing.
Organizational restructuring can be attained in many ways. It can involve change in organizational hierarchy, reporting structure and chain of commands within the business. It can also imply departmental restructuring through merging or dividing departments, creating new ones or eliminating existing ones to streamline operations and improve coordination. Also, businesses may expand their presence into new regions or consolidate operations in existing ones, leading to a restructuring of their geographic footprint. In some other cases, workforces changes are inevitable and are done by way of downsizing, layoffs, hiring or relocating employees to match the new structure’s requirements. Early retirement packages may also be offered to reduce labor costs or right-size the organization.
The key is to rightsize; not to downsize
Operational cost reduction measures are often utilized throughout consolidating facilities, outsourcing or renegotiating vendor contracts. In certain situations, the business may restructure by non-core assets sales or by divestitures from underperforming business units. On the other hand, incorporating new technologies or upgrading existing systems to integrate new systems or digital tools into the business operations can result in great benefits.
Improvement and optimization of the operational process and workflows is usually valued to increase productivity and efficiency, reduce costs and eliminate bottlenecks. Ressources can be reallocated including personnel, technology and budgets, to ensure they are aligned with the new structure’s strategic priorities. In any case, changing the organizational culture and employees behavior may be necessary to support and sustain the desired changes.
Financial considerations are leveraged through a better understanding of the financial impact of restructuring, including potential cost savings, investments, and the allocation of financial resources.
Strategic realignment and reorientation can be needed to enter new or changing markets, to take advantage of new opportunities or to refocus on core competencies. In parallel, effective communication of the strategy and its expected outcomes and impacts on employees and stakeholders allow more engagement and commitment to the process and thus better results.
