What mistakes are you making in your restructuring strategy?

Change Management: Dealing with resistance is an essential part of restructuring that often involves change management principles, including making change more palatable for employees and stakeholders. Companies often employ change management experts just to handle this aspect. Role of Capital Allocation: Often, restructuring is not just about reallocating human resources but also involves smart capital allocation. Businesses may pull money from low-performing units to invest in areas with high growth potential, a strategy often seen in venture capital.

Agile Methodology: Having an Agile methodology encourages flexibility and rapid iteration. Adopting such a mindset can be beneficial in restructuring. Scenario Planning involves creating different models to predict future circumstances and preparing a company for potential outcomes and challenges. Crisis Management: In restructuring, unforeseen challenges are inevitable. Having a crisis management plan in place can be a lifesaver. The Role of Leadership: Effective leaders know how to adapt their strategy to changing circumstances, which can be especially critical during restructuring. They are not too ego-invested to change a failing plan.

Management teams are experts in project management and implementing large technical changes. When setting up restructuring or cultural-change initiatives, most managers base their strategies and methodology on principles of project management. In restructuring and cultural-change initiatives, there should be equal emphasis on the technical and human sides of the change. It is the lack of planning for the human aspects that causes most failures. On top of the technical strategy and project plan, the change strategy needs to incorporate strategies to manage energy, overcome resistance, remove inhibitors, develop leaders, evolve the culture, and manage the change. This is best achieved with the support of experts in these domains.

Psychological Safety: Employees are more likely to embrace change if they feel safe in their environment. This goes beyond job security and delves into a culture of openness and mutual respect. Role of Middle Management: Middle managers are crucial in effectively communicating and implementing change. Measure and Adapt: Using key performance indicators (KPIs) can help measure the effectiveness of the change management plan and allow for timely adjustments. Transparency: Honest and clear communication can mitigate rumours and unease among employees.

Cultural Assessment: Before restructuring, assessing the existing culture is valuable to identify what can be kept and what needs to evolve. Change Champions: Identify individuals within the organization who can act as change leaders to help their peers navigate the restructuring. Quick Wins: A series of small, quick wins can help maintain momentum and keep morale up during the complex integration process. Custom Solutions: Sometimes, a "cookie-cutter" approach won't work, and a tailored solution is needed for different departments or teams.

Baseline Metrics: Before making changes, having an idea of how things are going can help you measure the impact later. Feedback Loops: Continuous feedback from employees and stakeholders can be as valuable as hard metrics. Iterative Approach: Think of restructuring as an iterative cycle where you implement, evaluate, adjust, and re-implement. Communicate, Don't Just Measure: Robust internal communications should complement a data-driven approach.

Uh oh, looks like my restructuring plan has some holes! Here's what might be tripping me up: 1. Blind Spots: Did I miss crucial details about the company's core strengths or the market shift they're facing? 2. Communication Cliff: Am I clearly explaining the "why" behind the changes? Vague explanations breed fear and resistance. 3. People Puzzle: Did I prioritize cost-cutting over employee well-being? A demoralized team can sink the whole ship. 4. Future Fog: Did I plan for the long haul? Restructuring isn't a one-time fix, it's a path to sustainable success. 5. Feedback Famine: Am I listening to diverse perspectives? New ideas can come from anywhere, even from those most impacted. Gotta address these before this plan crumbles!

Restructuring initiatives generate strong emotions that dominate the working environment. If not handled correctly, they can cause significant damage to the credibility of top leaders, the company’s reputation, employee engagement, and the organization’s performance. While top leaders are finalizing the restructuring plans, the destructive emotional energy strengthens over the months and is turbocharged when the restructuring is communicated, and people are asked to leave. When rebuilding a restructured organization, we add an extra step in our Pulscipline? Change System to resolve this problem. Immediately after the downsizing, we channel the negative energy into positive energy and create a positive environment for change.