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7 Steps to a Successful Restructure

By / August 22, 2016 / , / 3 Comments

All organisations in our fast-paced world need to be prepared to adapt and reorganise their workforce. Traditional structures become inefficient, stale and counter-productive to business goals. Typically, this drives business leaders to consider restructuring the organisation.

Of course, the restructure process doesn’t have to be performed purely as a reaction to poor organisation-wide performance. A dynamic, industry-leading workforce can be a strong source of competitive advantage, allowing the organisation to quickly capitalise on any key opportunities that arise in industry. Restructures can therefore become a regular process, a way of continuously improving the way the organisation operates and maximising business success.

org_chart_imageSetting Goals

Whatever the cause for the organisation restructure, there’s 7 key steps you’ll need to undertake to manage the delicate process. Before these steps, however, it’s vital that you have a clear goal in mind. What is the real purpose of the restructure?

These goals could be around workforce expenditure, performance goals or a target headcount per department – the point is they must be very specific and measurable to guide the process.

The 7 Steps

 

Setup a Transition Management Team

Someone has to own and execute the restructure. Make sure you’ve worked out who is responsible and be sure to allocate enough resources to meet the timelines required.

Typically, you will want to include:

  • A Decision Maker, who knows the business requirements and can make clear decisions without being held up by too much red tape.
  • A Data Analyst, who can manipulate, validate and import the data using your restructure tools (org.manager, Planning@Work, Excel, etc)
  • An Org Design Expert, who can model the restructure along with all of the reports, communications and action plans required to implement the restructure.

 

Communicate the plan to staff

Many employees will feel at risk during a restructure. It’s better to be open and honest about the process to ensure top talent feels secure and to set clear expectations.

The easiest way to do this is via a structured org chart, as it’s something everyone can understand at a glance. You don’t need to provide too much detail, so it’s important to make sure you restrict sensitive information like salary, contact details, date of birth and home address.

 

Perform a skills assessment

It’s difficult to understand where your workforce strengths and weaknesses lie without having a way to assess employees’ skills. Talk to line managers, build a list of core competences and use this data to guide the restructure.

We typically see organisations doing this within Planning@Work using a 9-box, measuring performance and potential ratings. Whilst it may be a very simple measure, it’s very easy data to capture and it’s also a very good summary for comparing employees with similar job descriptions.

 

Create appropriate severance packages in advance

Voluntary and involuntary turnover are a part of every organisational restructure. Make sure your severance packages are suitable, compliant and fair.

As much as possible, try to be open and honest about what is being offered. Dispelling rumours and managing expectations are hard enough without the added challenge of maintaining a veil of secrecy over the entire organisation.

 

Create talent development programs

When employees are moving around, you need to make sure they receive the right support and training to settle them into their new roles.

Remember that these programs don’t have to start after the restructure takes place. It’s a fantastic best practice to cross-skill multiple employees for a variety of roles so you’ll have options when restructure time comes around. This sort of talent development can help build employee loyalty and increase skill-diversity across the workforce as a whole.

 

Determine a process to assess role suitability

It’s not just skills that should determine whether or not an employee should be moved to a particular role. Watch out for good or poor relationships, existing team dynamics and any personal factors that may affect their suitability for the role.

This is an incredibly difficult aspect to measure, so you’re likely going to rely on anecdotal reports and feedback from line managers for each employee. For larger organisations, it may be easier to run small focus groups with key decision makers in each area to see if they have any objections.

At the end of the day, it’s going to be your job to decide which objections are insurmountable and which are unavoidable, tailoring your restructure plan to create the best outcome possible.

 

Review & Reflect

Chances are you’re going to go through another restructure in the future. If you plan and monitor the process now, you’ll find it easier next time.

We’re big fans of creating clearly documented processes for everything at Navigo. Task a few members of the restructure team with writing down each step you go through and you’ll have a framework to build upon and reference next time.

Who knows – if your restructure was successful enough, we may want you to write your own guide to restructures to share with us!

Due to popular demand, this article has been updated with more detail around the 7 steps to a Successful Restructure, with the addition of more links to additional resources and articles. 

about the author
Peter

Peter is Navigo's founder and Managing Director. Peter is passionate about building and running businesses, finding solutions to business process problems and new trends in HR Technology.