HR Management: 10 Steps to Managing a Successful Organisational Restructure
How to keep a cool head during an organisational upheaval
Business change is inevitable. In fact, it has been rather ironically described as the one constant for organisations. Whether you’re a growing startup or an established company, you will require an organisational restructure sometime down the road. The good news is that change can bring a lot of benefits and spur success in the long-run. You just need to be aware of the possible pitfalls and have a carefully thought-out plan of action to ensure your transition is as smooth as possible.
Whether you are about to undergo a restructure or you’re simply curious, here’s our tried-and-tested, ten-step guide to getting an organisational restructure right. A combination of our HR administration services and your desire for productive change will help you reap the rewards of a successful organisational restructure while ensuring it’s still business as usual at all levels.
1. Appoint a project leadership team
All major changes in an organisational restructure require strong project leadership. The members of the team should be senior and powerful in terms of status, reputation and expertise, with some existing project management experience. They need to be given dedicated time in order to lead the restructure. This significant undertaking should not just be added onto their everyday responsibilities.
2. Define and communicate the vision for success
The project team and the senior leaders in the organisation need to clearly define the end goal. Don’t be tempted to dive into detailed planning without first considering the reasons behind the restructure. Target percentages for cost cuts may appear to speak for themselves, but they do not constitute a vision. Without a guiding vision, the restructure may dissolve into a number of confusing, incompatible and time-consuming projects.
Communicating the vision gives people context for the change and helps them to come to terms with it. Communication at every stage is the key. In the absence of information, people will fill the vacuum with rumours and speculation.
3. Communicate ‘why’ as well as ‘what’
People need to understand why the restructuring is taking place, as well as the process you plan to follow. Help them to visualise the future, not just the here and now. If your timelines slip, or the restructure is hijacked by external forces such as regulatory authorities, changes in government policy or public relations issues, keep communicating. In the absence of any information, people will assume the worst. You may lose good people, as they would rather jump than wait to be pushed. Even if there is bad news, it is better for you to be in control of how it is communicated.
4. Give managers the support and skills to succeed
Communication happens through words and deeds. Managers will often inadvertently undermine the corporate message through their own actions or behaviour. Managers facing uncertainty about their own futures may find it difficult to offer their teams support.
Support managers with briefing notes, coaching and training so they can reinforce the formal messages, rather than contradict them. At all times, remember the importance of transparency to a healthy workplace.
5. Consult and engage your employees
Whether your organisation is unionised or not, you should consult with your employees throughout an organisational restructure. There are legal obligations for collective and individual consultation, depending on the size and scale of your proposed restructure.
Genuine, open consultation often leads to creative solutions and builds an atmosphere of trust and collaboration. Provide training to employee representatives to establish the boundaries around consultation and negotiation. This will help them understand their roles and improve their communication with their constituents, which will raise the level of employee engagement.
6. Shape the future culture
The culture of an organisation is shaped by the behaviours that are tolerated, celebrated and rewarded. Your performance management system, competencies, career progression and reward policies should all be supporting the culture you are aspiring to create.
A restructure may move people around and reduce the number of employees, but the organisation will not fundamentally change unless the behaviours of the people within it change. If your restructure is driven by a need to be more customer-focused, more responsive or more efficient, you must give people a reason to behave differently.
7. Tackle the difficult decisions
In any organisational restructure, there will be obstacles to success. These include politics around senior or long-serving employees, existing agreements with trades unions and expensive compensation precedents set during previous restructures.
If the leadership team does not address these obstacles courageously, middle managers and employees will become disillusioned and cynical, which will slow down the whole process. The survivors of the restructure will then have to be re-engaged and motivated before the new organisational structure can start to be effective.
8. Keep the right people
Focus on keeping the right people, as much as cutting costs. Give careful consideration to selecting people to stay in your organisation, with a forward-thinking focus, instead of a focus on past success.
Use assessment centres, competency-based interviews or other validated tools and decide who you want to stay, rather than who you would like to leave. How you treat the people who are staying will be critical in getting the organisation back on track following a major restructure.
9. Don’t let your attention waver
The physical restructuring — appointing people into new roles and effecting redundancies — is just the beginning. Once this has been achieved, energy levels for the project can flag and people revert to business as usual. The restructure is not successful until it starts delivering the benefits which prompted it in the first place. This can take time. Assign specific responsibility for managing change and culture within the project team and make it part of the project plan.
10. Celebrate success when it happens
If the restructure goes on over a prolonged period, it is important to acknowledge milestones and celebrate success along the way. Savings achieved, people successfully placed in new jobs, customer satisfaction ratings climbing, efficiencies achieved; all of these things can be celebrated. It will remind people why the restructure was necessary. There is unlikely to be one day when everyone wakes up and sees that the restructure is complete, so don’t wait to celebrate. Seize each opportunity as it comes.
Remember: if the vision and goals are clearly identified, you are much more likely to achieve them. With clarity and dedication, the new structure will be up and running more quickly, saving costs, improving efficiency and delivering better service. The organisation will have retained the right people for the future. The risk of expensive, time-consuming employment tribunals will be significantly reduced. All in all, you’ll be left with a happier, healthier and more promising business.