5 Keys to Organizational Restructuring

5 Keys to Organizational Restructuring

Before you can begin to think about the organization structure of your company, you should define your job roles, scope of responsibilities, and employee skills. This is the first step to any restructuring exercise.

Depending on the type of business you have, you might need fewer skilled workers, or a vast workforce. Below is an organizational restructuring example to help managers visualize the process. In this article we will review some of the key points to consider when organizing a business around a new business model.

Table of Contents

1. Organized around a new business model

One company sought to redesign its organizational structure around a new business model. It hoped to increase market penetration and strengthen strategic account management. It decided to run the restructuring in-house, with focused coaching support from Management Kits.

During the restructuring process, it reassessed its organization to see if it could achieve its goals. Its leaders decided to make the changes. They wanted to reduce costs, increase market penetration, and improve strategic account management.

2. Changes to administration

In organizations undergoing restructuring, change is inevitable. When changes occur, employees will naturally experience a variety of emotions, including fear, anger, and decreased trust in management.

As a result, their attention and focus will be centered on defending themselves, rather than on the business problems and opportunities that need to be solved. The result is that creativity and innovation cease and productivity drops. The effects can be long-lasting and are often difficult to reverse.

Reorganization is an important part of changing a company’s structure. It involves a new management structure, new processes, and changes to the organization’s leadership. During an organizational restructuring, the company will be reorganized in order to play to its strengths and differentiate itself from competitors. However, if a restructuring doesn’t happen quickly enough, it can cause misalignment and ultimately paralyze a company.

3. Changes to operations

The process of organizational restructuring is complex, involving multiple stakeholders. While management aims to ensure the viability of the organization, employees may feel a sense of uncertainty and opposition. To avoid this, they may be involved in the restructure as stakeholders.

HR personnel, for example, develop blueprints of the reorganization and communicate these changes to employees. The degree of stakeholder involvement depends on the size and scope of the restructuring.

The restructured teams will need to go through a slow process of team building. This process will strengthen relationships and mutual trust. This type of change has several benefits, including a visible change with no extra costs or approval from the initiator.

Additionally, it shows the leadership’s commitment to the change, demonstrating a clear focus on the new business model. Click here for more information about business models. While some companies have the discipline to follow a guideline, others fail to understand best practices.

5 Keys to Organizational Restructuring

4. Changes to technology

IT analysts document technology changes and identify processes and areas for technology change. They evaluate the economics and benefits of technology changes, document the need for piloting, and rank candidate new technologies for adoption.

Analysts also document the results of analysis activities, such as the benefits of technology change and its impact on the organization. They identify technologies for organizational use and software projects, and they document their initial costs and benefits. IT analysts also document the decision-making process and results of technology change management activities.

To implement a new technology, employees must understand its purpose and implementation process. This way, they can anticipate and cope with initial frustrations and failures. It is important to define expectations and roll out changes slowly and clearly. Click the link: https://www.nber.org/system/files/working_papers/w6120/w6120.pdf for more information about the role of technology in the productivity of your workforce.

Use testimonials, case studies, and open communication to demonstrate benefits of new technology. Often, it is necessary to train employees to become more familiar with new technologies, and the benefits they provide. Ultimately, they must be convinced that a new technology is worth adopting.

5. Changes to products

Companies undergo changes during restructuring all the time. While small changes can have a modest effect on the business, major changes can completely change the direction of the organization. Organizational restructuring may be a positive or negative change, depending on the strategy implemented.

For big changes to be successful, serious planning must be done, including defining the ultimate goal and creating a plan to reach it. Large organizational changes require significant preparation and ongoing change management.

When a company undergoes an organizational reorg, it must consider many factors, including management processes, IT systems, culture, incentives, rewards, and leadership styles. Organizational restructuring must happen quickly, because it can cause an entire company to be misaligned.

The benefits of reorganizing should outweigh the costs. It is important for executives to keep in mind that not all changes are necessarily bad. It can stand to save money and even the business in the long run.