Organisational restructuring requires thoughtful planning and careful implementation.
As a manager or professional, it’s crucial to have the knowledge of how to navigate the complexities associated with such restructuring projects.
In this blog post, we’ll provide you with some valuable insights into what goes into successful organisational restructuring process, from outlining objectives to executing new strategies.
We’ll also discuss key steps you need to take in order to create a streamlined and efficient transition plan for your organisation.
Read on !
What is organisation restructuring?
Organisational restructuring is an essential process when a company decides to change or improve the efficiency of their existing organizational structure, often involving downsizing in the number of employees. It may include changing the composition and job roles of individuals in order to improve the overall productivity of a business.
Why do organisation need restructuring?
Organisational restructuring is an important step for businesses to ensure their continued success and efficiency. Businesses may need to restructure if their existing organisational structure is no longer able to meet their objectives or goals.
There are many benefits of organisational restructuring. For instance, it can help businesses become more efficient, increase productivity, improve customer satisfaction, reduce costs, and create a more agile organisation.
The key to successful organisational restructuring is careful planning and implementation. A well-structured plan should include objectives to be met, timelines for key milestones, and strategies to ensure the process runs smoothly.
Organisational Restructuring Process
Following are key components of organisational restricting process.
Know the reasons of restructuring
Organisational restructuring is a complex process that requires strategic thinking and planning. There must be reasons for restructuring so it should be started by asking why question like why restructuring is needed and how it will compliment business strategy. A successful restructuring plan should include clear objectives to be met, timelines for key milestones, and strategies to ensure the process runs smoothly. Therefore, all the proposed restructuring should be in line with objectives of business strategy.
Assess current situation
Before beginning the organisational restructuring process, it is important to assess the current situation and gain an understanding of what needs to be improved. This may involve conducting research, reviewing operational performance, and analysing financial records. It is also important to identify areas of potential cost savings or other organisational improvements that could be achieved through restructuring.
It is important to assess the current structure and why it is not meeting the objectives of business. This process begins with understanding the organisation’s goals and objectives, as well as evaluating its existing structure in terms of size, complexity, cost structure, resources, culture, capabilities and management.
Weigh in different options and design a new structure
The next step in the organisational restructuring process is to consider different options and select the option that best suits your organisation. It is important to understand the implications of each option, both in terms of operational efficiency and cost savings.
When evaluating different restructuring options, it is important to consider how they will impact existing processes and operations within the organisation. It is important to analyse the effect each option would have on organisational culture, morale, customer satisfaction, profitability, and other metrics. This can be achieved by studying the effects that similar organisations have experienced as a result of their restructuring decisions.
Write down new structure
Once the new structure has been designed and determined, it is important to document the new structure. This should include a clear explanation of the vertical and horizontal lines of authority, how decisions will be made, how resources will be allocated, who will be responsible for each task, and any other changes.
The new structure should be clear about the skills and expertise required for each position. It should also provide information about the distribution of functions and relationships among these functions. For example, if a company is restructuring its IT department, it should explain the roles of each individual in the IT department and how their skills and expertise will be required in new structure.
Presenting and explaining the restructuring idea to all team members and stakeholders is crucial for the successful implementation of restructuring. It is important to inform them of the changes in an effective and timely manner. This should include details on why the restructuring has been necessary, what it will involve, how it will impact each individual within the organisation, and any other pertinent information.
Ideally, this communication should be two-way to hear the voices and feedback of employees. To ensure that everyone is aware of the changes and understand their implications, it is important to provide clear information about the restructuring process. There should be flexibility in proposed structure to make changes based on feedback given by team members, employees and stakeholders.
Manage resistance from team
It is quite natural for team members to resist the organisational restructuring process, as it can create feelings of uncertainty and fear about their current roles or future prospects within the organisation. Resistance to the new structure may manifest in various forms, such as vocalised objections, passive-aggressive behaviour, decreased performance and motivation levels, negative gossip, covet and overt, individual or group level etc.
Business leaders role is crucial in managing resistance to organisational restructuring processes. This can be accomplished by engaging with and listening to employees in order to understand their concerns, fears and objections. Business leaders should communicate the reasons behind the restructuring process, and how it will benefit the organisation and team members in the long run.
Develop an implementation plan
Implementation plan of organizational restructuring is a document which guide every team member and stakeholder about different tasks under restructuring, role and responsibilities and timeline to complete restructuring. It should also include milestones and deadlines for completion of each step of the process.
The successful implementation of any organisational restructuring process requires the involvement of all stakeholders. This includes not only those directly responsible for making decisions, but also those whose roles or tasks will be impacted by the changes.
Prepare a Budget
When preparing a budget for organisational restructuring, it is important to consider the costs associated with making changes to the structure. This includes costs related to planning and designing the new structure and implementation of restructuring.
The cost of planning and designing a new organisational structure can vary greatly depending on the complexity of the restructuring process. Generally, costs can include employee wages, consultant fees, technology expenses, legal services, and communication expenses.
Set up a dedicated team
Setting up a dedicated team is essential component of organisational restructuring process. It includes assigning role and responsibilities of each member. This helps ensure that everyone in the organisation understands their role in the new structure and how they can best contribute to achieving organisational goals. It also helps create a sense of ownership and accountability among employees.
When undergoing an organisational restructuring process, it is always recommended to have one dedicated project manager on board in order to ensure the successful delivery of the changes. This project manager should be someone who is dedicated to managing the restructuring process from beginning to end, and who can coordinate all activities related to the restructuring.
Implement a test phase
A test phase allows the organisation to trial changes and identify potential problems or issues that need to be addressed before full implementation. By running a test phase, organisations can detect any flaws in the new structure, gain feedback from stakeholders and respond quickly to any unexpected outcomes.
In this phase, it is important to assess and measure the results of the organisational restructuring process. This can be done by collecting feedback from stakeholders, as well as tracking any changes in performance or productivity levels that could have been impacted by the restructuring.
Roll out full implementation
The last step of an organisational restructuring process is to roll out full implementation. It is important to ensure that all aspects of the new structure have been successfully implemented, and that employees are properly trained on their new roles and responsibilities. This includes providing training on how to use any new technologies or tools introduced as part of the restructuring process.
It can never be a mistake-free phase so monitoring and analysis of implementation must be made to to ensure that any mistakes or problems are identified and addressed in a timely manner. The project manager should be responsible for overseeing this process and reporting back on any issues or concerns that arise during the implementation phase.
Restructuring a business is not an easy task and involves a lot of factors. The steps mentioned in the blog post should be followed in order to ensure a successful organisational restructuring process. A test phase should be implemented before rolling out the changes to the entire organisation. This will help identify any problems that may arise and allow for adjustments to be made.
Have you undergone a business restructuring? What tips would you add to the list?