All businesses face crucial turning points. Some firms will be doing so good in the business that they grow beyond expectations with expansion plans in tow; while some others face multiple challenges and find their business stagnant or moving towards a downfall.
A company restructuring becomes inevitable in such situations as they can make or break the situation. Company restructuring itself is a process that carries certain risks that can decide the future of your company. So what are these risks? Are they solvable?
Read through the article to get a basic idea about the possible risks of company restructuring and our solution for the same-
Effects on the ROI
One of the easily identifiable risk during a company restructuring is its effects on the ROI. When your company is undergoing recalibration in every department, chances are that your business will be losing some of its efficiency. When your customers are not informed of these changes and restructuring, it can lead to unwanted complications leading to losses on ROI.
Solution: Increase the company’s communication with all stakeholders to ensure their understanding of the changes being affected.
Unaligned teams in the silo
Most large organizations have siloed teams and departments which will show some form of autonomous nature due to their isolation. When a company is undergoing organization-wide restructuring, such teams are often left outside most major conversations. Such teams in the silo will later end up unaligned with the new enterprise strategy ensuring chaos.
Solution: Internal communication is just as important as communicating with external stakeholders. All major organisational changes have to be communicated effectively with all internal departs to bring down such issues during the transition period.
Unaligned organizational goals
Sometimes, concentrating too much on the latest strategy will take it away from the original organizational goals. The proposed work objective and leadership changes will take a toll on the enterprise-wide goals, effectively pushing the changes down the gutter.
Solution: During the strategy design stage, department heads must ensure that potential changes do not put their working goals out of action. The restructuring must be planned in such a way that every team is moving in the same direction in reference to the original corporate goals.
Disrupted workflow & demotivated employees
When an organizational level restructuring happens, some of the individuals across various will have to be moved to other stations or laid off for one or more reasons. This will cause confusion and disruption to the workflow that is being followed in a team. Along with the air of confusion regarding their team roles and pressure of restructuring procedures, team members might feel demotivated at times. Often an increase in workload will make them feel overwhelmed or a reduction in their tasks will push them to boredom, making them think of moving out from the team or company.
Solution: Being aware of employee mindsets in the first step to tackling this issue. Utilize the transition period to prepare teams for newer business challenges. Communicate with every employee in the organization and help them align their personal goals with the new corporate goals.
Company restructuring comes with risks. However, a structured restructuring strategy that takes all entities and stakeholders of the firm into consideration, including the psychological aspects of all the individuals involved can help in riding over these challenges. Identifying and pinpointing the exact risks and their sources will give the senior management and financial leaders work towards a successful restructuring. Appoint reputed business restructuring consultants who can aid in planning a workable restructuring strategy and guide the firm through the transition period.