RESTRUCTURING YOUR ORGANISATION -- WHEN AND WHY?

Restructuring your Organisation - When should you do it and Why?

Yes it's that time again, time for a restructure. What are the roles and responsibilities of your current staff, and how will they change? I was going to say how do they need to change but the word "need" is probably one of the most subjective elements in this restructure process and the need for a restructure is one of those areas which could do with a proper piece of analysis. I am not talking about addressing issues around organisational inertia. Peter Drucker has quite sensibly argued  that virtually no programme,business, public body or other activity can perform for a long time without modification and re-design to face the high paced evolving challenges of our modern world. All organisations need to be capable of change in this vein, however it is important to measure the performance of an organisation before such a restructure and also the performance afterwards to ensure that a restructure is not instituted in isolation from organisational performance issues. It must increase such performance.

 

Restuctures cost a lot of time, money and emotional capital of the people involved, those embarking on such a process need to be convinced that it will enable an organisation to perform better than it was doing before the restructure. The restructure process, once delivered, must have tangible objectives that it will meet and these should be vigorously analysed and tested. Why? Because undertaking a restucturing for very fuzzy reasons without relating it to improving organisational performance is frankly extremely disruptive and often causes more harm than good for both the organisation and its staff. Sadly, restructures are often undertaken without  a clear end goal in sight, often as a quasi mystic belief that cutting some jobs, re-allocating others, bringing in new posts will make the universe of the organisation a better place and the organisation's performance much improved. The same is true of tinkering with the actual personnel involved, who goes, who stays and who comes in as a new player - These issues are critical and should be properly considered, often the personnel issues are the victims of personal and biased assessments which help no-one at all.

 

There should be a solid business case for a restructure and it should be debated before it is implemented, this is even more important for those businesses which are suffering from the current economic retrenchment, because it is doubly important for such businesses to have greater organisational certainty in where thay are heading. Restuctures can be actioned in both positive - growth circumstances and, as is now more frquently the case, in negative circumstances of retrenchment and we are all experiencing that at the moment.

 

All organisations must be capable of change however they must also be in a position to identify the benefits of such restructures. I very often see key individuals obsessing as to the exact nature of formal organisational charts post restructure and how they will look, without realising that informal working relationships are often more important. A tidy revised organisational chart will not guarantee that a restucture willl achieve its goals neither will the blind achievement of a cost saving target, - saving costs is not enough - saving the right costs and incurring the right costs is the way forward. We need to abandon the things we should not be doing and embrace the things we should be doing -- Cutting the blood supply too much to the patient can be fatal - varying it properly can be beneficial. Let's ensure we keep the patient alive and thriving and not in a terminal condition,unready for any economic recovery or any new business opportunities.

 

So before we all tread the thorny path of a restucture let's ensure that we know how performance will improve and that we have the adequate tests and yardsticks to measure our progress. Otherwise there will be a lot of wasted time and effort for not much gain. What are the goals of your restucture and how will they have been achieved? How often do you have restuctures? If they are too frequent then why is that the case? Were previous restuctures too narrow and too focused? We should all learn from our past experiences. Let's try and get it a bit more correct this time round.