Successful restructuring and reorganization within a company require elaborate planning in advance so that there is no interruption in the daily workflow. This can only happen when all programmatic requirements are addressed, support services are in place, good workforce coordination and communication happen on a regular basis. Company heads find it essential to restructure in order to address effectiveness issues if any, keep up with budget restrictions and to initiate new programs for organization development.
Reason for organizational restructuring
Doing a reshuffle, once in a while, has always proved to be good for the business – boosting efficiency and upgrading people and technology.
Keep up with the change
Change is constant. In business too, companies need to adapt to the changing times. Those entities that do not adapt tend to fall back and become obsolete. Most companies today, though, are on the lookout to explore new areas to boost business and at new products to expand or to close down divisions that aren’t doing well. These initiatives call for restructuring as new experts need to be hired, others need to be trained according to new benchmarks etc.
Innovation in working
There are new requirements that could trigger change. For example, modern methods of work like Telecommunicating demand that new systems and policies have to be put in place, things that would shake up the culture of a place. The presence of having telecommunicating employees and temporary employees could require an overhaul of management parameters, benefits and compensations.
Innovations in technology, process of working and other factors influence business and the changes it goes through. For instance, enterprise resource planning (ERP) which links the entire system and its various procedures could need some overhaul. Failure to do so could result in a discordant workflow and an obsolete system and procedures.
Acquisitions and mergers
Whenever a business entity emerges with another or there is an acquisition, it would result in change of ownership. The new heads could decide to start afresh or add a stamp of their authority to create a new identity or revamp an existing one. This might call for reshuffle of key personnel to accelerate efficiency and boost growth.
Here are some awesome examples of successful organizational restructuring:
A new CEO gives a new lease of life to a legendary company – Microsoft
Post the phenomenal success of its Windows Operating System, Microsoft was struggling with turf wars between different business units. Innovation was being thwarted. Politics was rife. In 2014, Satya Nadella took over the reins as CEO, undertaking a major restructuring to weed out internal politics.
As the restructuring began the CEO shared with employees with a new sense of mission – “to empower every person and every organization to achieve more.” This new conviction gave employees the belief that their work has real meaning – that served as the greatest achievement of the CEO, Satya Nadella.
By 2000, Google was a major success. Products like Google maps and Gmail swept across the world, sweeping the competition away. The R&D team was working on everything. Larry Page termed them as “Moonshot” projects, as most were seemingly impossible. From human longevity to autonomous vehicles to wearable tech to smart home devices to many more radical innovations, the list goes on. Company goals were intertwining, teams, funds and managers. It had become a monstrous giant. Larry Page then decided it was time to deconstruct. He broke up Google into its constituent parts, each its own company, with all under a common umbrella called Alphabet. Each of Alphabet’s companies has its own goals, with an exclusive focused solely on those goals.
Larry Page gave each company the freedom to focus solely on their goal, without worrying about the overall growth of Google. Each company now started enjoying a new sense of cause and effect, now making innovation more meaningful.
Managing change effectively is no simple task. It can only be done by ensuring that employees, clients and partners are aware of what is happening, why it is happening, and how it is affecting them – a transparency in communication to ensure successful organizational change.
Organizational restructuring needs to be initiated by experts. If you are looking out to engage one, please feel free to call us – the best Business Strategy, HR & OD Consultant in Pune to assist you in organization restructuring.