To restructure or not to restructure your company? This question doesn’t always have a definite answer. Company Restructuring, by definition, can be extremely disruptive, regardless of being handled as smoothly as possible with the best of intentions. There is always a risk that a new company structure will bring unanticipated challenges.
A well-defined procedure and a great consultant can help you tackle those risks in the near future. These risks are often repetitive in the case of worn-out structures. As fast as these changes hit us in today’s market, it also pays to create an ambidextrous culture, both nimble and adaptable, to allow the organization and actively respond to changes and modifications.
Before deciding whether your company needs a new organizational structure, you should understand what it actually means.
What is Company Restructuring?
Every organization needs to make changes and restructure its existing systems, processes, and the team during the journey from inception to maturity. It is a normal and inevitable part of the company’s life cycle.
While there are many ways this can be defined, a Company Restructuring broadly indicates any situation where an organization makes significant changes to the financial or operational structure to make it more suitable for meeting present needs.
7 Signs You Need to Restructure Your Company
Here are seven signs to help you determine whether you need Company Restructuring:
• Your Competitive Landscape Is Changing
When your customers particularly change the way they deal with you, you might need to rethink the way you are organized. For example, It no longer make sense to have independent bottlers selling to national accounts in every community and Coca-Cola’s fountain drinks sold to national accounts when all Coca-Cola’s biggest customers started buying on a national level and requiring a single point of contact with Coca-Cola for all bottles, cans, and fountain sodas. Consequently, the biggest U.S. bottler, Coca-Cola Enterprises, merged with Coca-Cola North America to improve customer service.
• You Start Up A New Organization Or Merge With Another Company
A new business needs a structure. When AutoZone got into the commercial auto parts business, they realized that they could not serve their commercial customers in a retail environment. Hence, that business remained free of limitations and was structured differently, although essential work was done to leverage the retail network to get parts where they were needed.
• A New Leader Is Taking Over
We never advise a new company to restructure just for putting their stamp on objects, although this is the norm at some companies. That being said, often a new leader is brought to turn things around and find sources to improve efficiency or better align the organization.
• The External Environment Is Changing
This results from changing regulations, new technology, preferences of customers, or a variety of other reasons and is largely why we recommend you to have a conversation about changing ‘business drivers’ at least twice a year.
• The Business Is Planning To Grow
In this case, it is often essential to increase the talent in the organization and create a space for people who can handle a broader or deeper scope. It is also the time to measure how adaptable the organization is and plan to prosper within an expandable structure.
• The Business Strategy Is Changing
If the business is redirecting its focus towards selling new products or operating in different markets, it is likely time to implement a company restructuring process.
• The Internal Organization You Interface With Is Changing
Often, organizations need to redesign in order to continue doing business efficiently. After Bank of America restructured its card business, it is learning, finance and HR organizations had to reorganize to ensure appropriate support and a single point of contact for its executive team.
The Bottom-Line
Change is never easy, but when in business, it is inevitable, and you have to embrace it.
Eventually, you will have to restructure your organization, even if it’s not an easy task. No matter what road you take, a company restructuring process will always have disruptions. That is why it’s essential to restructure at an early stage.
Do you want to know more about practicing corporate restructuring the right way? Then let Daveron Networking assist you through the process. Our experts will help you establish the right marketing strategies for your business.
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