How to Restructure Your Company Successfully

Business restructuring can consist of organizational and financial restructuring, with the former focusing on people and processes, and the latter addressing the balance sheet.

When it is done right, business restructuring makes your business more dynamic and innovative by reorienting it properly toward the market. Above all, to improve your business profitability, just use the following strategies to guide you as you carefully plan your restructuring:

Avoid waiting too long

Waiting is a common mistake many make. Do not wait to restructure, because time passes quickly and is very costly, and even trouble does not wait for anything to come to you.

Delaying restructuring not only reduces the options available to your business but can also increase the risk of business failure. By acting quickly, you may be able to avoid drastic measures and end up creating more impact and value from the restructuring.

Conduct an honest assessment

Successful restructurings are based on accurate assessments, so take your time to determine what is happening in your business. Your business may be overextended, or it may be facing weak customer retention, and you may find it hard to meet profitability targets with low margins.

Accurate financial statements are the best tool for determining what is happening in your business and what is causing your financial distress.

Once you have an accurate assessment, you can refine your strategy and create a transformation plan.

Review your strategy and align your business model with it

Strategic planning should inform the restructuring plan. If your business is facing serious challenges, your strategy and business model may be the cause!

You should consider the following

• Do your products still serve a particular population and demographic space, or have market preferences changed?
• Does the low-margin, high-volume business model still suit you?
• Are you operating in an area where competition is increasing, and what is the nature of that competition?

Review and update your strategy and business model so that you can align the new restructuring plan with a new strategy that gives your business the best chance of success.

Look for ways to achieve quick results

If your business is facing a serious problem, look for opportunities to increase sales and revenue immediately.

You can continue working on medium- and long-term plans, such as changing product or service offerings, but you must identify ways to increase income right away.

In the case of a manufacturer, stopping unprofitable production lines, liquidating unused equipment and negotiating with suppliers are easy ways to achieve quick revenue.

Reduce and minimize complexity

Look to simplify processes and the organizational structure while carrying out the restructuring. Complexity in business is of no use and in fact hinders the level of human activity. Processing customer requests, managers' roles and responsibilities, and even delegation rules and levels can impede performance and should be eliminated.

It is better to take an easy and quick approach to raising the efficiency and productivity of human performance, because you need employees to produce, not to spend more time on unnecessary processes.

Identify core activities and processes

If restructuring your business involves restructuring roles, first identify the core activities in your business as you plan your transformation.

Eliminating duplication is vital, but you want to keep the key activities. By identifying the best value-adding activities and core processes, you ensure that important roles are not removed.

A realistic assessment of workloads

Role restructuring can lead to heavier loads on jobs, so be realistic when assessing and planning the restructuring of your staff. Through a realistic assessment, you can avoid “heavy” or “light” roles and increase productivity and performance in your team.

Match leaders with specific tasks

Your senior managers and direct reports can be important partners during restructuring, as they deal with your team directly. They can be proactive or they may end up slowing progress.

One thing you can do to support your leaders is to avoid overburdening them. If you give them time to focus on leadership tasks, they will have more time for coaching, directing, mentoring and engaging with employees to support a successful restructuring.

Manage uncertainty and resistance

Be proactive in managing uncertainty and resistance in your team through regular communication with them. Clarify roles, activities and tasks from the start and anticipate resistance from particular teams, departments or team members.

If you work proactively to reduce resistance, you can pave the way for a less stressful restructuring.

Be flexible

Stay flexible during restructuring. Whether it is that the elements of your restructuring plan can be updated as you apply and learn, or recognizing your employees' capacity to cut back, avoid falling into the mindset of a perfect organization.

Instead, treat it as if you only need to build a business that will be successful over the next 6 or 12 months. This way, you can stay flexible and responsive to change.

Seek expert advice

Talk to trusted experts, and remember that there is a variety of professionals who can support you throughout the entire process.

Whether it is advice on restructuring, external management, financing or other pillars of sound management, you can get advice so that you can explore your options and act according to the best possible plan.

Start planning the restructuring now

Business restructuring can be an essential process that helps your business evolve in response to a changing environment.

It is often a challenging time, but with a plan that aligns with your strategy and a commitment to flexibility and communication, you can give your business a chance to survive and return to profitability.

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I wish you success