Organizational restructuring is often a component of business transformation. An organization is a tool or means that helps you achieve a business objective.
Organizational restructuring is required when the company needs to re-align and re-design the organization to fulfill a new business need. Any restructuring requires the company to ask itself the following questions:
- What is it that I want my business to achieve?
- Is the existing organization unable to efficiently meet and deliver on the business objective?
- Will an organization restructuring require a change in business strategy?
- What should be the company’s revised business strategy?
- Have the revisions in strategy been tested for their efficacy and ability to achieve competitive advantage over competitors?
- How will the strategy changes impact the company’s business model?
- What new skills and technologies will be required to implement and meet revisions to business objectives?
Organizational restructuring should only be undertaken after a thorough review of the business strategy and its impact on the business model has been completed. The strategy changes should be adequately tested. All risk mitigation processes and actions should be implemented and tested before the restructuring actions are initiated.
Organizational restructuring impacts people directly. Change management issues emerge, and the organization has to be prepared to embrace the changes. New structures, roles, and responsibilities of each functionary, and changes to business processes, should be planned and ready before roll out of the change.
Most business process implementation is today powered by technology. People have to be prepared and trained to adopt new technologies. Inadequate preparation has a direct impact on organizational restructuring implementation. If the change proposed is going to be big, then change management plans must be prepared and rolled out to enable a smooth transition.
Organizational restructuring is an essential and delicate people management exercise. It should be handled with care and caution. Fast-growing organizations bring about organizational changes periodically and have created protocols to implement the restructuring.