Reorganizing Your Company

You started your company more than five years ago. The business is doing “okay,” but your board and senior leadership team agree that despite the growing economy, the company might face some tough challenges starting as early as the next four months. There’s no cause for panic yet or the need to cash in on the EIS advance assurance you took at the beginning of your startup.

One of the recommendations during the last board meeting was to look at a possible company reorganization. The marching order is to make a plan within a week and execute the idea immediately.

Your company is relatively young, and this will be the first significant reorganization that you will do. You start feeling anxious and thinking if you must let people go. How does one do a restructuring? Does it automatically mean letting people go?

These are the questions swirling in your head. Consider the following discussion as a starting point:

Understanding Reorganization

Reorganization or reorg means a complete change in the company’s structure. The reason for doing a reorg varies from company to company. Companies grow. They develop more products and service lines. More people are hired to support this growth. But success doesn’t come on all fronts. Focusing on core competencies is required to optimize the use of company resources. Structures need to change. Efficiency, cutting cost, and responding to market demands are essential reasons for doing a reorg.

The reorganization is also sometimes made inevitable due to mergers and acquisitions.

Key Ideas to Consider

businessman

Take a deep breath, and you will be fine. Not getting overwhelmed and writing a plan are already reasonable steps to take. Get your senior leadership team involved as well. Here are some ideas to focus on when doing a reorganization:

  1. People First. If you don’t want the process to explode on everyone’s faces, put your employees ahead of the line. Manage their expectations immediately. Come up with clear guidelines, presentations, and FAQs that they can refer to before the execution of the plan. Open channels of communication to explain what is happening and why it is happening. If it’s about seeking growth, talk about how the reorganization will address this and what their roles would be. Let them be heard and provide input. The last thing that you want to have is some disruption brought about by gossip or inaccurate information.
  2. Understanding who you are and who you will be. Your core competencies will always be the hub from where this reorganization revolves. Decide on the right structure based on your core competencies and how you intend to meet market demands. How do I align my existing roster of employees to meet new product demands? How can I create a better collaborative environment across teams? These are just some of the questions you need to answer.
  3. Haste doesn’t make waste. This is true in the context of a company reorganization. If there is a clear plan, you’ve created an atmosphere of transparency and urged people to participate. Then there’s no reason to prolong the implementation of the reorganization. The longer people are left up in the air because decisions are stalled, the more anxiety you create. More stress means more distraction. Remember that it is not only about the life of the company; it’s also about the lives of your employees.

These are all, of course, easier said than done. But if you set out writing your plan and you have the buy-in of key people who will help you implement the reorganization; acceptance will be much easier.

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