• Tracey Corney

Things to think about when considering a restructure

The reality is the UK economy will be feeling the impact of coronavirus for some time. That's not to say there aren't companies who are flourishing, or those who will see this as a “blip”; however the majority of businesses will need to continue to consider how they're working for the longer term, past the point that lockdown is eased and we start to get back to a type of normal.

Restructuring is something that will be on many people’s minds. This may be as a result of a downturn in profits, a less rosy projection of long-term finances, or simply a realization that things can be done differently. Whatever the reason, restructures can present an opportunity to an organisation, but it can also represent risk. There is no single answer as to how an individual business should manage it, but there are some good practices that can help the right decisions to be made and the risks to be reduced.

Be clear on your outcome - it is easy to simply say that you want to cut costs. However, what you probably want is to reduce costs while retaining profitability. You may wish to have a different culture or approach in place, but that does not necessarily mean you want to lose the things that do work. It is vital that you think carefully about all your objectives before you start acting, otherwise you may find yourself in a place you did not intend to be. Think about the roles and responsibilities first –You should make your decisions on the principles, roles, and responsibilities you need to meet your objectives before you start putting name into the frame. This is not to say that people are not key to your structure, but rather that you first create your “ideal” organisation which you can then adapt if you need to once you start putting the people in as an overlay. It also avoids the legal risks that come if you end up with people being made redundant and claiming that there was not a fair process, as if you can demonstrate that you looked at the “what”, and looked at the  “who” only later as part of any selection you are in a much better place.   

Be realistic on timing - there are two elements to this. The first is thinking about what an appropriate point in time is to put a new structure in place, and the second is being realistic about the amount time it can take. The appropriate time to make the change will be very individual to your business. If you’re about to come into a busy period, then you need to think carefully about how you would manage the impact of making structure changes. The time it takes will come down to complexity, risk management and resource. Restructures do not always have to take a long time, but they should take the time that is needed to avoid undue risk.

Engage with the right people at the right time – do not wait until you are ready to go before engaging with peoples whose expertise and insights you need. If you do, best case they will not have the benefit of your thinking and will be playing catch up when you want to move, worse case they may throw a spanner in the works and derail what looked like a wonderful plan in isolation of other factors. The right people may be internal people who will have to support and manage the change, or may be external expertise, but whichever, do not wait until you want them to act before starting to talk to them.

Have a plan to implement change – this isn’t saying you need to be a project manager, but think about what you want to do, when you want to do it and what the dependencies, risks and issues are up front. With anything that effects your people, have clear communication plans for both them and your clients. You need to ensure that you have the right narrative and discussions happening at the right times. Communication makes or breaks most efforts to change successfully so think carefully about it before you push any buttons.

At times of challenge, or when you recognise a change is needed, it is tempting to plough ahead, especially if you believe you are very clear on where you want to go. But pausing, thinking about what you're doing and how you want to do it can make all the difference. A short delay upfront to go through some key thinking is likely to get you a much better outcome in the longer term.

#restructure #coronavirus #COVID-19

Please note that this information is for guidance only and should not be regarded as a substitute for taking full legal advice on specific facts and circumstances at the relevant time..