Company restructuring involves altering the organisational structure of a business to boost profitability and improve competitiveness. These kinds of changes are often met with significant apprehension, as restructuring a business is a process that is shrouded in myths and creates uncertainty for employees at all levels. While concerns about a company restructure should not be overlooked (particularly when jobs are on the line), such changes can also bring about positive change and growth. For this reason, we’ve busted all of the key myths associated with company restructuring so that you can make an informed decision if you are considering this as a course of action for your business.
Myth #1 – Restructures Are Always About Downsizing
One of the most pervasive and challenging myths about company restructuring is that this type of action is primarily about reducing headcount and cutting costs. While restructuring a business is a great way to save money and job losses can be an inevitable part of achieving this, the process brings a number of benefits and businesses decide to restructure for a whole range of reasons. For example, company restructures can be driven by the need to adapt to changing market conditions, streamline processes to increase competitiveness, or realign the organisation for future growth. In many of these cases, a restructure may actually result in the creation of new roles and opportunities for existing employees.
Myth #2 – Restructuring Is A Sign Of Failure
Another common misconception surrounding company restructuring is that this process is an admission of failure or last ditch attempt to rescue a failing business. Organisational restructuring is a key element of business rescue in many circumstances, but there are also many examples of businesses that have restructured as a strategic decision. The business landscape is constantly evolving and successful companies adapt to these changes by reorganising to maintain competitiveness and boost long-term viability.
Myth #3 – Only Senior Leadership Benefit
Any business change that can result in job cuts and redundancies is often met with significant apprehension from junior and mid-level employees. Naturally, this apprehension translates into scepticism about the real motives behind a company restructure and many employees believe that restructuring a business is only ever done to benefit senior leadership. While it is essential to scrutinise any company restructure for its impact on all employees, successful restructuring should benefit the entire organisation. More effective internal processes allow employees to be more productive, providing opportunities for skill development, career progression, and an improved work-life balance at all levels of the organisational hierarchy.
Myth #4 – Results Are Instant
Both employees and directors can fall into the trap of thinking that a company restructure is a one-time event with immediate and lasting results. Particularly in cases where restructuring is implemented as a business navigates its way out of administration, the bulk of the organisational changes may be made at once. However, a company restructure is a multi-phase process and it can take monthly or even years to start to see the desired changes. Small and incremental changes are likely to be necessary over a longer period of time to ensure that the business meets the objectives of the organisational restructure.
Myth #5 – Restructuring Is Guaranteed To Work
While most of the myths surrounding company restructuring stem from those dubious about the process, it’s also important to consider the myths spread by those in favour of the process. Many individuals believe that a company restructure is guaranteed to be a success, but this is not the case and oversimplifies the complexity of making any kind of change within an organisation. The success of a restructure depends on the planning, execution and personnel implementing the changes and can go wrong at any stage. This highlights just how important it is that restructuring measures are taken seriously, with proper advice sought before the business reaches a point of desperation.
Whether you are considering company restructure as a business rescue method or wish to remain ahead in a challenging market, make sure that you speak to a professional as soon as possible. The team here at Ballard Business Recovery can provide you with honest and transparent advice when it comes to company restructure. Our business rescue experts are on hand to bust any myths you may have heard about restructuring a business and talk you through your next steps so that you can embark on a period of change in full confidence. Get in touch today to find out more.
