10 Jul 2020
Identifying the key stakeholders and the other do’s and don’ts of successful business restructuring projects
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Understanding key leaders and stakeholders is step one in restructuring smoothly to align with a broader vision, as Yvonne Clancy, Executive Leadership and Strategic HR Consultant, explains.
Mark O’Donnell, Managing Partner of Odgers Berndtson in Ireland (Mark O'Donnell), specialist in high-level executive searches and appointments, continues his investigation (Part 1) into a subject that has become even more relevant as business rethinks after the COVID-19 pandemic.
My colleague Damian Ringwood has written an article on the role of a Chief Restructuring Officer. Do you think such a role and title is a good idea?
I feel that the role and job title of a Chief Restructuring Officer is wholeheartedly appropriate in the context for which it was written—business turnaround directed by Creditors.
From experience, restructuring is a normal part of business life. However, my perspective is that for most businesses, having a permanent C-suite role for restructuring could be destabilising.
I hold the view that restructure should be sufficiently thought-out and strategic enough to bring about fast, sustainable change to meet a business needs for some time into the future.
This change should be embedded quickly with the supporting people processes to stabilise the business and produce productivity levels for success. Restructuring in my view should not be a constant once-a-year process which would necessitate a permanent C-suite restructuring role.
Rather, the activity of restructuring should sit with the entire leadership team, lead or initiated by the CEO and supported by each functional member of the team each with an important role to play.
- The CEO initiates
- The COO/Strategy Officer facilitates the team to design
- The Finance Director provides financial models
- The Chief People Officer provides the people leadership
- Other functional Directors collaborate to define fit for purpose organisation designs and lead through implementation
I hold the belief that the leaders know what is required and where change needs to happen. I have seen real success in restructuring if such a team is facilitated to design their new model and supported by project management expertise through to delivery.
What stakeholders and positions are key to a successful restructuring/reorganisation?
It depends. Different organisations have different stakeholder sets with different requirements for involvement.
I normally recommend that a detailed stakeholder mapping exercise is completed at the initial planning phase of restructuring.
This is to identify a full list of stakeholders, to understand the stakeholder perspective and determine and prioritise engagement, decision making, consultation and communication requirement levels as you move through the project.
I frequently see the following core list of stakeholders:
Government, Customers, Board of Director, CEO, Senior Leadership Team, Staff, Union Representatives
Key to the success of a restructure is managing your stakeholder interests and requirements (including legal) for decision-making, consultation and communication.
What are the do and don’ts of a successful restructure?
From experience, the following would be my recommendations:
Do it once and do it right. Avoid ‘death by 1000 cuts’ at all costs. It is unnecessary and places your organisation in a constant state of anxiety which derails productivity, culture and talent retention.
Don’t hold back. Be brave, don’t just ‘half-restructure’ and save the rest for another day, Get all of your current issues and dysfunction out on the table and leverage the new organisation design.
Do take an ‘outside-in’ perspective of your business. Engage your external stakeholders on their views of your business; what is working, what needs to change, what could be different.
Don’t forget the context. Ground your new structure proposals in your Business Purpose, Vision and Business Strategy.
Do involve your teams. Take an ‘inside-out’ perspective of areas of dysfunction—team recommendations for new structures using all their industry and best practice discoveries. From my experience, leaders often ‘inherit’ structures and dysfunction and know exactly what needs to change and why, but often lack the opportunity and know-how on how to achieve it. A restructure provides that platform.
Don’t leave communication of your plans to the media. Develop a robust communication plan which will mean that staff hear about changes as they occur from the leadership team and not from the media.
Do take a project management approach to implement your restructure. Support your leadership and HR teams with external expertise and facilitation to co-design and implement the process to deliver the change successfully and pivot your business.
Don’t think that once the restructure is implemented and organisation charts communicated that you are finished. For successful restructure, you will need to embed the structure by aligning your culture and all of your People processes, for example, performance Management, Reward, recruitment and succession planning.
Thank you, Yvonne, for your insights on the role of restructuring and the key leadership issues involved.