BUSINESS

Restructuring pitfalls

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Restructuring is a common business practice that with the right direction, change management capabilities and communication can be implemented successfully and with limited resistance. Seugnet van den Berg, MD at Management Consulting firm Bizmod, says that common mistakes are made when the process is rolled down to lower levels.

Van den Berg cautions organisations to take heed and consider the following common pitfalls and points when next implementing a restructuring process.

  • The restructure initiative is not run as a project with set deliverables, timelines and milestones. It is added to regular business initiatives resulting in the required focus being diluted.
  • The methodology followed for the restructure is not communicated to lower levels of management.
  • Educating management and staff on the methodology followed is usually seen as part of Change Management, which is more often than not, either omitted from restructure initiatives or watered down to communication only.
  • There is a disconnect between the transformational change required in the organisation and the support received from the HR department. The HR department is also often not equipped to handle the increased workload that restructuring generates.
  • Fitting resources into a structure is often done to suit specific individuals and not necessarily to meet required competencies.
  • Little attention is paid to functional boundary clarification and role clarification.
  • Even when the “right” people are in the “right” positions within a newly defined structure, the person filling the role is often not empowered, therefore they may have the title but no authority or control.

The above are common themes that van den Berg says have emerged from clients who misunderstand and misjudge restructuring exercises.

“Restructuring is usually conducted at a top management level and pushed down on middle management to make it work. This is typically when the pitfalls occur,” concludes van den Berg. 

Tandi Robertson

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