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PLATINUM GROUP NEWS & VIEWS

Successful Company Reorganization During a Crisis

by Michael Murphy / September 23, 2020

COVID-19 has brought about many challenges for businesses that employers and leaders haven’t seen before. Leading a successful company can be easy when everything is running smoothly, but when a crisis strikes, navigating the fallout can test the strongest leaders. The very nature of a crisis means you don’t know what will happen next, but you must react accordingly to keep your company afloat.

While many businesses have closed their doors permanently due to COVID-19 losses, others have been forced to reorganize. This can mean changes to the organizational structure or financial structure of the business. You may even find yourself in the position to restructure everything. The way you handle reorganization is the key to success or failure. Although time may not be on your side, it’s essential that your company reorganization is carefully planned and undertaken with sensitivity and transparency.

6 Steps to a Successful Business Reorganization

Reorganizing a business in the best of times can be stressful and difficult. A forced reorganization due to a crisis will likely make the situation seem even worse. Still, there are ways to reorganize your business in a way that revitalizes the company and provides greater growth for the business and its employees. Taking these steps can help you turn your business around during a crisis and meet the changing needs of today’s world.

1. Project Confidence

A crisis breeds fear and chaos. As a leader, it’s essential to keep a calm front and share your confidence in the future with those around you. While reorganization requires in-depth thought and careful planning, the addition of a crisis means you have to put the plan into overdrive. This may mean taking quick decisive actions and delegating tasks to employees you think can handle the extra load.

During a crisis, every team looks to a leader for reassurance. While times might be tough, you must carefully share honest information while portraying confidence in the company’s future. It’s impossible to avoid a crisis, but the wrong reactions can lead to catastrophic results. The first step in creating a crisis action plan is to control chaos and create a focused plan.

2. Determine If Your Business Strategy is Still Relevant

COVID-19 has changed the way consumers do business in many ways. Examine your company’s business strategy to see if the company goals are achievable with the recent changes caused by COVID-19. Assess any problems the company hopes to solve with reorganization and determine the criteria you hope to meet when a successful reorganization is complete.

3. Identify Potential Changes

Cutting finances is never about simply cutting finances. Each employee that works within your company has a stake in the proceedings of reorganization. To ensure success, it’s important to analyze your human capital instead of applying blunt force employee reductions. Cutting finances or employees within a certain percentage throughout the company isn’t always the answer. Instead, take the time to consider which departments offer the most value and which employees or teams work the most efficiently.

Employees can provide valuable insight into things that aren’t working within the company. Consider sending out an anonymous survey for employees to share their opinions discreetly. Take the time to weigh the potential profits of a successful reorganization against the potential risks like loss of employees.

4. List Options and Design a New Structure

Whether you’re reorganizing an entire business or one department, careful planning and risk assessment are essential. Once you’ve gathered statistics and employee feedback, it’s time to design a new organizational model. Begin by thinking of the new structure as a rough draft that must be perfected throughout the process. Provide comparisons of different organizational structures, compare employee assets, and consider options for making small changes early and saving larger changes until a later date and only if necessary. Involve your full leadership team in the design process, so you can benefit from multiple viewpoints and opinions.

5. Provide Honest, Sensitive, and Transparent Communication

Keeping every person affected by this change in the loop is essential for a successful transition. Typically, face-to-face communication is the only option for situations that require big changes within a company. Unfortunately, the restrictions of COVID-19 could mean you won’t be able to accomplish this in a timely manner. This means providing immediate, transparent virtual communication will likely be more successful. Employees left in the dark will feel betrayed and let down.

Reorganizations are about finances, but they’re also about people. Ensure that all communication is honest, fair, and sympathetic. Even if changes are happening quickly, employees should be kept up to date. It may be necessary to provide mass virtual communication to all employees to share what is happening and individual communication with only the employees who are directly affected.

6. Launch Your New Model and Be Prepared for Necessary Adjustments

Determining whether your reorganization was a success isn’t something that will happen overnight. Expect growing pains, discontent, and adjustments to occur in the months ahead. Providing your department and team leaders with a feedback plan can help everyone navigate the changes ahead and create a smoother system for a successful future.

Instead of planning for immediate success, plan for success that plays out over six months or a year. Provide employees and team leaders with surveys at benchmark dates to consider changes. Regularly schedule virtual or face-to-face meetings, and take the time to listen to everyone affected by the changes. Provide a formal plan to take care of emergent situations as needed in between benchmarks. By nature, humans are creatures of habit. Taking time to adjust to changes and providing alternative options along the way can mean the difference between success and failure.

Reorganization takes a variety of resources and considerable time and effort. Using changes to provide an organized, streamlined approach to traditionally cumbersome jobs can help your reorganization go smoothly and provide a wealth of benefits for the future.

About Platinum Group

Platinum Group is a human capital management resource with solutions to help you streamline operations so you’ll have time to manage your business. For more information about Platinum Group, or to schedule a demo of iSolved, please visit our website.

Tags: Organizational Strengths Financial Strategy Company Growth Employee Retention

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Michael Murphy

Michael Murphy

Michael is the founder of Platinum Group. His passion is in helping businesses to simplify their employee management and accounting processes.