Restructuring
Why didn’t the business get the structure right from the beginning? Isn’t this just a euphemism for firing people to make more money?
The first question is far easier to answer than the second. Businesses exist in a dynamic environment which is in constant flux. Consider a company founded in 1850 to make buggy whips. No one knew it at the time, but every part of the company would need to change drastically in the next 25 years to accommodate the industrialization of agriculture. It then would need to change fundamentally to accommodate the invention of the internal combustion engine fifteen years later. By the time the Interstate Highway System and commercial airlines existed, they needed to reconfigure the plant to manufacture something entirely different.
One of the better-known examples is Grumman, now part of Northrop Grumman. The company was building floats for seaplanes when a customer told them that he was so impressed with the quality of their products that he would finance Grumman building a prototype of a complete seaplane. Within about four years Grumman had outsourced floats to a subcontractor.
Future-Oriented
I’ve led restructuring efforts in three organizations. The first step is to determine what the organization’s overarching goal will be in the future. This entails discussions with stakeholders at every level. I found in one organization that even the most senior people in the company were willing to mouth the words about the overarching goal, but then reverted to where the organization had been before I had done the reconfiguration. I fought that by requiring every manager to create job descriptions and metrics for the job. That was the easy part. The next part was far more difficult. They had to tie the individual’s job description to the overarching goal. Oops. Those that could not be tied to the overarching goal were candidates for reassignment.
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