Restructuring your company is a huge step that should be taken only after the deepest possible consideration. A proper restructure is a little like creating an entirely new company. Some companies do just that, only keeping the familiar name for branding purposes.
Knowing how to restructure is one thing,knowing when it is time to restructure your business is quite another. There are a number of factors to consider and no single article can list them all. It helps to narrow it down to a few key factors that will keep you focused.
There are a lot of things that happen in a business that make you consider restructuring. Here are a few in no particular order:
-You are not making enough money.
-Your business has suffered reputational damage.
-Key employees are leaving for better opportunities.
-You are constantly outperformed by competitor products and services.
-Stagnation has set in.
-You have no clear path forward.
All of these are serious problems, especially for enterprise-class businesses. But as CEO, you don’t want to hit the eject button too early. There are much less destructive ways to deal with those issues. Try them first. However, you might need to start with something bigger if you are having all of these problems all at once. Let’s take a look at a few of them and consider solutions other than a full restructure:
If you are having a problem with stagnation to the point that there are no clear paths forward, you might need new visionaries to spark a new vision. Task the keep people in the areas where progress has stalled to present plans, not just ideas, for moving forward. If they can’t produce workable plans, you need to replace them with people who can.
That is where something like Forum jobs can be a real lifesaver. You are not just filling a sales position or something in middle management. You need to make top-level changes that require top-level people. They’re out there, and are probably working for some other company looking for their chance to make a real difference in their industry. To find them, search in the right places. Also, avoid the mistake of casting too narrow a net. Brilliant people do not usually come from cookie-cutter moulds. You will have to think outside of your box to find the people who can get you out of your rut.
Sometimes, damage to your corporate reputation can never be repaired. However, in most cases, there are ways to repair your damaged reputation. The key is to soberly assess the damage and stop the bleeding. When your reputation is taking a dive, don’t double-down on anything until you know what the problem is. Don’t be belligerent and prideful. That form of pride at a time like that can make it nearly impossible to recover, even with a reorg.
Many companies deal with damage to their reputation by rebranding rather than reorganizing. Facebook has recently rebranded to Meta. Only time will tell if this move will work. While it is good to not mistake your product for the company, Meta moved from branding as one product to another. Mistakes were made with the rebranding although the strategy is sound. If the cause of the bad reputation can be traced to corporate structure, a reorg could be the only option. But before going that route, take a beat and discover the root of the issue. Humility will go a long way.
If you find that you can’t compete no matter what you do, the problem might not be corporate structure, but your vision. Some people hold on to their visionary idea as if it were a religion to be protected at all costs. What it typically costs is your business. Competitors are beating you because there might be something fundamentally unsound about your business idea, product, or strategy. It keeps losing because it can never win in the current market environment. Don’t reorg your business to keep a bad idea alive. Reimagine your idea.
There are times when a reorg is the only way forward. That time is when nothing you do can show you a path forward, overcome reputation damage, or overtake the competition.