Over the last two months, based on the belief the bottom of the recessionary pit has been reached, most of my clients have realized that what made them successful before the economic meltdown is not going to keep them successful now. To be successful in the Post-Recessionary Economy, companies are going to have to “Do more with less. And do it better.” This means a serious restructuring of every aspect of a company’s operation. And I don’t mean additional downsizing – most good companies
accomplished appropriate, if painful, downsizing during the “hunker down – deer in the headlights” phase of the recession. To be successful from now on, a company needs to examine every operation to determine these three things:
1. Will the operation generate the profit margin necessary to justify continued investment of the company’s resources?
2. Is the manager of the operation the right person to run & grow the operation?
3. Are the employees in the operation the right employees for the operation?
These are not easy questions to answer for a variety of reasons (i.e. managers are in love with an operation, there is an ongoing commitment to managers, employees and customers). However, to reduce the angst of the necessary Restructuring Program and to ensure the Restructuring Program succeeds, when I am assisting a company’s Management Team in answering these questions and then in developing and implementing the actual Restructuring Program (the doing of what everyone knows needs to be done but there is a reluctance to do), I use the following process:
1. Everything & Everyone in the Company Must Be Under Review! From the CEO to the Front Line Worker. Even a profitable operation must be examined to determine if it can be made more profitable.
2. Conduct Employee and Customer Focus Groups! Listen to discover what the company does right & wrong in the eyes of these important stakeholders and determine if the perception about the company must be changed.
3. Develop a Communication Program! Everyone is freaked out by the events of the last year. When you say “restructure”, everyone will hear “downsizing” and go into panic/resistance mode. Regular communication = the buy in required to make the Restructuring Program work. You can not over communicate.
4. Be data driven! Don’t be emotionally attached to people or processes. The less subjectivity in the Restructuring Program, the more likely it will succeed.
5. The Pain Must Be Equal! – When a Restructuring Program means reductions in compensation (wages & benefits), the pain of such reductions must be shared equally by all if there is to be buy in to the Restructuring Program. And no one believes a 10% compensation reduction for a manager has the same pain quotient as a 10% compensation reduction for the front line worker.
6. Don’t Make Promises You Cannot Keep! Trust is very fragile now and requires you always do what you are supposed to do and do what you say you will do. No excuses for breaking a promise will be accepted.
7. Buy-in = Making the Restructuring Program an Essential Part of the Plan for the Future! Everyone needs to believe the future will be better. Connect that hope for a better future with the Restructuring Program.
8. Accountability is Required! Once there has been buy-in to the Restructuring Program (even if it is half-hearted buy-in), there must be assigned accountability for the implementation and success of the Restructuring Program – with concrete consequences for failure.
9. Motivation is Mandatory! The success of the Restructuring Program is often based on properly answering the often unspoken but inherent question “What Is In It For Me?” Connect compensation to the success of the Restructuring Program (i.e. 50% of my compensation is based on measurable results from the
Restructuring Program. Therefore, I am very motivated to achieve those results!)
10. Celebrate Success! As the phases of the Restructuring Program are successful implemented, celebrate success with everyone involved in the Restructuring Program.
The Bottom Line: Organizational survival means a successful Restructuring Program so that the Company “Can do more with less. And do it better.”
Question: What restructuring items are you undertaking to make your operation more successful?
Paul Glover, President Go to www.trainingeverydayleaders.com for more information about Restructuring in the Time of the WorkQuake™.