Published on May 2nd, 2023
Like people, organizations rarely stay the same. New markets open up, processes become outdated, and teams face roadblocks to success. As business needs change, it’s not uncommon for companies to experience growing pains.
These challenges can mean it’s time to restructure operations, even if the clues aren’t always obvious.
The signals could be more subtle, such as small but steady drops in productivity or employee morale.
While reorganizing company operations is never easy, it can save the organization in the long run. That’s why it helps to recognize the signs before it’s too late. Here are four every leader should know about.
1. Teams Don’t Have A Strategy
The nature of employees’ work influences their commitment to the organization. Commitment takes a nosedive when assignments seem to come out of nowhere and lack direction.
That can be the case when there’s lack of strategic alignment between team responsibilities and the company’s vision.
If they don’t know the company’s true north, teams may grow frustrated because their efforts appear meaningless. It’s no wonder employees’ output starts to decline, whether it’s measurable in numbers or work quality.
To move the organization forward, staff members need to understand why they do what they do, which is where strategic alignment comes in.
The purpose and the desired outcome must be clearly mapped out. The end game should also be achievable with quantifiable signposts along the way.
Otherwise, your teams might feel like they’re just spinning their wheels. And this feeling will likely lead to turnover if something doesn’t change.
Better alignment between what teams do and where a company is headed can mean a shake-up in organizational structure.
It might also involve different initiatives and work methods. The key is communicating how and why everything leads back to the true north.
2. Sales Are In A Slump
Declining sales can be a difficult signal to assess. Sometimes it happens because of external circumstances, such as a tough economy.
Seasonal fluctuations could also contribute to a company’s revenue problems. It takes astute discernment to know when cooling sales point toward the need for organizational change.
To reach the correct conclusion, you have to uncover the driving factors. You don’t want to rearrange your business as a knee-jerk reaction to what your competitors are doing.
Take a second look at your markets, historical sales figures, and internal structures. For example, are changes in consumer behaviors temporary or likely to stick around? And how do these adjustments impact what your company offers and how it does so?
In other words, don’t respond to a potentially changing landscape by copying the competition. Remember, you won’t have the advantage of knowing the exact strategy behind another organization’s new product or price change.
You can only guess, which could be slightly off base at best. Instead, perform a complete analysis of your company’s situation with internal and external data before you make changes.
3. Efficiency Isn’t Up To Par
Inefficient processes can cost organizations up to $1.3 million a year. Workflows from the early 2000s and repetitive tasks are typical examples.
These ways of operating usually stick around because a company’s culture is hesitant to change. Businesses are more comfortable chugging along the way they always have.
But as a company expands, its internal processes and structures should evolve alongside that growth. That may require putting current team members in new places on the org chart.
Improved technologies can be another reason to shift. Keeping manual paper trails doesn’t make sense if cloud-based storage can accomplish the same objective faster.
Likewise, a reluctance to implement the full range of tech’s capabilities could negatively impact customer and employee satisfaction.
For instance, most consumers expect an online store to deliver within a few days, if not a few hours. They don’t want to go through a virtual obstacle course to get what they need. But a cultural mindset stuck on the idea of preventing fraud could create roadblocks.
If the company requires sales reps to verify customer identities manually for each order, it slows everything down.
Automating this process with verification technology speeds up fulfillment and lets employees concentrate on more strategic tasks. It also allows the business to place its highest performers in positions of increased responsibility.
4. The Ability To Adapt Is Low
While knee-jerk responses aren’t desirable, sometimes organizations need to pivot rapidly.
An example is the workforce’s growing desire for flexible job schedules. About 73% of employees want employers to offer remote options.
Hybrid job opportunities are a driving factor behind resignations, prompting 66% of business leaders to consider redesigning their office spaces.
Organizations without the technology and structures to support these redesigns are at risk of losing valued talent. These companies will also experience more hurdles with recruitment.
In the current environment, it’s hard to convince candidates to accept offers if flexible work arrangements aren’t part of them.
Low adaptability is a sign existing structures no longer cut it. Those systems may be blocking success rather than supporting it.
When supporting beams are too rigid, you may need to redesign them from the bottom up. You want to keep a stable foundation but also have a structure that can flex.
This may call for organizational restructuring. Don’t be surprised if you need to call on change management and restructuring experts to lend a hand. Any major restructuring will be disruptive to current staff, even if those changes are welcome.
Signs It’s Time To Restructure
The decision to turn your operations upside down isn’t a simple one. It involves changing mindsets and moving past comfort zones. However, business leaders can find the need to restructure inevitable. As environments evolve, unresponsiveness can spell the end of once-great organizations.
While hints it’s time to change can stare you in the face, internal paradigms may obscure the signals.
One of leadership’s biggest challenges is distinguishing between what’s cyclical and more permanent. Paying attention to clues like constant mismatches between tactics and strategies will help you act at the right time.
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