If you look back over the past five to seven years, how many times has your company gone through some type of reorganization or restructuring, whether large or small? Restructuring usually comes with a displacement of employees through layoffs and early retirements. Often, many of your most experienced employees are let go, some of which were current and aspiring leaders.
This leaves your company with gaps in some of the most critical roles in the organization. You’re also left with gaps in potential talent to step into those leadership roles.
Companies already are stretched from not having the leadership skill set necessary to take on key roles. Deloitte found in a 2016 study that companies are not ready to meet leadership needs, with more than half of executives reporting this concern.
You Face Three Tough Challenges
When a reorganization or restructuring occurs, these statistics can be exacerbated by immediate pressure from three inevitable challenges:
• Higher voluntary employee turnover: There’s often high uncertainty among employees about the future of the company. They quickly become unsettled about their personal future with the company — both how long they might have a job or the opportunities that might exist for them. They’re tempted to look elsewhere for the next steps in their careers. In the short term, you’ve got to keep your most promising talent that remained from jumping ship.
• Inexperience: Your organization suffers from a lack of talent with solid experience to move into leadership roles, ready to hit the ground running. Most of your experience has left the company. Your remaining knowledge of the industry, business cycles, operations, customers and financial drivers is limited. There’s a very real short-term operational risk of mistakes, missteps and stress on the company that could be detrimental not only in the short-term but also hard to recover from long-term. You are likely to experience further erosion of your employee base, operating revenue and margin.
• Changing needs: You’ve got to rebuild your pipeline for the longer-term. Your needs will be different, in terms of both numbers and the type of talent you need to carry your organization into the future. So, you’ve got some organizational “soul-searching” to do.
Five Critical Moves
How do you address this dilemma? There are five critical moves that your executive team, human resources leadership and organizational development staff must take in order to come out swimming on the other side of a restructuring:
1. Move on talent decisions. Move quickly in making decisions and reseating your best talent. You’ve got to begin to stabilize the organization and keep operations running smoothly. This movement also will minimize turnover of the leadership talent you need to maintain.
2. Over-communicate. Ensure your leadership team is communicating often, sharing what it can about stabilization and how these leadership moves are strategically supporting the future health of the company. Candor and transparency are important in these communications.
3. Provide a support structure. Create collaborative networks and support systems for the leaders placed into new roles. Make sure they are not isolated to figure things out on their own. They’re not only dealing with the operational dynamics but also an unsettled workforce who they need to inspire and retain. Establish quick market intelligence (QMI) meetings for early input and rapid feedback. Provide a framework for these new and promoted leaders to engage employees. Support for all people leaders dealing with this type of situation will be needed.
4. Encourage risk-taking. Appreciate the rewards of failing fast. Senior leadership must allow for some risk-taking and resulting mistakes. You need learning to occur quickly. Use the collaborative networks for a quick review of lessons learned so that the negative effects are minimized and opportunities exploited.
5. Build growth leadership capacity. Align your talent needs with what will be required to revive growth. What got you here will not get you where you need to go in the future. The company will be redefining itself. You need leaders who can lead through the short-term chaos and guide the organization in both redefining business and operational strategy and achieving aspirational results.
Though restructuring is potentially tumultuous, the moves you make beyond the staff cuts will determine how quickly the organization recovers and is able to move forward. Be aware of some of these often inconspicuous challenges that arise. Prepare to be proactive rather than reactive.