Company restructuring is all about making your organization more agile, efficient, and ready for the future. It’s not just about shifting roles or redrawing reporting lines — it's about rethinking how your company operates from the inside out.
In two-thirds of the cases, reorganizations result in at least some level of improvement. Whether you're looking to boost growth, adapt to market changes, or create a more engaging workplace, restructuring can be the key to building a stronger, more successful business.
But how do you make sure your restructuring process hits the mark? In this guide, we’ll walk you through the why and how of restructuring, from spotting the need for change to executing a successful transformation. Let's dive into the key steps to ensure your company ends up on the winning side of change:
What is company restructuring?
Company restructuring is the process of reorganizing internal processes, roles, and responsibilities to align with new goals or changing market conditions.
At its core, company restructuring involves a thoughtful reevaluation of the entire organizational structure. This can mean flattening hierarchies, redefining roles, or reimagining how departments collaborate. The goal is to eliminate inefficiencies, improve communication, and create a more dynamic environment where employees are empowered and motivated.
Restructuring is essential for companies that want to achieve long-term growth and remain competitive. In an ever-evolving market, rigid organizational structures can slow down decision-making and stifle innovation. By adapting your structure, you can increase agility, enabling your company to respond quickly to market changes, embrace new technologies, and stay ahead of competitors.
But restructuring isn't just about bottom-line benefits — it also improves employee engagement. A well-planned restructuring process can lead to more fulfilling roles, greater autonomy, and a more transparent decision-making process. When employees feel valued and empowered, they are more likely to take ownership of their work, leading to higher productivity and morale.
In short, company restructuring is the strategic overhaul of how your business operates to foster growth, adaptability, and a stronger connection with your team.
It’s time for a different company structure
In the ever-evolving world of business, restructuring is a common practice. There are several reasons why:
- Adapting to market changes
Market conditions can shift rapidly, whether due to customer demand, industry trends, or economic factors. Companies need to restructure to remain flexible and agile, ensuring they can respond swiftly to these changes and stay ahead of competitors. - Innovation and technology disruptions
Emerging technologies can disrupt traditional business models, making it essential for companies to realign their processes and adopt new tools. Restructuring allows organizations to embrace innovation, integrate cutting-edge technologies, and streamline operations for efficiency. - Mergers or acquisitions
When companies merge or acquire others, their organizational structures often become redundant or misaligned. Restructuring helps to unify teams, eliminate duplicated roles, and create a cohesive structure that reflects the new organization's goals. - Improving financial performance
Restructuring can be a powerful tool to cut costs, increase operational efficiency, and boost profitability. Companies often restructure to eliminate inefficiencies, optimize resource allocation, and focus on high-growth areas, driving financial performance improvement. - Creating a better work environment
A toxic or rigid workplace can hinder employee engagement and productivity. Restructuring can foster a more inclusive and transparent culture by flattening hierarchies, empowering employees, and promoting collaboration. The result is a more innovative, motivated workforce and a healthier, more enjoyable work environment.
The best reason for company restructuring (according to us)
As we’ve seen, organizational restructuring can be about improving financial performance or adapting to market changes. But there's a better reason to adopt a new structure: to create a better place to work. A place where employees are valued and autonomous, where hierarchy isn’t in the way of growth. Restructuring can foster a more inclusive and transparent culture by flattening hierarchies, empowering employees, and promoting collaboration. The result is a more innovative, motivated workforce and a healthier, more enjoyable work environment.
Restructuring can clear the way for a more democratic workplace, where decisions are made collectively. Where every voice matters. It can also lead to more flexible work arrangements, allowing employees to work in ways that best suit their needs and lifestyles. And let’s not forget about fun — who says work can’t be enjoyable? Restructuring can help create a engaging work environment where people find more purpose in what they do.
Company reorganization can be a great way to build a culture of trust, responsibility, and freedom. By breaking down traditional hierarchies and promoting transparency, it empowers employees and gives them ownership over their work. This kind of culture not only boosts morale and job satisfaction but also drives performance and productivity.
How to restructure a company
It happens a lot in the corporate landscape, but restructuring a company is not easy. In fact, 80% of them fail. Breaking this process down into clear steps can help ensure success.
In essence, the restructuring process is a journey of transformation. It’s about navigating change with a clear plan, open communication, and regular reviews.
Why it's important to find the right structure
Finding the right organizational structure is crucial for a company’s success. Here’s why:
- Efficient decision-making. A well-designed structure helps businesses set up efficient decision-making processes.
- Clear communication. A good structure promotes clear and effective communication. It defines who reports to whom and eliminates confusion.
- Growth. Sometimes old structures are not ready to scale up. A new company structure can facilitate expansion better.
- Employee engagement. A structure that values employees and promotes autonomy can create a better workplace.
In essence, the right structure can enhance efficiency, improve communication, and foster a positive work environment. Cheesily, it really isn’t just about the bottom line. It’s about creating a place where people like to work.
Company restructuring: here’s where it often goes wrong
As you can see, when we look at company restructuring, we’re looking at changing the organizational structure. Often, especially when restructuring is done solely to improve efficiency and margins, the organization is considered a system. But aren’t they more like micro-societies? Or in the least, they’re dynamic.
When you look at the organization from a distance, it is easy to forget what drives it. Not the departments. They don’t actually exist, not physically anyway. They’re a concept.
It’s the people that work there.
So if you change the structure, what changes for the people? How will it affect their jobs? Who do they report to? What happens to the workload?
Too often, these questions are an afterthought. Some problems to overcome right before or during the execution phase. The teams are considered a form of the system (the organization).
Restructuring is not necessarily bad, but there are often downsides. Sometimes staff needs to be let go. Managers lose their ‘power’. Jobs change.
It helps if the strategy focuses on this more. When the consequences are clear, it is much easier to get everyone on board. It makes the process smoother. This builds trust, which is essential to make the transformation more successful.
You don’t have to be a corporate Don Quixote, we can help. Not in the restructuring itself, but in building a strong, autonomous team. Through our courses, you can learn how transform your organization or how to handle conflict better. You can also learn from organizations with innovative organizational structures, like Buurtzorg or Haier. You can build a well-founded strategy with this knowledge. And end up with the two-thirds that comes out on the other end better.