Line of Business: 

7 Reasons You May Have to Reorganize

By Emilio Marino

The world is changing fast. Executives are trying to keep up by applying their best thinking to the structures, systems, and process they need to compete. In theory, the best business structures will provide the efficiencies, innovation, and agility required to succeed.

The goal of organizational transformation is to align your corporate culture, structure, and talent with your business strategy. There are several reasons you may have to reorganize the operations or other structures of your organization, including the following scenarios:

1. Mergers and Acquisitions

Mergers and acquisitions (M&A) are common in today’s corporate world, where growth expectations are paramount. Any merger or acquisition invariably requires a restructuring exercise in order to eliminate duplicate work systems, incorporate preferences of new managers, and ensure consistent procedures.

2. Management Style

Organizational transformation enables companies to adapt to changing business conditions. Vertical management hierarchies are being replaced by simpler, more horizontal organizational structures. Adopting an agile, flat and open operating model requires a restructuring approach that facilitates departmental collaboration in a truly integrated manner.

3. Downsizing

As businesses adopt new strategies or alter their product mix, some staff are made redundant. In such situations, organizations may need to downsize their workforce through restructuring. During this process, job descriptions are reviewed and teams are reworked to ensure that the remaining workforce is able to complete required jobs without being overworked.

4. New Technology

Innovations in technology that influence businesses may require organizational transformation to keep up with the times. Changes that result from the adoption of new technology is common in most organizations. Leveraging the power of IT may initially require a complete redo of the current systems and practices. However, new technologies are more efficient and provide economical methods to perform work.

5. Business Direction

If one thing is for certain, it’s that change is constant. Because of this, businesses are consistently experimenting with new products, exploring new markets, and trying new go to market strategies on a regular basis. All of these initiatives require organizational transformation strategies. Thriving companies are those that recognize opportunities and needs, set clear goals, and develop comprehensive action plans.

6. Performance Gaps

If your organization’s goals and objectives are not being met, changes are required to close those gaps. Having identified the gaps, the next step is to look at possible causes for them. It is common that the gaps result from internal inefficiencies. For example, a lack of communication and alignment between departments. This type of issue can be addressed by reviewing and adjusting internal operations.  

7. External Pressure

External pressures can come from many areas, including customers, competition, changing government regulations, and other environmental factors. At times, these pressures may force an organizational transformation exercise in order to meet some legal or statutory requirements.

What are your options?

Even with advancements in technology and a focus on automation, many companies still rely on a significant amount of manual effort to manage their business processes and overcome current challenges; tools that are still commonly used include Excel, PowerPoint and basic charting programs. These tools are inefficient and prevent companies from keeping up with changing business conditions. As a result, companies experience significant productivity losses, slowed decision making across the executive team, and inaccurate data and information.  

Hanelly is a cloud based software solution that enables companies to quickly understand their current organizational structures and visualize the potential impact of their decisions though HR analytics while supporting key HR initiatives. Learn more about Organizational Transformation.

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