Why a Business Restructure doesn’t have to be Negative

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business

The words ‘business restructure’ are often enough to send shivers down the spines of middle-management. They’re often associated with brutal cutbacks, redundancies, and difficult conversations. Moreover, they often come about because a business finds itself under financial duress. When times are tough, tough decisions need to be made. This is especially so in the age of Covid-19, when businesses have found themselves having to make painful decisions and, often, cutbacks.

Of course, just because a process is painful doesn’t mean that it isn’t worthwhile. Plus, some short-term pain can often be preferable to a protracted demise. With that said, it’s often worth framing the process of a business restructure in a more explicitly positive way – if only to get everyone on board.

With that said, some departures are inevitable. In a recent blog, RSM International have commented: “The retailers who are still enjoying success have done so through using the current landscape as an opportunity to streamline or reduce the number of outlets or stores. This is not without some negative consequences, as a reduction in locations will have meant cutting jobs and losing staff.”

But not all of the changes need to involve sacrifices. Among the most obvious and fundamental changes that’s occurred as a result of the pandemic is the shift toward remote working. And many organisations have learned a great deal in the process, and come to recognise that they can still maintain high levels of productivity and efficiency while keeping offices clear. This may lead to a fundamental change in culture, where office spaces are downscaled, and workers are granted greater freedom to work at home, only coming into the office for essential meetings. 

This shift would have severe consequences for businesses which rely on passing trade in busy city-centres. RSM notes that “People working from home more will certainly affect day-to-day retail operations, as well as service-based industries that are predicated on people buying food and beverages during the day. Pop up coffee houses, independent bakeries and similar venues are likely to feel this impact in a significant way.”

A restructure might be motivated by reasons other than a global pandemic. A business might seek to grow rapidly via a merger or acquisition, or to reduce risk by splitting a potentially tricky part of the business into a separate subsidiary. Certain kinds of family-run business might put into place new structures to ease the transition from one generation to the next while still keeping operations tax-efficient. Loyalty might be fostered among employees by shifting to a more employee-owned model, where everyone is granted shares.

If it’s clear that restructuring is necessary in the long-run, then it’s best to make plans for one sooner rather than later. Plans might be made for a range of contingencies, to prevent difficult decisions from being made in haste. These plans might be put into action when the next crisis arrives!