For growing businesses, the words – recession, restructure, and redundancy can give business leaders anxious chills, closely followed by groans. However, they shouldn’t be words we avoid, and here’s why… Recession is a natural part of the economic cycle. Whether our economy is in recession, boom, or stability, the hard business decisions will always be there for business leaders.
Restructuring, redeployment, and redundancy can create reputation challenges and heartache. As soon as those words are mentioned, we immediately have inflammatory and nervous responses. We frequently associate restructuring with the assumption that a business is struggling and is having to make rash decisions to “slash” the payroll budget.
The very opposite is true.
Directors, shareholders, and managers are responsible for making difficult decisions in the best interests of the company in a constantly changing economic environment. The ability to adapt to the ever-changing macro business environment is precisely what differentiates businesses that thrive from those that struggle to survive.
You can be a good business leader AND have to make team members redundant.
Restructuring can be a financial decision made in the best interests of the company. It’s often needed to enable productivity, considering the wider economic situation. How you go about it will reflect on you and your leadership. It makes this all a bit personal, whether you like it or not.
In close-knit teams and growing businesses, your team members are more likely to feel like family, who are hard-working and loyal. This can make any change process a stomach-churning experience for everyone involved.
We are here to remind you that it doesn’t have to be all bad news. Every threat can be an opportunity for you and your team members.
Whether you are responsible for leading a restructure or facing possible redundancy when it’s done right, with clear purpose and respecting the dignity and mana of your team, there can be positives for everyone.
Regardless of the size of the business, uncertainty and emotions will be running high, and everything needs to be considered through a multidimensional lens—people, culture, financial, and legal.
Planning and communication are at the heart of positive, respectful change, and both leaders and employees need to maintain a strong connection with you, even when the future may seem uncertain.
Here are our top 10 tips for business owners and leaders contemplating restructuring their companies.
1. Understand Your Restructuring and Redundancy Obligations
First things first, get a clear understanding of your obligations as an employer and what it will mean for your team members. The devil is in the details. This isn’t just about the money; it’s also about understanding your legal and procedural obligations and epitomising your company values. This is your time to truly walk the talk as a capable, genuine leader.
2. Get your shop window sorted – “There is nothing to see here”
Gossip and misinformed hearsay can negatively impact future recruitment efforts and harm customer relationships for both employers and employees. Be sure to have your communications and relationships in order so the changes you make and the handovers happen with minimal impact on your reputation.
3. Know your numbers and where your IP is
As we’ve said, restructuring is usually a financial decision to protect your business’s future prospects. When doing your planning, ensure you have all the information about the costs and benefits of the proposed changes. You need to consider the impact of the loss of human experience or IP and have plans to mitigate this. Poor planning and risk mitigation now can lead to money being thrown at problems further down the track.
4. Get professional HR Advice
Getting credible, trustworthy employment advice early on will help you make well-reasoned decisions about your team structure and have a clear, accurate communications plan. It can be a tricky process to follow as an employer, especially when situations get emotional. Having expert objective support can be the difference between the restructuring being an opportunity for growth rather than a traumatic situation you and others take months to recover from.
5. The grief cycle
No matter the outcome, there will be a grief cycle at play. Understanding this will assist you in better understanding the emotional journey of restructuring, irrespective of the outcome for employers and employees.
Just as one navigates the stages of denial, anger, bargaining, depression, and acceptance after a significant loss, individuals faced with making changes in their business or hearing they might be affected undergo a similar grief process. Initially, there may be denial, a refusal to accept the financial situation or an impending job loss, followed by anger towards the situation. Bargaining may manifest as attempts to negotiate other options or find any means to avoid letting people go. Depression acknowledges the reality and gravity of the situation for everyone involved. Finally, acceptance paves the way for moving forward, enabling everyone involved to embrace new opportunities.
We are not saying employers need to hold an employee’s hand through their grief cycle. Instead, it is about ensuring there is a plan that assists in acknowledging this and appropriate support options for people affected.
6. Reflect with a development focus
This could be the perfect time to upskill or retrain team members you retain or those affected by redundancy. For those affected, you can put them in touch with subsidised services that assist with career planning and professional coaching. This can help mitigate negativity in your team and enhance your reputation as a great employer, even when faced with tough decisions. It is helpful to remind everyone that change brings opportunity if we all choose to see it that way.
7. You have made the changes – now what?
Employers often forget to have a change implementation plan and to get those handovers, customer introductions, or pesky job descriptions and process documents updated. Just because you have made the decision, done your communications, and had the farewell, the work doesn’t stop there.
Keep communication open and honest, ensuring that remaining employees understand their roles and the direction of the team moving forward. It’s also a good idea to provide support and resources to help people adapt to changes. This support can be upskilling, counselling, or other initiatives to foster a culture of resilience and innovation.
8. Pass the sleep-at-night test
Before you make the all-important decision(s) linked with restructures, we encourage you to pause, reflect and double-check your plans against your business’s goals and objectives. Then…sleep on them! Unless you face immediate financial repercussions, waiting one extra day to conduct this test is invaluable.
9. Review and learn
After any change process, it’s really important to take the time to review and learn. Some objective questions must be asked of your senior leadership team. Having an HR professional facilitate this conversation can be less confronting, as it can be a tough conversation, but again, the point is to learn and grow from it.
- Did we make good decisions?
- Did we get the best advice?
- Did we plan and communicate well?
- Did we lose critical experience or IP that then hurt the business?
- Did we achieve the financial goal and steady the business?
10. Adopt learnings into your team culture
If your review turned up some golden learnings, use these! These learnings could touch any area of your business, but adaptability and growth pave the path to success.
Restructuring, redeployment and redundancy, while initially daunting, can lead to new beginnings and growth. By taking these proactive steps, you can turn a challenging situation into a period of fruitful development and transition smoothly into your next chapter.
At Stapleton Consulting, we are here to champion you and your business through change. If you would like to know more about how we can help you through a restructure, get in touch for a coffee with Catherine and the team.
