Restructuring Your Business: When is the right time ?


Restructuring Your Business
A university professor of mine once told me There’s no book on that. Occasionally you simply have to get in and understand your way out. Knowing when to renovate a business is one of these things. Though there are books on organizational theory and team dynamics, there’s no text book out there telling us exactly when or how we should restructure our companies. And neither aspect should taken lightly since the process of reorganizing a business takes a lot of effort and planning by management to execute well. Fortunately, there are signs we as managers should watch out for which might help us identify when it’s in fact time to restructure our business or organization. 

Why Restructure? Before we get into the signs that say it is time to restructure the business, lets first examine why we should even bother. The answer is straightforward! things change. The ultimate goal and purpose of any business reorganization is to either plan, accommodate or react to change. Usually, those changes will reside in our market, the economics, or our competition. As a simple example, if our competitor suddenly invests heavily in improved Research and Development, we may find it necessary to create our own R&D group to help us keep up with the competition. 

RELATED: Is Your Research and Development Under House Arrest? Eventually, restructuring is a necessary process our companies will need to go through every once in a while, in order to react and accommodate changes in our marketplace. But we should be cautious in how we go about it the bigger the change, the more planning and communication we need to implement and execute. Before you start making changes, you may like to check out our article on how you restructure the organization. When to Restructure a Business – If we’re waiting for an e-mail with the theme line Its Time to Restructure, we’ll be waiting a while. 

Whilst it might not come directly to our inboxes, there signs to tell us its time to restructure or reorganize our business. Reason 1: It Just Doesn’t Work – Some time ago, I attended a leadership seminar through which one of the presenters spoke about organizations. At one point he said Your organization must drive your success. Too much or too little of any one thing throws the balance off and hurts the entire system. And if we try to measure everything in the company, well suffocate from data, and let our competitors will pass us by. But all of that said, if things aren’t working, we need to spend some time understanding why. Then, we should begin making changes. Reason 2: Communication is Breaking Down – If organizations are an ecosystem, communication is the water that all living things need to survive.