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Why restructuring alone won’t improve performance and what to do instead.

Despite 2023 being only weeks old, nearly 15,000 jobs have been lost in the retail sector so far in 2023.  Figures released by the Centre for Retail Research (CRR) show that the majority of job losses were due to cost-reducing programmes and restructuring operations. Consulting firms McKinsey and KPMG have reported job cuts this month, and Ford have announced job cuts and a major restructuring programme across their European businesses.  It seems that restructuring and organisational transformation programmes are picking up to improve performance and efficiency.

 

But changing an organisation’s structure and people’s roles and responsibilities alone is not enough to improve performance.  Productivity, efficiency and performance is more about HOW people work together, rather than WHAT they do.  In this blog, I’ll explore why restructuring alone won’t improve performance and what to do instead.  So as well as considering the knuts and bolts of the restructure, here are four other areas HR professionals also need to address for the performance and productivity to come!

 

  1. Create a Clear Direction or Vision

 

Restructuring creates confusion, uncertainty and even fear.  Employees who are unsure about the direction of the organisation are less engaged, less motivated and less productive. During a time when engagement, bravery and a desire to step into the unknown is most needed – a sense of instability and lack of trust in leadership can prevail.  

 

Instead, organisations should focus on developing a clear strategy and vision for the NEW organisation post restructuring, and communicate this effectively to people. This can help to create a sense of purpose and direction, and provide people with a roadmap for achieving organisational goals.

 

  1.  Create certainty around roles and responsibilities

 

We know from the work of David Rock that human beings need certainty and autonomy to feel psychologically safe and do great work.  By its very nature, a restructure changes people’s jobs and responsibilities, increases uncertainty and often means people have less autonomy as they wait for the dust to settle. 

 

As soon as possible, provide this clarity to people.  This is more than just a job description, this is more akin to Reboarding someone – the concept of Onboarding for existing employees.  For the individual their understanding of “how I get things done around here” has gone; just like a new joiner to your organisation.  And we know that new joiners need more than just training for skills development.  Consider how your people will understand what their new role entails, who their stakeholders are and how they work collaboratively to achieve theirs, their teams and the organisation’s vision.

 

  1.  Rebuild trust and rapport with colleagues

 

Yes – I am assuming that trust and rapport is not there post reorganisation.  People are more likely to have new colleagues, new responsibilities, and new ways of working.  In this Knowledge Economy work gets done through relationships, no single person is responsible for delivering the customer/client’s solution.  It’s always a combination of several people’s input and a variety of different skills and capabilities.  Often meaning a multi functional team effort.  

 

If we manage those multi-functional teams in their functional silos (which traditional organisation structures revolve around) then we have to work harder to build connections of trust between those functions.  And following an emotional experience of a restructure, people are likely to feel unsafe and hunker down into their own safe spaces and groups.  

 

It takes effort and focus to build these trusted connections and make work flow once again.  Build skills such as listening to understand, being curious, and empathy.  All critical for building trust and rapport between people.

 

  1.  Help people learn about their unique skills and capabilities (and how to apply them)

 

We know that people do their best work when they use their strengths, skills and capabilities.  They are more likely to enjoy their work, perform better and go the extra mile – they find their work more intrinsically motivating.  But many people struggle to describe their strengths and skills – it can take a lot of insight and self awareness to do this.  But by helping people Know themselves better, we increase self awareness, emotional intelligence and self worth – we help them understand their authentic self.

 

That produces insight – that light bulb moment inside our heads when things fall into place.  

 

Post restructure, when the future is unclear, roles and responsibilities are unclear and trust is low – knowing your unique skills and capabilities and how you can make a difference, can start to bring some certainty.  Think about the SCARF model – if certainty is low, autonomy is still difficult, fairness is challenging; providing Status through affirming skills and capabilities and Relatedness through building relationships can help increase psychological safety.

 

Work carried out by Dan Cable and his team found that shaping onboarding activities around the individual, had beneficial effects on employees’ attitudes at work, such as their engagement and job satisfaction, and

also reduced turnover and enhanced performance.  The same can be applied when people move into a new role post restructure.  Shape work specific activities around the individual’s skills and capabilities, could produce similar results.

 

So to summarise, restructuring alone won’t improve performance. While restructuring can be an effective way to improve performance and efficiency, it must be accompanied by measures to support people and teams. You can take steps such as providing clear direction, creating certainty around roles and responsibilities, focusing on trust between colleagues and aligning people to work that uses their skills and capabilities.  If you don’t do this, then you’ll miss much of the return on investment spent on the original restructure.  Remember – we don’t refer to the fourth industrial as being people powered for nothing.

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