Important Considerations For An Organizational Restructuring

An organization restructuring will create substantial impacts that can extend throughout the organization and also with external relationships.  It should be evaluated with great care.  When you consider a restructuring apply these factors:

Establish and document the reorganization’s objectives.  Documenting your objectives will help you to be clear about your objectives. What do you want to accomplish?  What is the expected impact on the organization?  Why are you doing it?

Where will the organization will be in 2-5 years.  You want to position changes to improve current operations and also take into consideration how the organization will soon be operating.

Alignment of current positions with organization strategy.  How are current positions aligned with organizational strategy?  Any changes should improve or not impair alignment.

Should the position or the incumbent change, or both?  It’s important to differentiate between a position’s responsibilities and authority and the person in the position. Does one or both need to be changed?  If it’s the incumbent that should be changed then you are not doing a restructuring.

Is it something else that should be improved, not the structure?  Consider if better  management practices, better business processes, or improved technology and applications will deliver the improvements you want.

Document tangible improvements, short and long term, resulting from any change.  Establish with rigorous analysis the actual results of the restructuring.  Be careful to not base your planned changes on desired outcomes, conjecture or hunches.  Too often decisions of this type are made because there is a desire to improve, without realistic knowledge of the actual primary and secondary results.

  • Develop criteria for evaluating alternatives.  This will help to ensure that your analysis is rigorous and consistently applied.

What is required, in addition to making the change, for a successful improvement to occur?  Rearranging certain positions may be required, but you should also determine if other improvements are also required for the changes to be fully successful. These additional changes could be modifications of business processes, positions or procedures in other areas of the organization.

Document the risks and problems that could arise from the restructuring.  All restructurings have challenges and risks, some of which can have a substantial negative impact if not identified and resolved or managed.

  • How will you ensure that you have identified all of the risks.
  • How will you manage each risk and who is accountable for managing each risk
  • Are there important strategic initiatives underway and will their success be impaired or improved?

Include all relevant decision makers.  It’s important that all relevant decision-makers are appropriately involved and/or consulted; also possibly key external stakeholders.

Also see “Implementing An Organization Realignment – Useful Guidelines” on this website.


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