Five steps to restructuring a company

When a company is no longer profitable, does not meet its business objectives, or encounters human, financial or operational difficulties, a restructuring may be necessary. This process is divided into five key stages.  

Step 1: The awakening phase

The first step in the restructuring of a company in difficulty is the awakening or awareness phase. It is a question here of making sure of the necessity and the stakes of the transformation. As soon as the first warning signs appear, bring together the company’s decision-makers and main department managers, and take stock, in an exhaustive manner and with as much impartiality as possible, of the problem encountered: crisis situation, disengagement of employees, drop in productivity, cash flow problems, drop in sales, ineffective marketing strategy, etc. This audit must be carried out with a great deal of distance, pragmatism and neutrality. It must cover all aspects of the company, from strategic orientation, internal structure and organisation to operational, human and financial management. Identify the various dysfunctions and then begin designing a customised restructuring plan. This will allow you to identify the objectives and the resources available to achieve them. Given how difficult it can be to sit back and reflect on a situation and the problems encountered, calling on an interim manager, an expert in business restructuring, can prove very beneficial. At WAYDEN, our interim managers have more than 15 years of experience in this type of mission and are specialised in your sector of activity. They can assist you in your corporate restructuring, whatever the extent of your financial difficulties.  

Step 2: Announcement of the corporate restructuring

The second step in a company restructuring plan entails communicating the approach to the different actors in the company (managers and employees), and outside the company (customers, suppliers, carriers, service providers, partners, etc). It is important to anticipate the emotional impact of the changes deployed. Indeed, a restructuring can lead to more or less radical decisions linked to the turnaround plan: economic layoffs, relocation, job cuts, judicial liquidation, reclassification, transfer, merger-acquisition, closure of subsidiaries or production sites, Employment Protection Plan (PSE), conciliation procedure with creditors, collective procedure such as a judicial reorganisation, etc. These different transformations can turn the daily life your teams upside down, hence the importance of accompanying employees in the transition. To do so, share your restricting plan and the reasons behind it, while insisting on the long-term benefits. Make sure you build and convey a strong, clear and inspiring vision. You should also give thought to the feelings of stress, disappointment, panic, disengagement or resistance that the announcement may generate. It is essential to give teams the opportunity to express their fears in complete confidence and to provide them with clear and reassuring answers. Finally, make sure that all of your managers understand the ins and outs of the change and that they feel concerned and reassured. This step is decisive because the success of a company's restructuring depends in large part on the involvement of all its employees.  

Stage 3: Deconstruction of the old model

The deconstruction phase refers to the disintegration of the company's old organisational model. All former practices, ways of thinking and strategies that you have defined as irrelevant or obsolete must disappear. Again, this stage, which marks a real cleft, can be a great source of stress and loss of bearings. In order to calm minds and ensure that everything goes smoothly, you will have to accompany your teams very closely, on a daily basis.  

Step 4: Business reconstruction

The deconstruction phase gives way to the reconstruction phase. This is when you will implement your new organisational model. You must ensure that the model is applied at all levels of the organisation: at management level; in the reorganisation of departments; management style; operational efficiency, etc. To ensure the successful implementation of your restructuring, conduct regular performance monitoring and careful evaluation of the commitment and well-being of your teams. Accompany your employees through this change by helping them find their feet and adapt to the new ecosystem.  

Step 5: Integration and adjustment

This final phase is the progressive integration of the new organisational model. It is important to note that restructuring operations often take place over a long period of time. They do not end at the precise moment the new model is implemented, but must instead undergo a long integration and adjustment phase. During this period, it may thus be necessary to deploy certain corrective actions if the results have not met the objectives.  

An interim manager to steer the company's restructuring

As with any profound transformation, corporate restructuring is delicate and complex, especially if it is implemented during a crisis period. It is often the subject of heavy and difficult decisions.  However, the lack of discernment and the emotional involvement of the company manager can represent a real obstacle to its restructuring. The safest way to save a company and preserve its market competitiveness is to call on the expertise of an interim manager, the only professional qualified to drive such a project for companies in difficulty in the most complex environments.