Corporate restructuring is a long and complex process, which must be managed with great vigilance and caution, especially if it is deployed during a period of crisis or emergency. Here is an overview of the 5 pitfalls to avoid when restructuring a company in difficulty.
1) Waiting too long before restructuring your business
Financial difficulties, declining profitability, insolvency in the face of creditors, disengagement of employees or a loss of confidence from partners are all signals that should alert the manager to the possible need for a turnaround.
The first mistake is to underestimate the situation, and to postpone the restructuring for too long, whether because of denial, lack of hindsight or fear of having to make difficult decisions. Delaying a restructuring that seems inevitable risks aggravating the situation and requiring even more radical measures (judicial liquidation, redundancies for economic reasons, sale, insolvency proceedings, job cuts, etc.).
2) Not communicating about your corporate restructuring
One of the keys to the success of any profound transformation is effective and transparent communication, combined with active listening.
Indeed, restructuring is a difficult upheaval for teams. Hence the need for the company manager and the main decision-makers to communicate widely with employees, staff representatives, and partners (customers, suppliers, service providers, etc.) as soon as the restructuring project emerges.
Communication must be thought out, controlled and organized through regular meetings planned throughout the restructuring process. This will make it possible to keep employees informed, in real time and in stages, of the progress of restructuring operations, and in particular of actions that could have a direct impact on them (reorganisation of services, redundancies, job protection plans, redeployment, etc.).
3) Lack of rigour in your action plan
The restructuring plan must be drawn up carefully, after having carried out a complete audit of each aspect of the company’s situation. The various objectives listed must be marked out by Clear, time-bound steps. The Action Plan must also be rigorously monitored, which assesses the progress of the restructuring and ensures that it runs smoothly.
4) Not daring to renew
A restructuring does not always imply a radical change in the organisational model. However, it is essential to Questioning the entire operation of your company: internal organization, relevance of positioning, viability of the business model, customer satisfaction, competitive advantage, etc.
This step is fundamental to identify the real sources of malfunctions, and to implement corrective solutions. The other imperative is to review your model in line with the new requirements of the market, and to be able to discern obsolete practices.
5) Lack of perspective on the situation
Lack of perspective is one of the most common causes of failed corporate restructurings. L’ Emotional involvement, denial or fear are real obstacles to the smooth running of a restructuring and to effective decision-making.
Each decision must therefore be taken in an ultra-pragmatic way and with as much impartiality as possible. The mistake not to make is to let emotion guide decisions, and to lack perspective on the reality of the situation.
However, these mistakes are still common and are often difficult to avoid when the restructuring is carried out internally. This is why the most beneficial decision for companies in difficulty is to call on an interim manager.
Impartial, pragmatic, dynamic and a natural leader, he steers the restructuring with an iron fist, in order to ensure the survival of the company and preserve its competitiveness.
