Once a business begins to exhibit signs of difficulty, its directors must act swiftly if they wish to execute a successful restructuring. The duration of the procedure varies from transaction to transaction, and tends to be lengthier if there are several parties or jurisdictions involved. As parties become used to evaluating the various possibilities, however, the general trend is for restructurings to be finished sooner rather than later. In this article, restructuring process, we take a look at the process involved and the options available to you.
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What are the steps involved in the restructuring process?
- Define the need for restructuring
The first step in a company’s reorganisation plan is to determine why senior management wants to restructure. Without a knowledge of the company’s new direction and a clear definition of the problem it hopes to solve, there is nothing to lead the reorganisation process and no way to evaluate its success.
The business strategy will equip you with the goals or criteria that this company restructuring plan must achieve, if it is even feasible.
- What does the company do well and not-so-well?
Determine the strengths and limitations of the existing organisational structure. With the company strategy in mind, you must evaluate where your current organisational structure fails to fulfil company objectives and where it succeeds. If you haven’t already, construct an organisational chart to gain a bird’s-eye view of your company’s current structure.
The analysis of this organization’s structure should include the collection of feedback. Too many organisations design restructurings without considering the individuals who will be affected by departmental and enterprise-wide restructuring. It is your responsibility to gather your employees’ thoughts on what isn’t working and what you should continue doing, and to include them into your company’s restructuring process. However, it is easier said than done. Employees may be hesitant to provide input on a corporate restructure if they do not believe that their complaints and suggestions will be treated seriously and will remain anonymous. It is your responsibility to cultivate an atmosphere where employees feel their opinions are respected. Consider distributing an anonymous poll asking respondents what they would alter and how they would handle a firm restructuring.
During the restructuring planning process, it is also vital to listen to key stakeholders and rely largely on human resources.
Ensure that the benefits or profits of a possible restructuring are weighed against the associated risks, such as personnel departing due to organisational change. If the issue cannot be resolved through restructuring, do not attempt it. It is a waste of time and a potential loss for your business. Getting buy-in from the staff is crucial to the likely success of your plans.
- Collate all the information and create a new company structure
It is time to build a new organisation model after identifying the issue with the current company’s organisational structure, collecting feedback from employees and key stakeholders, and analysing all existing job roles. Remember that this newly reorganised model is simply an initial draught; it will and should be revised prior to implementation. This new organisational structure should show the vertical and horizontal lines of authority, heads of departments and also define organisational functions and their links
Creating an organisational chart is the easiest approach to visualise the layout and interdependencies of your new organisational structure while you consider reorganisation choices. Do not undertake a corporate reorganisation without a graphic representation to convey your plan to employees and keep everyone on the same page.
- Let everybody concerned know about the new structure
Prioritize communication and transparency during your company’s restructuring process; again, an organisational chart may help create clarity in this case, especially when paired with duties for each function. To ensure they will be able to answer questions and assist with execution, you may need to interact separately with managers and anyone with direct reports.
The successful completion of a company restructuring from start to finish requires the participation of all interested parties.
- Implement the restructuring plan.
The time has come to implement the corporate or departmental restructuring. Remember that change can be challenging; give staff time to acclimatise to the restructuring in order to accurately assess its effects. Consider your business plan and make adjustments if the new organisational structure does not achieve your ultimate objectives.
How we can help
We have a proven track record of helping clients deal with the process involved in company restructuring. We will guide you diligently and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting. You can read more about the range of corporate services we offer by clicking here: https://blackstonesolicitorsltd.co.uk/corporate-legal-services/
How to Contact Our Corporate Solicitors
It is important for you to be well informed about the issues and possible implications of a restructuring strategy. However, expert legal support is crucial in terms of ensuring your business is set up correctly.
To speak to our Corporate solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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