These days, one of my friends who is in charge of an inefficientcompany, complained to me of making important business decisions to restructureher company. I believe through her competence and communication skills, she canovercome this obstacle.
However, as a friend, I want to give her some advices.
First of all, think carefully. A bungled corporaterestructuring can turn a good idea into disaster. As the high-top of thecompany, you should know exactly the challenge, problem or opportunity that youcompany faces. You can then come up with approaches and barriers.
Second, execute harshly. You can pilot some programs tosee the value created from the restructure. You can split off one departmentwhich is overloaded or combine two departments which have duplicated functions.If you cannot solve problems alone, you can consider merger with another partner,because it is an opportunity to both reduce operating costs and achieve animportant strategic objective. If you want to reduce the cost alone, you canconsider downsize the departments by lay-offs. You should include the redundantpackages as one of the cost. As she is shifting from a labor-intensive marketto a more promising but less labor-intensive business, she need to downsize hercompany by laying off workforces.
Last but not the least, you should know when to trigger. Inorder to solve the long-standing financial problem, you need to know when totake drastic and sufficient measures. Some research suggests that voluntary orpreemptive restructuring can generate more value than restructuring done underthe imminent threat of bankruptcy or a hostile takeover.
I know downsizing a company brings the manager with formidable challenges, e.g., headcount, departments, and timetable. Sometimesyou should make an argument on who and when, and how to manage the company'srelations with the remaining workforce and the press. Even when conventional strategiesare ineffective in a restructuring, sometimes you should work out a morecreative strategy.
