Restructuring: Your People Make the Difference
As the COVID-19 pandemic takes its economic toll across economies and geographies, many companies are rethinking their licence to operate, restructuring their businesses, operating models, finances and workforces to emerge safely and sustainably. These actions, if not managed properly, can take a toll on all stakeholders and erode confidence in the company’s future. For many, the early days of a restructuring are simply about survival, but with effective communication and change management, these same companies may soon get back to thriving. The key objectives are to preserve essential business continuity, protect leadership credibility and earn the continued trust of stakeholders inside and outside the business.
This article discusses the people side of a restructuring and how pro-actively managing your workforce will allow you to implement restructuring measures faster.
Treating people with empathy and respect has always been a hallmark of an effective restructuring, but it has never been more important than it is today. Even as companies race to embrace their new realities, their customers are becoming more socially conscious consumers of services, regulators are applying new layers of scrutiny (particularly when government funds have been received) and rankings of employee satisfaction are distributed with increasing regularity.
Effective stakeholder management, communication and engagement are no longer nice to haves. They are essential business imperatives. Here are some of the people challenges and opportunities we see many companies facing:
- Time is short and everyone needs to do their part – now: The aim is to get your workforce across the business to understand what to do and what to prioritise – amid uncertainty, anxiety and change. Early and transparent communications as well as mobilising and equipping leaders, managers and other advocates to represent and cascade will be key levers for you to accelerate the implementation.
- In some geographies (notably in Europe), trade unions, works councils and other employee representatives will have already raised the temperature: Engaging them will be paramount to clear the way and ensure the business can adapt to the new new – in the short-term and long-term. The aim is to establish trust and connection and that is not something you can just wish for when you need it. It’s hard work that requires time and effort, transparent communication and a convincing story. It also means you need to manage redundancies or workforce changes in a way that is compliant with local legislation and ensures fair and appropriate treatment and consideration for all.
- It’s about the “what next” and the people you will need to rebound and build the future. Whether or not you’re maintaining or changing staff levels, you will need to adjust your organisation to ensure future continuity and growth. Managing and allaying concerns for staff, giving them confidence in the future and ensuring that you are supporting and enabling them to manage the transition as your company moves from merely surviving to thriving is critical. That will include change management, culture, ways of working, leadership style and a future vision that employees can buy into with passion and trust.
In our experience, clients’ benefit from addressing the People component through 4 aligned lenses. In each, we’ve outlined some essential practices and questions to consider.
HR Delivery: ‘Get it done, and get it done right’
- How will organizational structures change to align with your new strategic priorities? How will you assess and select talent for the go-forward organization is reductions are necessary?
- How rigorous and practical are your plans to adjust headcount and/or restructure? What are the risks to success?
- Have you put enough effort into retaining or optimising business critical skills and capabilities in driving the organisation forward?
- What do you need to do differently to progress quickly through people-related challenges while adhering to complex and varying employment law and best practice?
Leader and manager mobilisation: ‘Accelerate implementation across all teams’
- Do your leaders and managers have clarity on the overall plan, cutbacks and changes? To what extent did they have the opportunity to “own” plans for their teams?
- How confident are you that leaders and managers at various levels can act as role models in attitude and action during the restructuring?
- What channels exist to equip leaders and managers with messages and materials they need to communicate consistently and effectively – and to gather feedback as the process continues? Where are there holes that need to be filled?
- How much attention and training do they need from senior leadership to be effective?
Safeguard performance: ‘Protect the core’
- To what extent have you taken real care in meeting or acknowledging the needs of employees?
- How will leaders, managers and business partners from enabling functions support staff through uncertainty – how able are they to coach, manage and communicate in tackling loss of focus, confidence and motivation – and in inspiring and encouraging people to embrace change, however ambiguous?
- Do you have a compelling new vision for the future that takes you from survive to thrive? How can you rally your staff behind this and set the tone for the future?
- Are you putting change management practices in place to ensure your organization can adapt to its new ways of working, culture and organization?
Internal communications: ‘run the internal communications playbook effectively’
A stable internal public is the prerequisite for a calm, solution-oriented and successful restructuring process. With that in mind:
- Have you ascertained, rationally and emotionally, how employees will be impacted by the restructuring activities?
- What measures will you need to take to ensure that they are the enablers of the continuity and the re-start of the business?
- Have you developed a robust, measurable and multi-channel plan to inform, onboard and engage your workforce on why and what the reshaped future of the business means to them?
As with people, so with organisations and the people component of restructurings: Everyone is unique. Yet common to all is smart thinking, empathy and a need to engage and enable the right people, at the right time, with the right actions and narrative to drive momentum in the right direction.
Interested in hearing more? Please do contact us and we look forward to supporting you on your journey from survive to thrive.
Victoria Strachwitz is a Senior Managing Director based in Frankfurt with EMEA wide responsibility for People & Change. A leading change, organisational development and communications practitioner, she has led a mix of Restructuring projects in a variety of sectors – often alongside professionals from FTI Corporate Finance and other segments.
For further information, please contact:
Senior Managing Director
+44 7904 152 593
Senior Managing Director
+49 160 895 5855
+1 312 841 9645
SHANNON STUCKY PRITCHETT
Senior Managing Director
+1 212 850 5755