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3 Rules for Successful Restructure

Articles, Headcount Planning

Org restructures are here and as of early September, more than 41,000 workers in the U.S. tech sector have been laid off so far in 2022, according to a Crunchbase News tally. Tech companies as big as Netflix have cut jobs this year, with some citing the effects of the COVID-19 pandemic and others pointing to over-hiring during rapid growth. Robinhood, Glossier and Better are just a few of the tech companies that have restructured in 2022.

Restructuring is a frequent feature of the contemporary corporate environment, regardless of industry and the economic situation. According to a recent McKinsey poll, 82% of business leaders had dealt with restructuring in their present organizations. The most recent restructure, according to 70% of these CEOs, took place during the last two years.

There are many reasons for an organization to undergo some sort of restructuring. In the end, all of these explanations for corporate reorganization serve the same purpose: maintaining competitiveness in a complex and dynamic economic environment with evolving legislation and technologies.

The ideal reorganization approach for your corporation would support the alignment of corporate culture and talent with overall business goals.

Organizing in Practice

Reorganizations happen frequently in the modern business world. However, that does not indicate that they are always effective. In reality, the reverse is true.

Over 80% of restructuring attempts fail to produce the anticipated value in the required period, according to another McKinsey survey. 44% of corporate executives claimed that they never even completed their reorganizations.

When creating a successful corporate reorganization plan, firms should ask themselves a few crucial questions to address these issues:

  • Do we effectively communicate our plan, and do we provide employees the opportunity to offer suggestions for the best course of action?
  • Is our reorganization being planned with the future of the business rather than the present in mind? Are we preparing in advance for market changes?
  • Are the technological foundations for our restructuring strategy in place?

One of the most crucial elements in a successful reorganization is overcoming this last barrier to efficient technology integration.

Although traditional spreadsheets were once the primary tool for restructuring, Deloitte’s 2018 study on M&A trends revealed that more than 63% of companies were moving beyond spreadsheets and preferring cloud-based technology platforms to provide adequate reporting and integration to support the reorganization itself and continue HR-related operations long after. As a result of reduced costs, conflicts, time commitments, and the potential for human error, many people turned to new alternatives.

The 3 Essential Guidelines for a Successful Restructure

Several guidelines are provided by McKinsey for a successful restructuring using technology:

  1. Visualize global HR data: Create a precise, verifiable representation of your existing business, including its systems, procedures, and personnel. Visualize organizational information such as personnel profiles, reporting structures, linkages, and more.
  2. Utilize org chart metrics: Monitor staff roles, expenses, evaluate outcomes, and make future business plans.
  3. Reduce the dangers related to data integrity and talent loss: To maximize efficiency and strengthen your short- and long-term company plan, stay competitive with ongoing analysis throughout daily business operations.

Organizations may design, develop, and implement better-aligned team structures that support company strategy with the aid of Gemini. Throughout any reorganizational design process, the Gemini Scenario solution provides data aggregation, visualization and collaboration on restructuring.

Ready to Learn More?

If you’re ready to learn how Gemini can help you design and create the best version of your organization, contact us today to book a demo with our team.

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