The Sin of Overlooking Business Restructuring

Overlooking business restructuring when a company is doing well is a huge mistake.

Let’s think about that. We all know about business restructuring, especially now at the start of a new year when managers and directors take a hard look at their budget to decide who stays and who has to go. There is a problem with this behavior, because it suggests restructuring is about the money (it *is* about the money, but it shouldn’t be the catalyst that companies wait for to act). So if the business were doing well, no one would have to be “restructured” into unemployment. Waiting to reorganize a company until it is performing poorly is the sort of reactionary decision-making that puts companies in awkward situations (think: Netflix’s attempt to split its DVD service).

What Should Business Restructuring Mean?

I believe in restructuring not as a euphemism for layoffs, but as a core tenant in every business model. We obviously recognize that as technologies change daily operations will develop redundancies, so positions that were vital five years ago may not be so important today. However, we should consider the benefits the individuals behind those positions could bring if drawn into other segments of the business. These are individuals who have stayed for five years, who have developed insights to how things are run, and likely desire to do more but haven’t the opportunity to try. Blanket layoffs do not solve problems. It may temporarily bandage the balance sheets from a gushing wound, but it does not address why a company is less competitive.

Instead of waiting for technology to create redundancies, I posit that every business should aim to reallocate its resources every year, perhaps even every six months. Why? Well, let’s ask ourselves a few questions about the role of regular maintenance in our lives.

Not Waiting Until a Problem Becomes a Crisis

Does one ignore the dentist when told to go back in six months for another cleaning? How about the mechanic who recommends a tuneup and oil change every few months? And an airplane? They are checked prior to takeoff. In these examples, it is understood that regular maintenance is the best method to prevent more serious problems. Should businesses be any different?

Let’s look at the symptoms: List of companies laying off employees, apparently because Barak Obama was reelected.

Laying off due to a poor economy, or because someone was reelected, or because the company has had a bad quarter are equally poor reasons to let people go. The economy doesn’t go from good to bad from one day to the next, a president isn’t elected without prior knowledge of his candidacy, and a bad quarter can be spotted months in advance. The point is, these are all examples of companies that have chosen to react instead of plan ahead.

We are not living in a world where static, unchanging companies pave the way to the future. Dynamic environments where resources can be shifted and adapted at a moment’s notice should be the norm and the way businesses of all kinds operate. People are smart, ambitious, and informed. They have an earnest desire to contribute to a company’s bottom line, but they also desire engagement. Fortunately, the two do not have to be mutually exclusive.

Regular dosage of the good kind of restructuring can keep employees engaged, prevent managers from growing complacent, and keep the company moving in a forward direction. Business restructuring would become something everyone looks forward to.