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Stuart Lindenfield from Reed Consulting explains why the current economic downturn is an ideal opportunity for organisations to adopt a more efficient business structure and optimise their employee deployment philosophy. Operating in difficult economies many organisations have been driven to streamline their operations, reduce costs and find operational efficiencies. However, organisations need to ensure that these changes are made with a clear vision on ensuring they will be ready to seize the opportunity when the economy moves out of recession. Minimising any damage to the organisation caused by the way it implements the slimming down process is important - not just by responsibly managing employee outplacement, but also by recognising the often immense impact on the 'survivors' and taking steps to address their issues. Enlightened business leaders will make a virtue out of this structure and employee utilisation necessity, and adopt these best practice principles into their organisational culture to their long-term advantage. After all, shouldn’t every organisation run ‘lean’, have a tight control on costs and an operating structure that is efficient, effective and makes the best use of its peoples' skills and talents? This is pure and simple good business practice and is potentially achievable by all organisations that are serious about being successful, not just those driven by necessity. Tough market conditions are an opportunity! When trading conditions are tough, organisations with a lean and efficient business structure and an optimised employee deployment philosophy will be much better placed to survive than their less well managed rivals. If organisations embed these lean business structures and talent deployment disciplines within their culture, when the upturn comes they will also be better prepared and quicker off the mark in seizing the new business opportunities when they materialise. The irony is that without the driver of a particularly challenging economic environment, very few organisations review their structure and how they deploy their people. As a result, most don’t know if their structures and people are best suited for the current market and also how appropriate they are to help the business achieve its future goals. Restructuring pitfalls The process of restructuring is far from simple however, and brings considerable risks. If the internal communication and employee outplacement processes are not handled well, they can have a significant negative impact on the organisation’s reputation, employer brand and the motivation and performance of the retained employees. This can also lead to the undesired departure of individuals the business really wants to keep - studies have shown that 25% of an organisation's high achievers will leave within 90 days of a major change being announced. When very tough trading conditions make restructuring a necessity, many organisations rush the process of identifying who should stay and who should go. As a consequence, this failure to consider all the relevant factors - such as what structure and which people, performing what roles, will give them the best chance of success – can lead to flawed decisions being made. Ideally, therefore, organisations should regularly evaluate their staff and review their structures against the business plan and the market conditions, so that they can make the necessary adjustments to ensure they have the most appropriate (efficient and lean) structures and people in place for the prevailing market conditions. Ripping out part of a team and expecting those left to automatically fit back together and function effectively, without special support and specific individual interventions, is naive. Moving to a leaner business structure does bring headcount-related cost reductions, but in order to secure valuable performance improvements, organisations need a detailed knowledge of each employee’s talents and potential and also a clear understanding of precisely what skills and attributes the business needs. Finally, as well as the functional and emotional concerns, restructuring can also present legal pitfalls - such as regarding BERR (Business, Enterprise and Regulatory Reform) notification and potential unfair dismissal. Business Structure and Talent Deployment Best Practice Decisions made in haste rarely turn out to be the best. Business structuring 'Best Practice' is to engage an ongoing process that continually maps employee performance and development against existing and projected business needs. When restructuring, most organisations look purely at their existing business - what structure and which employees will best support the current position. Significantly, this approach fails to consider: What will the business look like moving forward? What skills will be needed? Does the existing talent pool fill these requirements? Do additional skills and experience need to be brought in and how should this all fit together? The performers of today may not be the best people to add value tomorrow. For organisations navigating a restructuring programme, the following aspects should be considered: 1. Talent mapping Talent mapping provides a detailed picture of each person’s existing skills, development plan and future potential. This enables informed decisions to be made regarding which employees are best equipped to drive the organisation forward in a given situation, and also what additional training and support they might need. 2. Assessment & Selection for Restructuring and Redeployment Informed restructuring decisions should be based on past performance and an awareness of the personal capabilities, motivation, experience, knowledge and technical expertise required for future success. When these requirements are matched against the attributes of each existing employee, it is possible to identify in a robust and legally defensible way those individuals who should be retained. 3. Transition and Outplacement Organisations have a legal obligation to mitigate the impact of redundancy and help individuals re-establish and revitalise their careers, but typically they use a 'sheep-dip' approach to outplacement support - everyone gets the same support, regardless of need. The process could be so much more efficient, cost-effective and valuable if affected individuals were each handled based on their actual needs. Some people will only require minimal support, so why spend money on them when others need much more intensive support? 4. Enhancing Performance Restructuring can lead to a massive dip in morale and productivity. Watching their peers being ushered out the door and listening to whispered uncertainties by the water cooler is a far stronger communication than the merger press release or any announcement on the company intranet. Thorough transition planning can help improve the quality of immediate communication and enable line management to offer a more detailed and consistent set of reasons to support the change programme. In addition, the provision of outplacement support for individuals leaving the business has repeatedly been shown to reduce the undercurrents of dissent within the business. 5. Team building Once the structure of a team has been changed, it is important to re-form that team, establish a new way of working and a clear sense of purpose. Many individuals will also need to be encouraged to take a more active part in the direction of the team and to feel that they have a valuable contribution to make. 6. Development Planning & Coaching Following a restructure, affected individuals will typically reflect on what the restructure means for them and their future and the best way to develop their careers in the context of the new structure. In hard times and when the pickings are rich, the most successful organisations are those with a lean structure and talent management processes that make best use of their employees’ skills and potential. Now is the time to:
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