Transformations fail because change management is only seen as a building block for the duration of the restructuring project, says Martina Rauch from cetacea. She describes the “must-haves” for a sustainable restructuring success.
Restructuring is now a permanent condition in many companies. However, they fail more often than is apparent from the outside – not because there is a lack of economic competence, but because the human factor (i.e. the “people dimension”) is not given sufficient consideration in one of the most critical transformations a company has to master.
They also fail because change management is only seen as a building block for the duration of a restructuring project. And, they fail because management does not recognize restructuring as an opportunity to further develop the corporate culture for the desired realignment.
The problem is the approach. In many cases, restructuring is prepared for months in a small circle – usually with consultants – in top secret and is therefore already mentally implemented in the minds of management before the actual implementation begins, which usually takes much longer than planned because managers and employees are not involved in good time and therefore do not support the necessary changes.
Restructuring means change
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Regardless of the area in which restructuring is required, it usually results in significant changes for all those affected. Change stress arises because the organization is no longer in the initial state A and not yet in the target state B and work processes, roles and responsibilities are often unclear in between.
This increases the susceptibility to errors, reduces motivation and therefore productivity, increases uncertainty and frustration and, in the worst case, even leads to internal or actual resignations. Loss of trust and reputation among external stakeholders due to rumors and speculation about the progress of the restructuring often exacerbate the situation.
Increasing pressure to act
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Last but not least, the pressure on management to act increases as a result of the growing challenges over the duration of the restructuring process, while at the same time the scope for action is perceived to be shrinking. Is it really? Or does restructuring not in fact open up the scope for action? Doesn’t restructuring particularly depend on good management? And don’t good managers today have to be excellent change managers first and foremost? I think so! Because change is almost part of a manager’s “daily business” today.
“Must-haves” for sustainable restructuring success
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Professional, well-planned project management is a must and a matter of course – especially when it comes to restructuring. However, the rapid development of a promising restructuring concept, a sensitive management approach, governance, flexibility in implementation and proactive, transparent and trust-promoting communication are also part of this and are the key to successful change.
Other “must-haves” for sustainable restructuring success are
A comprehensible and attractive vision of the future that goes beyond the targeted financial figures and illustrates why it will be worthwhile for employees and managers to follow the management on a difficult path – and to accept possible personal losses or additional work in the process.
Identifying fears and resistance and dealing with them correctly (listening, taking them seriously, resolving or minimizing them).
Creating the necessary acceptance for change measures by making processes comprehensible and informing those affected early and continuously.
Actively involving as many people as possible in shaping the necessary changes in order to increase the momentum of implementation and achieve a broader impact within the organization.
The internalization of new workflows and processes, their meaningfulness and advantages over the previous ones, both on an individual and collective level, as well as the flexibility to adapt processes that no longer make sense if needed.
Empowering and supporting managers in their roles as drivers of the necessary changes and as motivators and coaches for their employees.
The development and further development of a future-oriented corporate culture with the active support of management and executives who act as role models and set an example of change.
The creation of an environment that supports change, even beyond the restructuring project, in order to permanently increase the willingness to change within the organization. Because the next restructuring is sure to come!
Learning curves for the future
However, theoretical knowledge of the “must-haves” for successful restructuring says nothing about their implementation in practice. Because every restructuring is different. And with every restructuring, problems very often arise that were either not taken into account in the planning or could not be taken into account, as the last two years have shown us very clearly with their unforeseen or unforeseeable multiple, overlapping crises.
The advantage: companies have learned. Their change competence has grown and continues to grow – as has the realization that professional change management is just as important for restructuring success as professional project management.
Martina Rauch is a partner at the management consultancy Cetacea and its subsidiary Global Organizational Integrity Institute (GOII) in Munich. She has more than twenty years of experience in the fields of corporate communications, marketing and public affairs. In management positions at large international family businesses and a corporation, she has helped shape several transformation and restructuring programs as well as initiating and leading CSR and sustainability programs.
