Home > Restructure need not be a DIRTY WORD

Restructure need not be a DIRTY WORD

Editorial
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The mining industry is experiencing an unprecedented number and variety of challenges, as we face what could be the end of a decades-long commodities boom.

Taxes, consolidation, fluctuating workforces and an increasing cost of doing business are all taking their toll. 

Challenges may cut across the need to refocus strategy, make significant investments in system change, change tack to ensure competitiveness and grapple with the need to retain an engaged workforce. 

One of the major 'go to' responses from companies facing this much change is to undertake a restructure.

While employees often regard restructures in a very negative and threatening light, many executive management teams and investors, such as private equity firms, are prone to see them as a panacea for all that ails a company. 

Neither point of view is taking in the whole picture.

The fact is restructures are often necessary for the survival of a business and can result in an improved workplace if planned and implemented well.  

However, they also involve risk and those seeking quick remedies should know that even the smallest of changes to company structure can have major repercussions.  
 
Poorly handled restructures can result in the loss of the talent you most need to retain, high turnover, low morale, decreased productivity and cripplingly bad public relations from which companies struggle to recover. 

Before embarking on any kind of restructure, companies need to determine if it will actually help them achieve strategic goals.

They then need to pinpoint impacts at every level of the company, and decide on ways to manage those impacts. 

While companies cannot afford to shy away from tough decisions they should understand how a restructure affect people, particularly staff whose skills are critical to the business.

Additionally, consideration should also be given to how the restructure affects the business culture and team performance, safety, the work environment, business processes and IT systems and external relationships with unions, contractors, suppliers and the communities in which companies operate. A thorough impact assessment is critical. 

Change2020 has advised on major restructures in the mining sector, working closely with clients to understand the impact of a new structure and helping them prevent unforeseen contractual issues, community relations issues and even unfair dismissal claims.   

In this way, an external change management expert can help a business review its current structure objectively, without being captive to internal politics, as well as provide advice on how the new structure can support its strategic goals and help expedite those changes being cognisant of the risks and impacts.  

Once the decision to restructure has been made and the impacts considered, the company needs to identify the necessary steps and put a project and implementation plan, which includes the critical component of communications in place.  

Well considered communications with employees is particularly important. Hopefully the bad old days of retrenching people by text message or informing them via email that their leader has abruptly departed and the reporting lines will change are mostly over.

But any uncertainty can lead to enormous people and productivity issues as nervous employees sit around having coffee and talking about what the change may mean for them. 

The end goal is to get through change as quickly as possible so a company can embed new ways of working and perform at its optimal level. If planned and executed well in a pragmatic, firm and fair way, a restructure can be hugely positive for a business and its employees. 

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