Step Up or Step Aside: The Impact of Restructuring
Filter tag: Change Management and Executive Outplacement, Culture & Organisational Effectiveness, digital transformation, Strategies for Growth
Over the past few months, several notable organisations have fallen into insolvency while many others have announced plans to restructure. Insolvency Service data shows that the number of company insolvencies has jumped by 72% in the past year. Other organisations have been issuing profit warnings to their shareholders, with new announcements happening daily. These developments follow a difficult period of reducing customer confidence, global supply chain disruption, rising inflation, combined with talent and skills shortages. On top of this this, there are those who are feeling the hangover from lockdown boom as consumers adjust their buying habits following Covid’s prolonged working from home requirements and rising costs of living.
In moments like these, the focus often shifts to the business, with leaders needing to make careful and difficult decisions on whether to adjust structures that might be undermining growth or change strategic direction towards some form of transformation. This may require reworking practices, introducing new technology and new operating models, rethinking customer segmentation, geography, making challenging staffing decisions, re-evaluating and redirecting investments, or a combination of these. Clearly, the primary objective is to safeguard the future of the business.
But when these moments strike, how do executives demonstrate value and the impact they can make? How can you become an integral part of a solution driving growth and setting the organisation up for continued success?
When the business takes centre stage during times like this, the focus is usually on the collective rather than the individual. No one is going to automatically push you up the ladder or carve out routes to progression for you. Promotions and pay rises are not guaranteed. The responsibility of managing your career has to be completely your own.
This can feel equally daunting and liberating. It also presents a choice. You can choose to become complacent and let the future happen, or you can seize control of your own destiny. Only by having a clear plan that puts your career into your own hands carving out the right opportunities for yourself do you give yourself the best opportunity to progress.
Being able to take initiative and inspired action whilst adding value and driving results will become critical. Restructuring challenges senior leaders to either step up or step aside. Rather than bowing out and accepting the latter option, most will look to take their career and their skills to that next level, whatever it might be.
Mindsets and Skills for Success
In the evolving environment, do consider setting yourself standards to make game changing, transformational career moves. It is important to think both internally and externally about your value and impact.
What can be done from within to make an impact? What external factors may be holding the business back, or influencing the conditions in which it operates? You must understand which challenges lie on both sides and how you should be equipped to help overcome them.
- Confidence, Communication, and Conviction: If you have ideas about how you can help the business progress where it’s clear a restructure is needed, now is the time to speak up. Do not be afraid to put your ideas forward and become part of a solution. Do not assume that others have noticed the same things you have. You need to be willing to be the person who points out flaws in the ‘as is’ status quo and who does not let complacency and comfort overrule progress. Some executives may feel they lack internal support during a change when the focus is solely on keeping the business on course, so they must therefore be willing to back themselves and become their own greatest advocate. That said, volatile times often create high stress and pressured environments where miscommunication may occur. The clarity and delivery of your ideas is just as important as the confidence with which you present them. Because of the pressures involved, you may need to navigate a wide range of emotions with the leadership team and stakeholders.
- Relationship Management: It is crucial to have a united front on the inside of the organisation. Alignment amongst team members is key to delivering transformation. Global research continues to demonstrate that most transformations fail because stakeholders are not aligned. Understandably, it may feel like ‘every man for themself’ as economic and operational uncertainties lead to stress and reflection. For leaders, it is important to gain an understanding of what your team’s personal priorities are in order to effectively influence them to buy into your organisation’s change and growth objectives. You need to get comfortable with wearing various hats simultaneously playing different roles with different people. With the board and C Suite, you may need to become an advocate for your team or an advisor. For your team, you should provide a stabilising force. With clients/customers, you offer a much-needed resource. As situations evolve, you will need to navigate these various relationships with tact, empathy, and sensitivity.
- Agility and Future Focus: We can expect the current volatility in market dynamics to stay for some time, which will require a willingness to adapt accordingly. We are in a new normal. Once today’s challenges subside, new ones will spring up in their place. It is likely that we will see an endless cycle of disruption that ebbs and flows, and senior executives must be ready to evolve and lead. That means developing the ability to adapt in real time while also looking ahead. We know current threats such as climate change and digitisation will remain for the long term, so it’s best to embrace them now. But it is not just our challenges that will change. We have already seen shifts with hybrid working, and our working models will continue to evolve. Expect to see rigidity and hierarchical structures challenged by these dynamics for more fluid ways of working that favour project-based and people centred leadership styles for maximum adaptability. Restructuring offers an ideal opportunity to adopt new practices that improve the business’s efficiency and profitability, so it is better to embrace agility now to set the organisation up for future flexibility.
- Customer Centricity: If you are not also considering how these changes will impact your customers, then the battle is lost before it has even begun. Every challenge your business faces trickles down to your customer through the products and services you are able—or unable—to offer successfully. Your customers must be at the very core of all the efforts that spring up from a restructure. Their needs should underlie every idea you propose. They should be at the core of all strategic conversations and inform any changes you make to your practices. The aim of a restructure is to make the business as efficient as possible and increase its profitability. It is ultimately your customers who will be impacted by these changes, and whose activities will make or break your efforts. Keeping their needs front of mind is non-negotiable.
- Digital Capabilities: Digital will underscore all of this. Digital transformation has accelerated and is increasingly critical for survival. Understanding the new tools in the market and having the capabilities to use them will be highly valuable. You may be tasked with adopting these tools in your role, introducing them to your team, or implementing them into your new, restructure-driven strategy. Fundamentally, digital capabilities are becoming much more imperative for current and future business success as most Boards will invest more in this area in the future.
With so many moving parts in the wider external market and within your own internal business landscape, making time to step up, take control of your career, and drive impact may feel a bit daunting. But if you don’t, then who will? Having command over your next move and honing the right skills will enable you to become an asset for business transformation and success and will demonstrate your continued value as business dynamics evolve and organisations transition from one phase to the next. Be willing to back yourself and put your ideas forward, because you just might have exactly the solution that a business needs to charge ahead.