Stuart Lindenfield explains why now is the ideal time for organisations to adopt a more efficient business structure and optimise their employee deployment philosophy.

A lean, efficient business structure and an approach that continually seeks to make best use of employees’ talents will give an organisation a much better chance of surviving this recession.

The tough business climate and bleak outlook has driven many organisations into streamlining their operations, reducing costs and seeking operational efficiencies. However, only enlightened business leaders and HR professionals 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.

Irrespective of the market conditions, 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 people? This is pure and simple good business practice and should be adopted by any organisation that is serious about being successful.

And when the upturn comes, the lean and efficient organisations will be better prepared and quicker off the mark in seizing the new opportunities.

Moving to a leaner business structure does bring headcount-related cost reductions, but to secure valuable performance improvements organisations need a detailed knowledge of each employee’s talents and potential, a clear understanding of precisely what skills and attributes the business needs to succeed, and whether there are gaps in the organisation that need to be filled.

Restructuring pitfalls

Restructuring is far from simple and brings considerable risks. If the internal communications and employee outplacement 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.

Studies have shown that poor internal communication during restructure can lead to the undesired departure of 25% of an organisation’s high achievers within 90 days of a major change being announced.

But when very tough trading conditions make restructuring a necessity, many organisations rush the process of identifying who should stay and who should go.

Ideally, organisations should regularly evaluate their staff and review their structures against the business plan and 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.

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

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 organisational damage 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’.

Business structuring ‘best practice’ is to engage all employees in 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. But this approach fails to consider what the business will 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 and 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 watercooler 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 and 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.

Stuart Lindenfield is head of the transitions practice at Reed Consulting and widely recognised as one of the UK’s leading experts on career management.