Managing transformation and restructuring with fairness: the key steps for getting started

Restructuring how to preserve motivation

How do you make a difficult transformation less painful and get people looking forward again?

2024 is a challenging year for the German economy. Many companies are under pressure to transform. One big name after another is in the headlines. Restructuring is everywhere.

In most cases, jobs are at stake. For some professions and industries, the situation must seem surreal – e.g., for engineers in the automotive industry. If anything has seemed secure for decades, it has been their jobs.

Uncertainty runs deep. Not just for those who end up losing their jobs – but also for those who stay!

For many, working for a traditional company is more than just earning a living. It is part of their identity. Restructuring therefore also leads to a crisis of meaning and confidence.

Thoughts go round in circles: “My company is not as secure as I thought. Will I be next? And why should I keep digging in? …”

People getting shock paralysed, just working to rule?

During restructuring, employees are more stressed than usual and significantly less productive. The only question is how much day-to-day business will suffer and how long it will take to recover.

Read this article to find out:

Which objectives are now a priority for companies in transformation?

  1. Maintaining productivity
  2. Talent retention
  3. Getting out of the doldrums as quickly as possible

One thing is particularly important here: preventing uncertainty from spreading.

Much depends on timing. Ideally, the transformation office should play a dual role from the outset, planning and implementing restructuring and transformation management in an integrated way.

Decisions need to be made not only about how many FTEs will be cut in which departments, but also when, how and by whom those affected will be informed – and how they will be supported in coping with the new situation.

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Possible actions and how they work together

The possible measures are many and varied, as a look at the Transformation Toolbox shows:

These measures are exemplary – there are many other tools. The key is to start early and to ensure continuity.

At each stage, the instruments must be orchestrated to form a complete triad. This triad consists of …

  • Information

  • Motivation

  • Empowerment

Transformation through dialog instead of rigorous restructuring

These tasks in particular have priority in the early phase:

  • Transformation story

  • Stakeholder analysis

  • Change impact analysis (change impact analysis)

Transformation Focus areas en

Feel free to download this overview and use it for your projects (just click on the image to open the PDF).

Let’s illustrate this with a few examples:

What is most important at the beginning of the transformation

The triad of “Communication – Motivation – Empowerment” must be coherent from the outset, i.e. geared to the specific needs of the employees.

1. Communication: Avoiding gossip and factionalism

There are two major pitfalls in communication: bad timing and haste. All actions should be carefully planned and never rushed.

What is the transformation story that the company is using to explain the urgency and next steps? Who will learn what, when and how?

Especially when reorganization decisions take a longer time, it is important to provide interim information in order not to fuel the rumor mill.

Example: Communicate immediately after the C-level decision on restructuring, ideally together with the works council – even if the details are not yet finalized. Otherwise, the information may leak out. The works council will then rightly criticize the board for not being transparent.

Best practice: Making communication a dedicated area of responsibility in the transformation office and providing information about the measures in close cooperation with the works council.

2. Motivation: Realistic assessment of the impact on stakeholders

A major change affects structures and day-to-day processes and therefore has a very direct impact on the lives of the people involved. Their economic livelihoods may not always be at risk – in many cases, personal career goals and cherished roles may also be at stake.

Example: A company centralizes its customer service. Tasks are standardized, job profiles change. Part of the workforce leaves. Of those who stay, many feel overwhelmed by the new processes, others are frustrated because their job now offers less variety. As a result, the service center is not as efficient as hoped. Customers are dissatisfied.

How can you avoid such failures? Two must-haves in the early stages of transformation are:

  • Stakeholder analysis: Which groups and influencers are directly or indirectly affected by the transformation? Who could actively drive the change, who might see their interests at risk and offer resistance?

  • Change impact analysis: This analysis looks at the specific impact of the change, e.g. on processes, systems, people roles and culture. In a next step, appropriate support and training measures are derived.

Best practice: Both analyses require experience and a minimum of time. It is therefore recommended to start as early as possible, interlinking both analyses.

3. Empowerment: Don’t leave managers alone

The only way to implement change fairly and transparently is to get managers on board. Not everyone will get the necessary tasks done intuitively. Not everyone is equally good at communicating, dealing with conflict and motivating their team under stress.

Example: A restructuring has been decided and communicated by the board. It is soon clear how many administrative jobs will be cut. Now, it’s the job of the head of department to call his team together and prepare them gently. But what is he doing? He is putting off this unpleasant task for far too long. At some point, the employees are told by someone else what is in store for them. Trust is shaken.

For things to go better, and for managers to fulfil their role in the transformation, they need to be involved from the start and empowered to deal with uncomfortable situations.

Best practice: Talk to managers and find out what support they need. If necessary, offer training and workshops on change management, communication and conflict resolution. Give managers as much specific guidance as possible on how to announce and implement redundancies, including how to conduct redundancy meetings.

Conclusion

In a difficult transformation, timing is everything. There is only one ideal way to avoid unnecessary stress and stabilize the day-to-day business: Combine restructuring and transformation management as closely as possible. So that your company really does emerge stronger from the change.

2024-05-02, grosse-hornke

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