The top 3 mistakes SMEs make when restructuring and how to avoid them.

Restructuring is one of the most significant projects small or medium-sized enterprises can undertake. Your people bill is one of the biggest overheads and making sure your structure is the right size and make up for your current and future business is vital to making sure that investment pays off.

A well planned restructure can streamline operations, improve the customer journey and collaboration and set the business up for sustainable growth. But when it is rushed or poorly managed, it leads to confusion, loss of key talent and becomes a costly disruption.

Whether you are a HR professional, project leader or project manager responsible for guiding your organisation through this type of change, understanding some of the common pitfalls will make your life easier. At Snow Limits Consulting, we combine project management and change management expertise to help businesses restructure with clarity and confidence.

Here are the top three mistakes we’ve seen SME’s make and we share some helpful tips on how to avoid them.

No Clear Strategic Purpose

The mistake:

Many restructuring projects being reactively often in response to growth pressures, leadership changes or cost challenges. Without a clear understanding of the ‘why’ of your project, the restructure won’t land when you come to communicate with stakeholders and employees and it risks becoming a reshuffle rather than a meaningful transformation.

We often see the first version of a new organisation structure that reduces the headcount of those delivering the work, reshuffles the management team, and increases their salaries, which wipes out 50% of the perceived cost saving.

This happens because the understanding of the why isn’t clear.

How a project leader can avoid this pitfall:

Start by asking what problems are we solving:

• Is the project about headcount reduction?

• Is it about cost saving?

• Is it about increasing leadership capability right now or is it about investing in developing this over time?

Then:

• Work with the team defining the new structure to create a clear why.

• Use commercial data and insight to shape decisions e.g. what is your people cost as a % of your sales and how has this changed over time?

• Align the structure with the business strategy, not just operational pain points.

• Define measurable outcomes e.g. quicker decision making, reduced duplication, automation etc. 

Overlooking the Human Side of Change 

The Mistake:

Restructuring is about people, not just positions. Whilst designing the structure you need to look at the business needs and what positions are needed regardless of personalities. However, once you have defined the structure, neglect the people impact at your peril.

We’ve been involved in projects where they were just about to hit the go button, but hadn’t assessed the impact on individuals. Without understanding the impact, you can’t identify where you will encounter resistance, where key talent may be at risk or if your proposal wipes out all your marketing people because the proposed new roles aren’t where their expertise lies.

This is hugely risky and if you go ahead without understanding this chaos will ensue. The first question employees have when you announce a restructure is what does it mean to me. If you can’t answer it you will negatively impact engagement with your change.

How the project lead or change manager can avoid it:

• Prioritise early the creation of simple and transparent communication.

• Involve people at the earliest opportunity – creating honest and open communication channels that tackle the rumour mill.

• Provide support to managers so they can confidently assess the impact of the proposal and review any risks ahead of any formal announcements.

• Train managers on how to effectively lead their team through change and overcome resistance.

Not Taking Enough Time to Plan Implementation

A restructure is often complex which impacts people, process and systems. Without a strong plan that considers all these aspects and the various stakeholders, it’s highly unlikely you will successfully deliver the change.

SME’s often underestimate how much planning is required, it’s 50% of the delivery time. So, if it’s going to take 3 months to deliver your project you should spend 1.5 months planning.

In our experience the project manager is called in and given the brief to deliver the project (complete with all the planning) within the next 3 – 6 months depending on the size of the project.

The delivery of the project only can easily take that timeline, so you end up planning whilst attempting to implement at the same time, which is hugely stressful, particularly if you are managing or leading the project on top of your day job.

How effective project management prevents this:

By getting your project lead involved early they can start to put in place the structure and plans needed to successfully deliver the project.

• By creating a clear plan, milestones and responsibilities the project leads will be clear on what they need to deliver and by when. They can flag any resourcing issues early and plans can be put in place.

• Good project structure and governance helps cross functional collaboration and ensures everyone is moving in the right direction.

• It helps monitor progress and measure outcomes, which will highlight if your project is heading off track early so you can do something about it.

• It means you can celebrate wins and progress maintaining your project teams engagement during a challenging time.

In Conclusion

Restructuring doesn’t have to be disruptive and chaotic, with strong project leadership and effective change management, SMEs can turn uncertainty into opportunity, building organisations that are agile, aligned and ready for growth.

We help organisations create calm from the chaos of change, and our services include:

• Project management

• Restructuring Project Toolkits

• Project Kick Off Meeting Design & Delivery

• Change management

• Training design and delivery

Giving you a one-stop shop to help you design, plan, deliver and embed your organisation restructure, check out our case studies to find out more.

(c) Snow Limits Consulting Limited

The information contained above is provided for information purposes only. The contents of this blog are not intended to amount to advice, and you should not rely on any of the contents of this blog. Professional advice should be obtained before taking or refraining from taking any action as a result of the contents of this blog. Snow Limits Consulting Limited disclaims all liability and responsibility arising from any reliance placed on any of the contents of this blog.