Words like downsizing and restructuring are enough to turn the conversation into a serious topic and fill the room with silence. These processes are difficult and taxing both mentally and psychologically for those involved and while undertaking them you should really keeping mind all of the moving pieces and realize that tact and precision are your allies. Companies look to restructure when they find themselves in a situation of insolvency, which means that the revenues are not enough to cover the costs of operations and debt begins to accumulate. Restructuring processes are all about saving the company and ensure it has a future. Here in Suzzanne Uhland’s blog, we have talked about some of the tips you should follow to ensure you are successful when you have to go through a restructuring process and also how these processes are supposed to run and why the behave in such ways. Today we want to talk about some of the most common mistakes leaders and organizations make when going through a restructure and how they can be avoided.

Restructures are already difficult and sensitive subjects as it is, so why not learning to identify these common blunders and ensure that in the event you have to go through the process, you can do it as flawlessly as possible and avoid these usual pitfalls.

Errors in communication

Mistakes in communication happen when the information is given out with too much time in advance or when it is done in the last minute. If people know something ahead of time and leadership is unable to answer their questions, you are going to have a lot of trouble until you are finally able to talk about the specifics of the process. If you wait too long, then people will feel blindsided and the process will not be smooth at all. The best thing to do is to only release the information when you are able to talk about the details and to do so with enough time for people to make decisions and to adopt a backup plan. Premature communication leaks must also be avoided at all costs.

Unnecessary sectioning of the process

When restructuring happens in waves you will have a ripple effect that will give birth to rumors and unnecessary stress among the teams of other departments as they wait for their turn to restructure operations. You may think that prolonging the process will be more cost effective, but the consequences are not worth it.

Weak leadership

Those in charge must make sure that the process is as smooth as possible and that means being able to give direction, answer questions and support the organization in whatever it needs in order to accomplish their goal as easily as possible. You can have the best plan for your restructure, but if you don’t have the right people on the floor helping you execute, then your efforts are being wasted.

Forgetting about the details

The organization looks at the big picture when it comes to restructuring and understand that sacrifices must be made, however that doesn’t mean that proper planning shouldn’t be executed and that individual details that affect the people who may have to leave the company. Taking care of those small details will make the difference between a smooth transition and a disastrous one.

Underestimating the impact

Just because this course of action is best for the company that does not mean that those being directly affected by it see it the same way. Do not pretend that what is happen is not a big deal, because for some key players, their livelihood in jeopardy, so they will not only disagree with your position but also will become hostile towards it.

Changes in strategy by not in structure

Sometimes you need to redirect your efforts to best employ the tools you have at your disposal. Sometimes the problem is not your strategy, but the structure of your business, so no matter what you do and how much you work on your strategy, if the structure of your company is the same and you are not correcting that detail, you will only welcome more heartache as it will never work out.

Thinking is only about the finances

The money is just a consequence, and while it may be the main one, it isn’t the only one. Remember that sometimes is not about the amount of revenue, but also the way it is acquired what must be readjusted.

Failure to negotiate effectively

Before the negotiation process begins, leadership must have a clear plan of what they want to accomplish and how much they are willing to compromise. Being unclear in these areas will make you an easy target and take away much-needed leverage from you.

Neglecting to build the team

The team must be built and strengthened in order to continue and move on. You will be surprised by how many people neglect this essential portion of the process by thinking it isn’t necessary.

* Featured Image courtesy of International Monetary Fund at Flickr.com