Business Restructuring- simple (Lean) ways

We keep hearing the words Company Restructure, structural reforms etc. What exactly does this mean? and how can this be beneficial to the company or individual?

As per the business dictionary -- Restructuring is defined as bringing about a drastic or fundamental internal change that alters the relationships between different components or elements of an organization or system.

In simple words, Restructure means to organise differently. Companies typically reorganise and streamline their management, operations and debt. Restructuring usually involves new management, new funding, and rethinking the business organization and plan.

Why restructuring ?

A restructured company if the restructuring is effectively done -- is more focused, efficient and profitable.

When to restructure ?

Here are a three sure fire signs that necessitate restructuring:

a) When your Profit growth is not happening quarter over quarter
b) When your Customers /employees are leaving your organisation - A clear indication that something is wrong
c) When your Old processes/systems no longer work leading to inefficiency

How to restructure?

At a broad level the company would need to restructure existing systems, processes and teams. The best way to start is very simple , start by talking and listening to the various groups within your organization and the client. You have to have a good understanding of your "As is" structure before you can determine how it needs to change ("To Be")

Below are few simple (Lean) ways by which restructuring can be done:

a) Define Value --Keep only those resources and products/services that add value to your client and to the organisation. Remove the dead wood.

b) Identify the "To Be" state -- Encourage everyone in the organisation to develop a "To Be" state of their work. Let them imagine and consider ways to make their work more effective, enjoyable, and interesting.

c) Put the right people at the right place -- It is common sense that a Round peg does not fit in a square hole.

d) Process improvement – increasing efficiency and reducing non-value creating activities. Lean methodology fits in very well here.

e) Redesigning financial structures - This is whole topic in itself.