Over the years I have been involved in a number of corporate restructurings and I know how difficult and challenging a process it is. Emotions run high and the HR team comes under pressure from all sides. So it’s no wonder that most HR professionals would be happy if they never had to navigate their way through a major restructuring or why organisations bring in people like myself – experienced interim practitioners – to help them handle these situations.
As interims, we can be more objective and look at the business rationale in a more detached way than an insider. Having an external perspective and specialist expertise can be a huge advantage when planning the mechanics of a restructuring, particularly since most in-house HR teams will have little experience of such situations.
Here are some of the things that most commonly go wrong when it comes to the people side of a restructuring and how to avoid them.
Don’t drag it out
Some companies endure multiple restructuring processes because they have avoided taking tough decisions up front. But it’s far better to cut deep and cut fast rather than spin it out. A business needs to get back on its feet after restructuring, not labour in an atmosphere of ‘death by a thousand cuts’. This is especially important when it comes to retaining the people you are not planning to let go and fostering a positive culture which is about moving forward and building for a sustainable future.
Balance compassion with fact
There is always uncertainty, nervousness and emotion when an organisation announces that they intend to restructure and HR professionals are in the firing line. It’s impossible to be dispassionate because you might be laying off colleagues, friends or even your own team. That can be incredibly difficult to do – so much so that it’s not unknown for an HR person to quit before the restructuring process begins. So there is a huge emotional component involved. People can panic, become defensive, confused and look for flaws in the process. It’s important to balance compassion with the facts as you explain the process.
It is vital that a restructuring is not seen purely as ‘an HR thing’. It is a management decision and management must communicate their rationale to the business. As HR professionals we are the subject experts leading the business through a process. A piece of advice for any HR professional who finds themselves in this situation is to remind yourself that it’s not you deciding to fire someone. You are a simply a representative of your employer and you’re undertaking a task on their behalf.
It’s important that you don’t let people trigger you into a charged state. To maintain credibility, don’t react negatively to people`s outbursts. HR need to be present in the moment and approachable. You will face a number of people who will be react differently – some angry, some relieved. Regardless of how the people you are dealing with react to change, it is important to stay neutral if you are to deal effectively with emotional responses.
Communicate, communicate, communicate
You can never have too much communication in these types of situations. Communication is absolutely critical throughout the process and that has to start with senior management who need to sit down with line managers to explain the reasons and strategic rationale behind the decision. They also need to outline the tactical plan – how we are going to do it – and spell out what the future holds. It’s HR’s job to highlight the importance of this communication to all key stakeholders.
The importance of the story
It is critical that management conveys the story effectively. Is there a future for the business or has it just carved a whole load of cost out? The key to motivating people is for them to understand the vision – they need a reason to stay. That’s where line managers come in to the picture. For those who are not being let go, it is absolutely vital to communicate effectively to these people what the future holds otherwise you will be left with a disgruntled workforce. This communication is clearly the responsibility of management, and it is something that HR should encourage them to do at every opportunity.
Abdication of responsibility – the role of management
Where it can all go wrong is if senior management bucks its responsibilities and leaves everything to HR. Likewise, line managers have to step up to the plate – they must not be allowed to abdicate their responsibilities. We are all in this together. We (HR) are leading them through a process. There is no substitute for this because it is the line managers who need to impart to their teams why the restructuring is taking place.
This is even more important if the layoffs have followed an acquisition. If the acquiring management are not seen to be engaging with the process, they are unlikely to be welcomed with open arms once the process is done. This can quickly create a retention nightmare and a downwards spiral and climate of disaffection which in turn impacts performance.