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The Right Way To Restructure

by fatweb

By Bridget Gourlay

redundantChange is a part of life, and for a business’ life it’s no different. As the economy shrinks, markets open or practice differs, companies sometimes have to restructure to remain viable and prosperous.

But with restructuring comes a raft of problems, especially for the staff. As soon as they’re told there will be a restructure, the first thought is ‘Will I keep my job?’ followed by ‘If I do, will I lose the manager I like, my friendly colleagues, my most enjoyable tasks?’

Competition sets in as people vie for their jobs, or stop trying because they think they’ll be fired soon anyway.

Bronwyn Anderson, registered psychologist and managing director of Change Dynamics, which specialises in proving support for businesses going through a change process, has seen the good, the bad and the ugly of re-structures. She shared some words of wisdom with us.

Do your research

It sounds obvious, but restructures cannot be done on a whim. Since it can be a difficult process, make sure it’s worth it and is going to work. Anderson recommends finding examples to study. She also says that once a re-structure has been drafted, to take it to the staff.

At a recent DHB restructure she was involved in, management consulted employees beforehand and modified the restructure slightly before implementing it because of the extra information and feedback they received.

Sell the change

It is absolutely crucial that everyone understands why the business is restructuring and is on-board with the changes. “If people aren’t involved, or don’t feel heard, they don’t accept the outcome and can create continual resistance. Even when it’s all over, if people afterwards are not understanding why it happened, they don’t engage with the new direction,” Anderson says.

She stresses that middle management must be sold on the change as much as other staff are. After all, if they don’t lead it enthusiastically, then they won’t win over their teams.

Be honest

Rumour mills will abound when a re-structure is announced and the best thing for the leadership to do is be honest about what will be involved — even if it’s painful, like the possibility of redundancies. Anderson advises using the three Cs — consistent messages, clarity and communication.

Anderson was working with a bank restructuring a long time ago, who told its employees there would be an application process, based entirely on merit, that everyone would have to go through. After a day of running a workshop with the staff, two people told Anderson they had been assured their jobs were safe. “That created a culture of distrust.”

She says managers must get a reputation for honesty, to stop rumours from circulating. “If I know if I ask my manager they will tell me the facts, the likelihood of listening to these rumours decreases.”

Change for a reason

Anderson says all restructures should change in line with company values and in line with the company direction.

If a restructure happens because of problematic individuals, or because of poor performance, it will create the impression that an upheaval is happening because management can’t cope with those issues and are using a restructure as a smokescreen to get rid of employees they don’t want.

Anderson says one government agency that recently restructured worked collaboratively with its staff the whole way through. The CEO got the company together and they developed values for everything, including the restructure, to be based on. The CEO was available to listen to anybody who wanted to talk and was honest about the whole process.

One restructure should be sufficient for long-term aims. However, Anderson knows of a company that restructured three times in four months, with another one coming.

“People get change-weary, give up, disengage and want to leave. They may not resign, but they leave in their head. Don’t put people through unnecessary pain. Confusion doesn’t get good outcomes.”

Make it snappy

Anderson says one large government organisation told its staff half would lose their jobs after a restructure, which took over a year to implement.

“This meant that for over a year staff didn’t know who was staying and who was going.

“Productivity goes down, people can’t perform well under the stress and teamwork breaks down. People start looking after themselves and won’t help colleagues. Sad things happen, when people compete against friends and colleagues. People need a lot of support.”

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 What not to do…

The Auckland Museum restructured in 2008. It was recently reported 100 staff out of a roll of around 150 either resigned or were made redundant in the process. The union complained bitterly that employees were never clearly told why a restructure was necessary and leaks to the local newspaper were more like floods. The paper reported stories of staff in tears.

The director left in April this year, after a number of controversies, including a dispute with the Hillary family over the papers Sir Ed left the museum.


  • Be honest
  • Be 100 percent sure the restructure is what you need
  • Seek feedback from the whole company
  • Get everyone on board
  • Ensure managers are reliable sources to shut down rumour mills
  • Keep social activities like Friday drinks going.


  • Lie (especially over redundancies)
  • Drag out the process
  • Restructure again soon afterwards
  • Ignore the staff
  • Remain tight-lipped so gossip spreads
  • Restructure just to get rid of problem staff.

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