Quick Steps to Restructure a Business

A company that is consistently under-performing and losing its market position needs to restructure its business. Contrary to popular opinion, it is not all about cutting costs and downsizing. This is because doing so may jeopardise the ability of the business to compete well going forward. And there is a minimum resource level required to make the restructuring process a success. In fact, you may need to increase the staff strength to enable the business tap opportunities and turn the corner. The following steps are important for a successful restructuring:

1. Obtaining Background Information

Before you can successfully diagnose the business and proffer solutions, you have to understand the nature of its  business. It is essential in order to identify the company's  strengths and weaknesses. In addition, you much juxtapose the company's strategies  with competitors' strategies to determine how industry participants position themselves in the marketplace. Understanding the industry will uncover industry key success factors such as product performance, product quality, distribution network, cost structure, service delivery and so on. 

2. Examining the Company's State of Affairs.

A company embarks on restructuring because things have gone awry and the company needs to be resuscitated. You must investigate deeply the causes of dismal performance. It would help determine which part of the business can be retained or which one should be discarded. Also, you would know whether the business is overstaffed or understaffed. 

3. Devise a Blueprint

The commitment of the staff of the company is required for the plan to be carried out successfully. Therefore, they must be involved in crafting strategies to revamp the company. In addition, external stakeholders such as banks and creditors have to be involved. For instance, the restructuring process may need loan from the company's bankers. 

4. Execution and Review

Strategies outline the courses of actions to achieve stated objectives. There won't be results if strategies are not followed through. Furthermore, there must be a review to ascertain whether things are working according to plans. This will reveal what works and what doesn't work. This is how the company can stumble on a great strategy because what works on paper may not work in reality.