Most of us have come to equate the term “restructuring” with layoffs. The reason is simple: during restructurings, management’s focus is typically on developing severance and incentive packages to reduce employee head count. By focusing primarily on how people leave the restructured organization, however, companies too often neglect the matter of who leaves. Senior managers focus so heavily on cutting costs that they don’t give sufficient attention to the company’s future strategy — and who will implement that strategy.
Yet a key strategic issue for any company that is restructuring is the quality of employees who remain. Companies often lose their best people, who quickly find other opportunities rather than wait for the haphazard results of a typical reorganization. Unfortunately, a company can be crippled following a downsizing if the wrong mix of employees remain. Indeed, scores of beleaguered companies seeking to reshape themselves have been damaged for years by focusing on reducing head count rather than on ensuring that the best qualified people staff the new organization.
We cannot overemphasize that workforce reductions, to the extent they are required, should be the outcome, not the objective. The restructuring process must be directed toward positioning the organization for the future, not implementing a downsizing. In planning any restructuring, managers need a link between the reorganization and the company’s ongoing revitalization — a link that traditional methods of downsizing fail to provide. That link requires a strategic approach that enables executives to focus on making sure the organization has the right people in place after the reorganization is completed — a people-based approach we refer to as redeployment or zero-based staffing.
Specifically, redeployment permits managers to select the people best qualified to staff the new organization. Developing the criteria for ensuring that employees with valuable competencies are retained demands that executives concentrate first on the positions they consider essential to the reorganized company and then on staffing.
Reorganization and Redeployment
Because restructuring companies usually focus first and foremost on overhead cost reduction by trimming head count or making staff selections in a seemingly mysterious way, employees see the process as unfair, which diverts their attention from strategic goals. In this article, we provide an alternative process for realigning an organization’s human resources.