Corporate Reorganization often causes fear and uncertainty Here are some ways to communicate and handle all the challenges of the reorganization.

Corporate Reorganization – The Essentials

Corporate Reorganization is a process designed primarily to stimulate a financially troubled company. Corporate Reorganization is an attempt to extend the life of a business facing bankruptcy and other problems through means of special arrangements, in order to minimize the possibility of past damages from reoccurring. There are many causes of fear and uncertainty that can accompany any major reorganization initiative. However, there are also many ways to effectively handle and communicate any challenges facing reorganization.

Corporate Reorganization

A corporate reorganization doesn’t have to create distraction and chaos. However, many do when there’s a lack of a clear plan for communication with employees and other stakeholders early in the process, often, and over an extended period of time. It’s important to know that employees require the most attention. Thorough communication that is clear, engaging, and frequent will help assuage any fears or rumors that may have been diluted in the echo chamber. The challenges surrounding reorganization can be minimized by focusing on 4 specific areas of communication:

Corporate Reorganization: Communication: Ensure it is all signal and no noise.

Corporate Reorganization: Communication, ensure it is all signal and no noise.

  1. Frequency. Communicate early and communicate often.

    Organizations need to treat their employees with respect dignity. The easiest mistake for companies to make is to communicate once, and to think that’s all there is to it. Consistently communicate, even if it’s to people who have heard already, so they’ll know you mean it. It’s important to communicate to both the employees whose job is at risk of termination and the majority of employees who will stay with the organization and drive success as a result of the corporate reorganization.

    Corporate Reorganization: Clarity - Articulate the big picture of the reorganization

    Corporate Reorganization: Clarity – Articulate the big picture of the reorganization

  2. Clarity. Be clear on what employees want to know.

    Why is this change happening? What will happen afterwards? What does this change specifically mean for me, my job, and my work environment? What does the company expect me to do differently? Communication through digital channels and in-person town-hall meetings are important tools. It can be an opportunity to articulate the big picture of the corporate reorganization, and the few biggest organizational changes needed to make the corporate reorganization.

    Corporate Reorganization: Employees should be engaged to shape the reorganization

    Corporate Reorganization: Employees should be engaged to shape the reorganization

  3. Engagement and Design. Ensure employees participate in the shaping of the new organization

    Anyone who has inquiries about the corporate reorganization—at any stage—should be clear on who to contact on the reorg team. Additionally, it’s helpful to capture and account for feedback or concerns that employees do not want to raise aloud (e.g. anonymous suggestion box, confidential emails). Relying on a small group of smart members to design the details of the reorganization is hazardous. Ensure to get input on the design from various facets of the company. Once the new organization launches, it will be the majority of the employees who determine whether the new design of the company will deliver value by following new ways and with possibly a new boss.

Who are the other stakeholders in a Corporate Reorganization?

While employees demand the most attention in a reorg, depending on scope and business context, as many as 4 other groups will likely need attention:

  1. Board of Directors.

    If the reorganization is company-wide or projected to have a large impact on overall company performance, it will be on the board’s radar. The board should always be aware of what is happening and why, and be aware of the proposed time frame, benefits, as well as risks pertaining to the reorg.

  2. Customers and suppliers.

    When organizations think about how the business will work in the future, consider how it will affect suppliers and customers. Adding additional step or expecting them to navigate through the new organization by having to speak with people will add tangled complexity.

  3. Government regulators.

    The concerns of regulators will typically revolve round health, safety, and quality, although potential job risks and their impacts on the local economy will also weigh with politicians and other civil servants. They will want reassurance from a senior level about what to expect and prepare for.

  4. Workforce unions.

    In general, workforce unions often have clear views of what needs to change and can be tough on schedule and the middle layers. In some cases, union representatives can become formal members of the reorganization team.

Generally, under most circumstances, reorganizations require a great deal of time and energy. When proper communication strategies are in place, however, leaders can reduce unnecessary anxiety and fears. Communication planning should start early, long before employees get word of any proposed changes.

How can WGA help?

WGA is passionate and dedicated to helping clients make and execute the big decisions on: strategy, operations, transformation, technology, organization and compliance. WGA’s guiding belief is that as trusted advisors, we must measure our results from the enduring financial success of our clients. This belief and passion can be seen in our growth, our people, our services, and our relationships.

Our experience across various industries allows WGA to offer singular and unique objective recommendations and execution services that will give our clients the ability to adapt, renew, and prepare themselves to succeed in a turbulent environment. We provide Corporate Reorganization Strategy Consulting that can help with corporate reorganization strategic, scenario, and contingency planning with change-focused goals, and Business Transformation services that can facilitate any organizational changes. From strategy to operations, we are committed to helping our clients with their corporate reorganization efforts and sustain performance. We recognize that only through our clients’ success can we achieve ours.

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