With some serious signs of recovery of economy visible already a lot of companies are planning for scaling up productions/activities. A lot of line and staff managers are happy that there is not much follow up on the long term viability and restructuring questions. The situation is one of cautious optimism so the relief symptoms are natural. But underlying fact remains that the World will not be the same the next few years as the changes are permanent. Economic balance is tilting in favor of new economies much faster than earlier years (as the recession did not hit them-India, China, Brazil continued to grow while Europe and US shrank). The overcapacities in Developed economies will surely hit their long term survival though most companies think the pressures will be lesser. The pains of restructuring need not be elaborated as indeed to remove people from employment and moving to a new location is never easy. Knowledge and loyalty is lost, so is the public image. But the fact remains that without economic justification it is not possible to sustain a business. This means that while timing a restructuring is important, so is the willingness of management to take the acid test proactively rather than waiting for acid to come to nose levels.
Every restructuring has unique aspects. I don't believe that there are a few blessed people who can foresee all issues and claim to be called as Restructuring experts. The sensitivities of communication (the extent/content/timing) and ability to get stakeholder confidence is different in different countries. In US it is quite normal to be out of job in short notice but in certain other countries it takes months to move one small step. Most important aspect for success is having the person on ground with most credibility-who does the right things and won't project himself as know it all person-balances emotional and rational decisions.
Gains of restructuring is for the organization but does not start the next month of completion. Usually there are pangs for atleast one to two years especially if it involves moving manufacturing capacity to a new economy. Quality, productivity, consistency, learning curve-all of it takes time as knowledge is still not a commodity that can be transferred as easily as manufacturing capacity. The earlier one harmonizes the capacities to align to demands of market the more quick they are to become leaders. If we delay restructuring and thereby also delay new capacities in right markets we loose at both ends. Sure, companies are learning that and so are shareholders!!
- ▼ December (3)