}); Corporate Restructuring Survival Guide | Corporate Wise Man

Corporate Restructuring Survival Guide

On Monday, my world turned upside down. The Senior Vice President who hired me into the company (lets call him Mr M), who was openly rumored to be the next CEO, was abruptly (and rather unceremoniously) fired. This was difficult to believe as I spent all day Thursday and Friday with Mr M working on refining our corporate strategy, so it was clear he did not see this restructuring coming. I didn’t either. During any big change, after the initial shock wears off, the next question is “what does this mean for me?”

As you can imagine, I spent a lot of time asking myself this very question. Fortunately, I had been in similar situations many times before ranging from abrupt firings, planed layoffs (euphemistically referred to as “reductions in force” or RIFs) and everything in between. Below is a list of advice that has helped me survive (and even thrive) during times of rapid, unexpected change.

  1. Don’t panic! Any big change is accompanied by emotions, so fight the urge to get on the emotional roller coaster. Uncontrolled emotions can lead to bad behaviors including gossip, negativity, and distraction from focusing on your job.
  2. Don’t assume the worst. Its easy when you manager leaves or there is a restructuring to assume that you will be impacted negatively. Although this certainly can be true, in my experience change is necessary for growth so restructuring will happen whether you like it or not, and most times the change is necessary to accomplish the company’s goals.
  3. Try to understand the context. Rather than buying into the gossip from employees (who are likely just guessing about what is happening and why) pay attention to the official corporate announcements. Yes, the corporate announcements will include “spin” but executives tend to be smart people who try to avoid making bad decisions. As such, try to understand why the change is happening for insights into what problem the restructuring is attempting to address.
  4. Avoid joining “factions.” During times of change, nobody wants to be alone so they naturally try to align themselves to leaders or groups of employees. I suggest you resist this urge and attempt to remain neutral. Restructurings are time when alliances are challenged and leaders may try to angle for open positions. Unfortunately, many of the people who try to play they political game get burned or realize they were never in the running for openings to begin with and the last thing you want is to be aligned with the wrong person. As I have said before, it is always best to be non-political and not too closely aligned to any one leader to avoid going down with the ship.
  5. Understand there will be fallout… and it will take a while to play out. On Monday of this week, Mr M was let go. Today (Wednesday) an official announcement went out to all employees with an overview of the restructuring (from 4 divisions down to 2) and introducing the leadership teams of the two divisions. However, this is just the tip of the iceberg as now the real work begins: migrating the existing organization and aligning it to the new structure. This will take months as key roles will be opened and filled, reporting structures will change, and the impact will cascade throughout the organization.
  6. Be a leader for your team. With any change comes fear and when people are fearful true leaders stand up and lead. Share what information you can and actively try to dispel rumors you know to be false. Be open and honest with what you know and don’t know. However, there must be a high level of confidentiality regarding most restructurings (especially with material information) so do not betray the company’s trust. Remember: if your team sees you panic, they will panic. If you are calm, collected and optimistic, it will send a stronger message than any presentation you can pull together.

So, back to my week. On Monday I learned that Mr M was out, and that was all I knew. Within 15 minutes of the news getting out, I probably received 10 phone calls from colleagues trying to figure out what was happening. The rumor mill was on overdrive. I listened politely to my colleagues and encouraged them not to assume the worst when they were being overly negative, but I did not add to the speculation. I also personally reached out to my team members and shared the information I knew to be true in order to calm them down and stop the spread of rumors.

Tuesday morning, one of the senior leaders in the company reached out to me directly and shared with me the new high-level organizational structure. The focus of the restructuring was to separate our core business (stable, steady growth) from the new technologies business (high risk, high reward) to make it easier to explain our performance to investors. This leader stated my business would be in the new technology business and shared that the new leader would be the current President of the business in which I worked. In fact, much of the new leadership team for the technology business was coming from the recent acquisition in which I work.

In short, what on Monday looked like a potential disaster ended up being a net positive for the company, my business, and myself personally. Personnel reductions will be minimal (if they happen at all) and in may ways we are restructuring for speed, growth and investment. By following the advice outlined above, I avoided unnecessary stress (for myself and others), distraction which would negatively impact my team and customers, and potential career suicide by panicking or fighting the change.

It is likely that you will face a similar situation at some point in your career (if you haven’t already). If you are faced with a corporate restructuring, don’t panic, don’t assume the worst, seek context, avoid politics, be patient, and step up and be a strong leader during this time of uncertainty.  Following this advice will not only minimize the stress you and your teams will feel, but will optimize your chances to transform potential tragedy into victory.

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