Putting Off a Reorganisation? This Could be Rather Costly

Posted by Simon Rose on Sep 3, 2019 4:00:00 AM


Since the economic hardships of the 2008 financial crash, it’s fair to say the United Kingdom’s businesses and economy have rebounded well. Yet, both old and new obstacles to a healthy P&L persist, while businesses seek to thrive in competitive markets and preserve a healthy work culture for employees. 

Meanwhile, across all industries, the pace of technological innovations – from robotic process automation (RPA) to artificial intelligence – is just beginning to disrupt the status quo. The fear of such disruption can be seen in contemporary, emotive headlines such as “robots will take our jobs”.  But what does this new application of technology truly mean for businesses?

We at SRM Europe would argue that businesses must leverage these new technologies to adapt to their environments, or else be left behind.

Hierarchy Model

Many businesses operate on a hierarchy basis. This type of model has been around for eons and continued today based on the rationale that, for a business to function, there must be individuals empowered to make decisions and set direction. As a business expands and grows, these hierarchical models can become complex, growing in different directions with every promotion or new division – without perspective on the resulting impacts to the business as a whole.

This type of growth has many advantages. The fact that an organisation is growing, colleagues are being recognised, and investments are being made – the appearance of upward success is motivating. Nonetheless, there are problems likely to arise as part of this growth and take determination, time, effort, and investment to counter. 

One of the ways to address some of these problems is to find ways to adopt one or more types of new technology, with the hope of using them to shrink the size of workforce needed to run a company. Indeed, the appeal of shiny new technologies is hard to resist, but succumbing to their lure can drive the wrong behaviours. The attraction is understandable, yet there are risks to uninformed decision-making – such as the impact on work culture to name one.

For example, although RPA technologies are often applied to address high-volume, low-value transactions, using this tech to wipe out large swathes of operational roles is not exactly a rallying cry in the workplace. Yet, this scenario should not be used as a reason for neglecting to review the form of their organisation at all - that is also a fatal misstep.

Plan for the Future

An Organisation Design Review (ODR) is not for the faint-hearted. It must be planned with a clear vision, articulated strategy, and defined principles essential to a direction of travel. It also calls for effective, swift decision-making.

The goal of ODR is to align the structure of an organisation with a clear set of objectives, improve efficiency, and increase effectiveness. The result may often be a ‘flattening’ of the hierarchy – i.e., removal of management layers. Allied to this, the organisation may seek to improve service delivery or specific business processes to reduce (or contain) costs.

Throughout the process, involved parties must understand drivers for change, identify redundancies, operational targets, existing processes, and how to transition to a new work method. While cutting cost is not the only goal being pursued, it is usually the top priority. Your business must be prepared for the impact this priority will have – before the impact occurs – as roles will change and new ones will be created. Ensuring effective communication with staff will help achieve goals, as they are oft among the first to see emerging problems and are able to suggest solutions.

Achieving Value

At SRM, our approach is to partner with clients to achieve fruitful results. The method is systematic, employing a top-down, bottom-up and horizontal view, ensuring teams and leaders are engaged to configure and align structures, culture, leadership, and metrics – taking the whole organisation on the journey. We identify technologies, applications, and build a roadmap for change.

With our company’s support, clients often achieve efficiency savings in the region of 10-25%, as well as gain the satisfaction knowing their business has been configured for future sustainability.  Unique to our industry, SRM Europe also offers a risk-reward fee structure, with fees based on a percentage of savings realised.

Why not drop us a line at contactus@srmeurope.com to learn more about how we can help your business?


Topics: Cost Reduction, Organisation Structures, Function Design, cost containment