Organizational redesigning to cope with Companies' Competitive Realities

Many companies are reorganizing to cope with new competitive realities, but few CEOs have approached the process of organizational redesign systematically and methodically. Fred Wu of GE Consult shares his thoughts.

Q1. Companies across the economy have been decentralizing, downsizing, and flattening. What makes a successful company's reorganization different from what other companies are doing?

A company’s reorganization often might turn out a tricky undertaking with pitfalls on the way. Whether one is able to navigate its enterprise’s reorganizational process successfully depends on a number of factors. 

What some managers, in my opinion, overlook while embarking on it is that they perceive reorganization as a simple structural reshuffle on an organization chart. But that is a superficial understanding of its main objectives which is not merely improvement of financial metrics and outcomes but a holistic process of enhancing decision making system on all levels, employees’ performance and collaboration between departments and divisions. 

For instance, a flat organization structure may not have effective decision making process if authority is too MD-centred. Whether you like it or not, it’s a complex process which involves all stakeholders and requires continuous monitoring and adjustments along with effective resource utilization. 

In summary, a successful company is the one that has proper reorganization structure based on internal and external assessment made through in-depth consideration of scare resource: employee, cash, products, making the company energy-efficient.

Q2: What can happen in a business that makes fundamental changes so necessary?

Such changes are crucial for any company that aims to unlock better performance by shaking up the entire system. Bringing fundamental structural changes can help you speed up product development and decrease costs as it smoothens the decision making process and enhance tasks execution. 

And this is what GE CONSULT does by dragging companies out of a pit of bankruptcy by accelerating their turnover based on available resources and reorganized structure efficiently. But one must keep in mind that it can also destroy the company’s existing value whereof restoration would take a huge amount of time or even lead to another reorganization. So be smart.

Q3: How has technology helped in creating more effective business systems?

A well functioning information technology system opens up opportunities to handle and boost the company’s efficiency without which it would have vanished from the market. First of all, it facilitates the enterprise to enhance rapport with all stakeholders of the company including employees, investors, business partners etc. 

It is crucial in establishment of a great image of the company. Secondly, it facilitates monitoring of the overall workflow, smoothens the decision making process and keeps an effective and collaborative interaction between employees, suppliers and partners – a self-sustained eco-system – which certainly contributes in fostering your business. 

It can also increase customers’ satisfaction providing adequate information of a product line and maintaining a continuous interactive link between customers and customer relation management. Not to mention, it can significantly reduce the operational cost of the company as the tasks execution and monitoring becomes much convenient. This is just a quick glance at the IT potentials in boosting the company’s effectiveness.

Q4: What is your advice for startup entrepreneurs?

Developing a comprehensive concept with a clear vision of what they are going to do is of primary importance before they embark on their future enterprises. Therefore, it is a main point of their program to design a product and service range based on that concept. 

How can it be achieved? Of course, through a well written business plan which would eventually shape their entrepreneurial activities and show them a right direction at a right resource allocation. 

What’s more, developing a comprehensive and cohesive concept of your business will also help to find the right investors as conveying your ideas and passion will be much easier.

Q5: When opening a business, what's the first thing the owner should do, in terms of business structure and organization?

It is crucial for every startup entrepreneur to provide a clear vision on how decision making process and role authorities must work within their enterprises. Therefore, what they actually need to do is to clearly define responsibilities of each position in the company, establish a transparent workflow and a suitable structure which would be based on the available resources of people, products and budget (cash).

An effective handling of those internal and external resources will bring the sufficient energy for the startup by which the company will be able to save up a tremendous amount of money. Therefore, keeping the architecture lightweight with roles and responsibilities being clarified and resources effectively employed is what must be achieved from the very start. Otherwise, the overall process might slow down to the level which would adversely affect not only the company’s competitive edge but the business momentum which is of the primary importance.

Join Fred Wu at the Nurture Growth Conference on November 19th in Petaling Jaya, Malaysia as he shares how important it is to build systems and structure in a business.

 Make sure you get your tickets HERE.