When Companies Reorganize, How Do You Know Your Role?Natalia Persin
Business restructuring or reorganization is inevitable in many businesses. When this happens, employees usually find themselves displaced from the team, departments, or usual roles as members of the organization.
Dealing with changes after a thorough reorganization is one of the toughest employees face. During this phase, it is common for employees to feel lost, confused, and unproductive.
Have you recently experienced a drastic role change due to restructuring? How do you know your role when a company reorganizes? Here is all you need to know about life after corporate restructuring.
What Is Company Reorganization?
Company reorganization or restructuring is when an organization or company changes its business model or internal structure. In a sense, it is an overhaul of an organization’s internal structure.
A fun way to think about company reorganization (or reorg as it is fondly called in the business world) is a business makeover. However, most times, reorganizations can be far from fun.
There are many reasons businesses undergo reorganization or restructuring. These reasons include the following:
- Cutting costs
- Reducing inefficiencies and increasing business efficiencies
- Increasing productivity
- High turnover
- Overworked or burnt-out employees
- Underutilized employees
- Aligning and optimizing employee skill sets to match their business
- Repositioning the business
- Generating cash flows to pay a debt
- Adopting corporate changes.
A company can choose several ways or methods to restructure its business. The intensity of the reorganization usually varies as the business will have to decide what to eliminate, what to add, or if they would like to start from scratch/perform a complete overhaul. Think of it as trying to redecorate your home.
The restructuring may involve changing departments, creating new units, laying off many employees, dissolving teams, creating teams, and assigning new roles to staff members.
These processes can be chaotic depending on how many organizational changes are made. At the end of the entire process, it is not strange to find employees feeling unsure of themselves and the roles they are supposed to play in the organization.
Reorganizations can be stressful and costly for employers. They may also result in a layoff of employees. However, it can be even more stressful for the affected employees who remain after layoffs. While it might be a cause for celebration for employees to have escaped corporate purging, it is worrisome when employees are asked to resume different roles, teams, departments, units, or even branches than they are used to.
Has your boss recently executed a business reorganization process? It is normal to feel lost and confused in what seems like an entirely new environment.
To quickly become acquainted with your new role, it is first important to understand why your business was restructured. While this might not exactly tell you what you should do, it is a great starting point for rediscovering yourself and starting your new staff duties.
Types of Reorganization
Businesses order reorganization for various reasons. Depending on this reason for the restructuring, businesses have various types of reorganization. These types include:
1. Merger And Consolidation
A merger and consolidation are exactly what it sounds like- the accumulation of a business entity by another entity. This acquisition might be of businesses within the same industry or different industries.
The goal of a merger reorganization is for two businesses to accumulate their resources. This might be for diversification or other benefits such as faster growth and economies of scale. Regardless of what it is, the relationship is contractual, and the two businesses are expected to pool their resources, shed some employees, make some changes, and introduce new policies.
After two businesses merge, they transact and operate as one entity. Although a merger and consolidation come with benefits, it also comes with events like laying employees off, reassigning roles, and creating new units.
Some of the biggest mergers in history include Pfizer and Warner-Lambert and Exxon and Mobil.
2. Acquisition – Target Corporation Subsidiary
A Target corporation subsidiary, also known as an acquisition, is a form of merger. However, this type of reorganization involves the acquisition of one corporation by another, where the latter (acquired company) becomes a subsidiary of the acquirer.
An acquisition is usually done when one corporation acquires another company’s voting stock. It is usually performed within a short period and as part of a larger plan, which may involve getting control over the company. Essentially, both companies do not match as there is one parent company and one subsidiary.
3. Target Corporation Liquidation
This reorganization is another type of acquisition. In this type, the target company is liquidated unless the IRS waives the usual requirements. Shareholders of the targeted company or the acquired company usually have a stake in the acquiring company.
4. Transfers, Spinoffs, & Split-offs
While the previous reorganizations involve merging companies, this type of reorganization means one business entity splits from one into two or more different businesses. In this type of reorganization, the targeted business’s shares may be sold to the parent company or the shareholders.
Transfers, spinoffs, and split-offs typically don’t involve a third party or an outside company. All transactions are carried out within a close-knit company. Individually, transfers, spinoffs, and split-offs mean different things.
Spinoffs mean the parent company distributes new shares in a subsidiary to its existing shareholders. By doing this, it creates a separate yet legal entity armed with its board of directors.
In split-offs, the distribution of shares is a little different. Shareholders in the parent company are offered shares in the subsidiary company. However, the shareholders must choose between the shares in the parent company or those in the subsidiary company.
Often regarded as recapitalization & reconfiguration, recapitalization is the exchange of stocks and securities between shareholders in a company. These exchanges usually result in an exchange of stock only, securities, or both between shareholders.
Recapitalization involves only one company. The aim of this type of reorganization is usually to reconfigure the company’s capital structure or organizational level. It is a great way for a company to gain financial stability and clear its debt.
6. Identity Changes
An Identity change type or reorganization refers to a company changing its identity, location, or form. This typically means a company changes its name, effects changes to its articles of incorporation, corporate charter, or the state it operates in. Examples of some companies that have changed their name Bausch Health (formerly known as Valeant) and Capri Holdings (formerly known as Michael Kors).
7. Transfer Of Assets
This type of reorganization usually involves a bankrupt business party. The company that claims bankruptcy will transfer its assets to another organization. By doing this, the acquiring company gets a reduced tax liability for the assets it gains from the bankrupt company.
How To Know Your Role After A Reorganization
Regardless of what type of reorganization or restructuring a company undergoes, the process can be extremely scary and confusing for employees. Not only are several changes being made all at once, but in several cases, employees are also being laid off, and roles are being changed.
While still being a part of the organization after the restructuring is a celebration, settling down to newer and more different roles than you are used to can be confusing.
So how exactly do you know your role?
When restructuring, companies usually give their employees a heads-up about their plans. They communicate the details beforehand to keep every employee on the same page. This ensures employees are ready for the outcomes of the restructuring and a new chapter in the company’s story.
Of course, many employees may not be wanted until they are on the brink of the change brought on by the reorganization process. Employees may be laid off without warning, while their former colleagues may only be given a vague description of what is happening. In many cases, the employees left within the organization may only be told of their new roles after completing the restructuring process.
In such cases, managers and other executives may call a meeting or personally communicate with you. This meeting may be physical or virtual (check out these rules for effective video conferencing) using platforms like Zoom or Skype. There may or may not be a briefing via e-mail before the physical or virtual meeting is set up.
In the meeting(s), the manager and other executives will brief you and other employees about your new roles. Consequent meetings may also reassign employees to new teams. Regardless, the best thing to do in this case is to listen.
In these meetings, you will get a chance to ask questions. The best thing to do in this case is to gather as much information as you can. Don’t rely on hearsay; instead, get all the information you need from your meetings.
2. Talk To A Manager
Even after attending meetings and receiving emails, you can still be confused about your role in the organization.
Confusion is a natural response after the business restructuring process. Things are moving too quickly. Employees are being laid off. New employees are being introduced. There will possibly be redundancy in work roles. Most importantly, you have been told you will no longer resume your normal role or workstation. This creates a lot of information that may be difficult to understand at once.
So, what’s the best step to take? The best thing to do will be to speak to a manager.
Managers are better informed about the steps taken during the restructuring process. They understand the changes better and are better positioned to explain your new role to you and dispel any confusion centering around your new role.
One-on-one meetings with a manager will give you enough time to ask all the necessary questions. Like team meetings, one-on-one meetings with managers may be physical or virtual.
3. Speak To Your New Team Leader
After a company restructuring process, you will be assigned to a new team. This might seem strange, especially if you’ve gotten used to working with your now-dissolved former team. In your former team, you had your toles and duties spelled out for you. How do you handle the change and know your roles in this new team?
The best way to know your role in your new team is to speak to the team leader. This will not only give you a chance to know your role but also to get yourself on the new team leader’s radar and show them that you have potential.
Introduce yourself to the new team leader and discuss your concerns with them. Communicate your confusion and ask them for your roles in the team. Jn the process, it will also be best to get to know your leader and the new teammates.
Talking to your team leader is a great way to collaborate with a new ally. It is also the easiest way to make the transition into a new team seamless and hitch-free.
4. Reapply For A Role
In some cases, employees laid off due to a restructuring process in an organization are told they can apply for a new role. However, in other cases, employees may lose their organizational role and not their job. When this happens, it is best to reapply for a role.
You may reapply for the same role you have always filled in the company. However, it may be time to recognize this restructuring as an opportunity to teach for new heights by paying for new roles.
Don’t assume you will get the role you want to apply for and perform a half-hearted application. Instead, regardless of how well you performed your former role or what position you played in the organization, focus on outing your best foot forward.
Construct your resume and emphasize the value you have added to the company through various accomplishments. Don’t be afraid to use your resume and cover letter as a canvas to paint how valuable you are. When possible, quantify your accomplishments and highlight the skills, knowledge, and personal qualities you possess which enabled you to generate those successes.
Point out your core assets and how your values align with the company in your cover letter. Express your enthusiasm about continuing with the reconfigured organization.
If you are applying for a new role, highlight how the role comes with added responsibilities and why you are the best fit for it using your track record as proof. When you are approved to start work, remember to negotiate the job offer to make the most out of the restructuring process.
How To Survive Company Reorganization
Reorganizations are challenging processes for employees. However, instead of wallowing in the problems you will undoubtedly face during the process, it is important to take advantage of the upheaval to prove to the company that you are an indispensable asset. Some ways you can survive a company reorganization process include:
- Make new acquaintances and show that you’re a flexible employee who can adapt at any time, regardless of how fast the change requires
- Remember, communication is key. Don’t assume your new role without getting adequate information via communication
- Evaluate your position at the organization
- Recognize the reorganization as an inflection point and a stepping stone to a better role
- Avoid gossip from the grapevine
- Don’t share negative feelings at work
- Solidify your relationships with the manager
- Invest in your new professional role and grow.
Knowing Your Role After A Reorganization
Re-orgs are tough on an organization and its employees. With so many things changing, it can become difficult to know where you stand and what roles you now play in the company.
Are you a manager looking to recruit employees to feel new positions after a reorganization process? Here is a guide to designing a better hiring process.