Chapter 5Restructuring Without Killing Innovation and Your Future
“Restructuring” is a significant change to the operational or financial structure of a business in order to improve performance, often by focusing on efficiencies and profitability. Restructuring is accompanied by changes in how business activities and people are organized.
Like strategic planning in general, and digital transformation as one specific sort of strategic change initiative, under the right circumstances restructuring can be a useful methodology for driving needed and beneficial change. Restructuring has probably been used since the emergence of the modern organization over a century ago. During recessions, it has been utilized extensively. But in the last few decades, all available evidence suggests it is being used more and more often.
As we write this, organizations around the world, both public and private, are restructuring more than ever to cope with the effects of COVID-19 and the associated economic downturn. Right now, it looks as if large numbers of small or undercapitalized businesses will not survive. Restructuring will not save them, and in fact may make their problems worse by overheating Survive, killing Thrive, and thus undercutting innovation. This negative impact comes at a time when innovation to address a changing world is essential. If that were not bad enough, best evidence suggests the problem could actually become much bigger.
But it does not have to be this way.
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