Business Models: What to Consider When Restructuring Your Business
Change isn’t easy. After all, we’ve already got a lot invested in the status quo. Large scale change in a business means disrupting the very foundation we’ve relied upon. It means tough choices that will affect not just us, but our vendors, employees, stockholders, not to mention their families. It involves extensive, often emotionally laden discussions on what’s going well, what’s not going so well and what’s the best path forward. However to remain competitive a business must be nimble, and that means change whether we like it or not.
If you’ve come to the point where you feel it’s absolutely necessary to fundamentally redo the way you’ve done things, then there are a few things you’ll want to keep in mind.
Communicate. No one likes being left in the dark. It leads to uncertainty, which leads to fear which can leave your organization paralyzed while it undergoes its metamorphosis. When it comes time to make major changes, be ready to answer why these changes are being made and how the people around you will be affected. Don’t just shut yourself in your office. Instead make yourself available during this challenging time.
Avoid long periods of silence. When there is quiet, others will rush to fill the void, usually with a worse case tale of woe. Even when there is nothing to announce, fill the gaps in with your own narrative, explaining what changes are coming and why.
Plan ahead. If you were captaining a ship you wouldn’t plunge full speed ahead into unknown waters. No, you would meticulously plan each stage of the journey. You would ask yourself how the changes will affect your ship and try to anticipate what challenges lay ahead. At each stage you would consider alternatives and pay attention to the smallest details that would impact your voyage.
Think about your customers. The changes you’ll make don’t just affect the people within your organization. They affect everyone you do business with. If a wholesale customer depends on you for a particular service, will your restructure hinder your ability to provide that service? Leaving them high and dry might permanently damage your good name. Are you dropping a product a customer still wants? You’ll want to carefully set expectations. What should you tell them? As a general rule it’s a bad idea to announce changes before you’ve fully figured out how you’re going to implement them.
Don’t forget your bottom line. At the beginning of our series we talked about the definition of a business model as basically how you plan to make money. If you’re restructuring it means that you’ve come up with a better way. That’s all well and good, but you need to get through today in order to make it to that bright future. How will you continue to pay the bills while you’re changing things over? Will you need to work with creditors? Lay off staff? Cut expenses to the bare minimum? Like it or not these are things you have to consider.
Restructuring is a big step and will have its share of challenges. However if you plan it carefully and communicate effectively during the process, you will have a great shot at coming through with a better, more nimble company.