Most companies fail not because they are unaware of the environmental changes that make business structures untenable but because they become adamant and hold onto their old trusted ways . Besides putting too much trust in the old ways , such leaders also are shy to introduce and develop a new reliable structure .
We restructured the route to market , pricing , and sales organogram at Unga Limited . Luckily the board had the patience and confidence to allow a blip in sales when all these changes took place . Otherwise , most business owners panic and quickly return to their old ways when they experience a drop in performance at the initial stages of restructuring .
The finest of managers know that growth doesn ’ t follow a continuous upwards trend . Long-term growth must go up and down at different growth levels when those changes happen . The ideal time to make those small but progressive operational changes is just before the stagnation or decline in performance . At the peak of each performance level , change to make systems more adaptive should happen . So , the timing of these changes matters . Companies that carry out small , continuous tactical and operational changes to various structures to adapt to the changing
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environment may never be required to take significant restructuring .
The other best time to make these operational changes is at the maximum limit of each structure . That means management must be aware of the limitations of each performance structure . Kinoti ’ s management capacity was stretched to the limit when he opened the one branch the wife managed . And that was the most appropriate time Kinoti would have started putting systems to support other new branches . Kinoti was ignorant of how far and wide his structure would have been stretched successfully without a tactical or operational upgrade . He hanged onto his old systems for too long , and his business suffered .
When you hear a company needs restructuring , the core pillars that support performance have been overwhelmed , and no tactical or operational changes are a suitable remedy . When those small but fundamental changes happen in the business environment and management does not respond , the core tenets of business become lagged and outdated over time . A swift change in technology may also create a lag that may require a quick structural response . Online shopping , for example , has made a challenge for most hitherto successful distribution structures .
Structures that worked before and made strides in performance soon come to their limits . Whether sales or any other performance structure , management need to be aware of the capacity of each system and make a timely change just at the maximum point of those limits . Regular business environmental scans will show when changes out there require internal operational adjustments .
When those timely functional changes happen , they keep the company structures in tandem with the environment . If those timely tactical and operational changes lag behind the business environment , a restructuring will soon be inevitable . And as the saying goes , if you don ’ t mend the cracks on time , you will surely build a whole wall . Ask Kinoti .
Herman Githinji is a Management Consultant and a Director at Rhombus Ready Mix Concrete Company . You can commune with him on this and related issues via email on : Hermangithinji @ gmail . com .
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