The Effects of a Corporate Restructuring Strategy

Corporate restructuring is a legal maneuver employed by a company with too much debt and not enough income or a business model that is proving unsuccessful. The effects of restructuring are varied and range from nervous nail-biting from shareholders to employees wondering about job security. A corporation with a well-honed restructuring strategy can mitigate these initial worries and emerge a leaner company with a profitable business plan.

Find the Specific Problem

    A corporate restructuring strategy must determine and effectively target the specific challenge or problem the corporation is facing. This allows the corporation's rebuilding efforts the best chance for success without hindering any parts of the company that are currently working well. At its best, a restructuring is a highly targeted surgical strike that fixes the problem without dismantling the whole company to do it. A restructuring strategy that lacks direction can often cause more harm for a corporation by worsening an existing problem and weakening functioning departments or business strategies.

Management Understanding

    All levels of management must have an understanding of the corporation's overall restructuring strategy. This allows managers to prepare employees for possible changes within departments, and to develop new operational strategies to meet shifting corporate priorities. Managers may also have to prepare for the possibility of difficult business decisions resulting from corporation restructuring. Department sizes many shrink, causing employee layoffs along with pay cuts for managers. Departments may also merge with other departments in a corporation as a result of the restructuring. Managers must understand how the corporation's new leadership structure operates in order to ensure that productivity stays at a high level.

Effects on Investors

    Corporate restructuring makes investors nervous. This can cause a stock sell-off that decreases the overall value of the corporation and exacerbates the underlying reason for the restructuring. 

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The 3 Most Powerful Marketing Strategies You Should Use in 2013

A large percentage of your audience and customer base will be making important decisions and resolutions to get started in the New Year and your business can only thrive if you get to them.

Marketing has changed and the power no longer belongs to those with the big budgets but to those who are patient and smart.

Advertising to drive-by visitors is becoming more expensive and less effective.

Here are the 3 most powerful marketing strategies you should try in the New Year; each strategy is backed up with case studies to prove its effectiveness.

1. Create a Content Marketing Strategy

Whether you’re a startup, an individual blogger selling products and services or a freelance consultant, creating a content marketing strategy is the best form of marketing you can get right now.

    “Content Marketing means creating and sharing valuable free content to attract and convert prospects into customers, and customers into repeat buyers” – Copyblogger

Contrary to interruption marketing, the idea behind content marketing is to consistently offer quality content closely related to what you’re selling, with the aim of educating people so that they get to know, like and trust you.

Essentially, you’re giving away free content through various mediums in other to attract a legitimate customer base; these customers already know, like and trust you so they have more long-term value compared to customers from other forms of marketing.

You can leverage content marketing by creating whitepapers, special reports, building an email list, starting a podcast, using video marketing and other mediums that help you deliver great content for free, but one of the most effective ways to use content marketing is by starting a blog.

If you’re only going to leverage one form of content marketing, let it be blogging.

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The 7 principles of a successful restructure

Chances are, you’ve had to make some changes to your company’s internal structure in response to the economic downturn (and in preparation for the slow recovery). As with everything in business, restructures can be done well and they can be done poorly. Here are seven principles to help you avoid unnecessary complications.

Even as the economic outlook appears to brighten, the fact remains that many organisations can no longer operate as they had been. A key feature of this changing landscape is the need for organisations to restructure.

Here are seven broad restructuring principles to help make any restructure a successful one.

1. Align structure to strategy

All restructures must align to strategy. This may seem self-evident, yet a significant number of organisations fail to do so. For example, if local conditions are a predominant factor, then stress local sales and marketing functions rather than a centralised behemoth that then tries to matrix with local elements.

2. Reduce complexity

Simply put, complexity costs. Whether it is a complex organisational structure, a complex product offering or complex transactional processes, the added cost of complexity can be a drag on performance.

To mitigate complexity, there are three considerations that help with organisational design:

    Design structure for strategy before you design for specific personnel. Organisational redesigns which are a compromise between strategic intent and line management preferences inevitably add complexity. So, while internal political intrigue is unavoidable, at least start with a clean and clear design that matches to strategy.

    Avoid making leadership roles too complex (see principle #5).

    Minimise the use of matrices. They introduce measurement overhead and a lack of clear direction to the staff.

3. Focus on core activity

Remove noise (inefficiency in processes) and enhance core before restructuring roles. This means that you will need to know what people are doing today by obtaining a detailed understanding of tasks by role. 

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Effective Corporate Turnaround Strategies

With corporate insolvencies at an all-time high and set to get worse, it’s worth taking time to review best practice turnaround techniques to ensure your business is prepared for any collateral damage.

This year the Australian business community will have to deal with an estimated 15,700 corporate insolvencies.

This equates to a financial impact on our economy of approximately $15billion – and don’t forget every insolvency has a flow-on effect, so the impact will be felt by another 700,000 businesses.

The good news is that it IS possible to make a positive impact on our country’s rate of corporate failure and business distress.

Turnaround management is a relatively new field in Australia, and as more businesses become aware of it this will make a positive impact on the rate of corporate failure and business distress.

Guiding Principles

The following points should be top of mind when developing or executing a turnaround plan.

Stakeholder management is the key. Of course, it is important to focus significant attention on financial and operational restructuring, but any business that puts its attention here and ignores stakeholder management will suffer the consequences.

Good stakeholder management involves communicating with all key parties – financiers, employees, shareholders, creditors and customers.

Turning a business around is as much to do with maintaining confidence as it is to the initiatives being executed.

Most turnarounds fail due to insufficient focus on stakeholder management, particularly employee engagement.

It’s also important to remember that very rarely is there is quick fix in turnaround situations.

In the majority of situations the Board or CEO need to come up with one or two big strategies around which the turnaround plan can be built. This could mean a fundamental change in the business model, selling off non-core or non-essential assets/businesses, paring back the business to its core or maybe even an acquisition or merger for greater economies of scale.

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The Three R’s of a Turnaround

Every turnaround is unique, tricky, and tough. It requires both brute force and finesse to balance many variables. If there were easy solutions a turnaround would not be needed.

Even though every situation is different, there are common denominators in how to approach them for the best results.

Action is normally needed in three areas: RESTRUCTURING, RETOOLING, and REFOCUSING.  We will deal with each of these separately in describing how they were carried out in the turn-around of Scientific Atlanta.

1. RESTRUCTURING calls for actions to return to financial stability quickly- making the changes needed to get volume, margins, and costs in line to reduce losses and negative cash flow. Since poor financial performance is just a symptom of greater problems elsewhere, rebuilding profitability and cash flow is likely to require changes in the second two action areas.

 2. RETOOLING rebuilds the business’ foundations- putting the systems, processes and people in place to support success.  In most turnarounds, weaknesses in the basic systems and processes for doing business have contributed to the problems and have impeded a recovery. Poor management accounting systems, information systems, sales management systems, product development systems, manufacturing processes, human resource systems, and lack of documentation can stymie a turnaround.

 People are always critical to a turnaround, especially having the right ones in the right jobs. However, at the beginning they are usually part of the problem. Many have become discouraged by their inability to solve the problems. Others have come to accept poor performance as the norm, reducing the drive and commitment required for a recovery. So a key part of Retooling is always re-building and re-motivating the organization.

3.  REFOCUSING re-orients the business to achieve market success and profitable growth.  The long term solution in a turnaround always comes from making changes in the “where”, “how” and “with what” you compete.

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Tips For Restructuring Your Small Business With Clean Technology

When you're in the process of running a business, technology has the potential to makes leaps and bounds and completely change the way you do things. Instead of just conducting business as usual, taking advantage of these advancements in technology can potentially revolutionize your business. Many of these advances are also cleaner technologies, which help you minimize your businesses impact on the environment. Here are a few tips to keep in mind when restructuring your small business with clean technology.

Switch to a Cloud-based infrastructure

If you're stuck in the old way of handling your business data, making the switch to the cloud makes a lot of sense. The "cloud" is a term that refers to an arrangement in which your data is stored on a remote server. You can access the data from any Internet connected device from any location. If you currently have old servers that you're thinking about replacing, switching to the cloud would help you avoid this scenario. Just dispose of your old servers and “move” your data center to the cloud.

When you're starting a new company, it makes sense to avoid setting up and maintaining physical servers and go straight to a cloud-based infrastructure. You can save quite a bit of money because cloud infrastructures are cheaper to run and maintain, you won't need to allocate room to setup a data center, and you won't have to incur the costs that come with purchasing data center equipment.

Leverage Software as a Service

Another cloud-based technology that you might want to take advantage of with is software as a service. This is a variation of cloud technology that makes it possible for you to access software programs via the Internet from a multi-tenant, third party host. For example, you could easily access your company’s web based accounting program or sales software from your smartphone or tablet in a sales meeting or on an airplane on the way to a business conference.

These multi-tenant software models are also Eco-friendly. Businesses that utilize software as a service models generally produce up to 95-percent less carbon than businesses that run and maintain the same services in-house.

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