The restructuring in practice – how to restructure a company?

Enterprises and the medium-sized company in particular, often ask advisors for help with their business restructuring. Recently we have had a meeting with the owner of a significant company on the Polish market of the wood window manufacturing industry. Although his company achieves good financial results and develops at pace of several percents Y2Y, he claims that it has a much bigger potential and it does not use its all assets optimally.

I am not going to define restructuring. There are many definitions, yet anyone who has carried it out knows that it does not bring anything new to the mere process. So what actually is the process of restructuring? First of all, I would like to dispel the myth that it is carried out when the company has problems. The example of our client proves that the effective restructuring is nothing more than increasing the efficiency of business in all its areas. We can distinguish the restructuring of strategy, finance, accounting policy, product, marketing, logistics, production chain, human resources, legal, and many others. During the whole process we usually focus only on one area, and in the case of companies with many problems we focus only on financial issues. Unfortunately, the problem will return in the short term.

So how to restructure our company? First of all, we should define all areas in which our company operates, yet for each subject there will be different areas. However, I believe that a good starting point is the list presented above. We should describe exactly each of these areas, its risk factors, how to secure them, how they are managed by the competition and how we can improve them. The audit is the first most important stage of restructuring. We should take a look at our company as a whole and then the prime factors should be specified in each element. Thus we create a map of processes, which we will be using throughout the whole restructuring process. Then we put the map on places in which we do not operate fully effectively. Our benchmark can be the competition, customer research, development strategy, etc.

In the next stage we determine the means and tools that should be used to help enhance our weak points. We should remember that each of the areas should have its own schedule of activities and a budget necessary for the implementation of changes. Unfortunately, every company is different so the creation of a schema of activities is almost impossible.

The next step is creation of a list of our objectives and defining the ways of measuring the effects. We need to know how our company should look like in a half a year, how to achieve and measure it. We need to know who will do it, how much it will cost and what the effects will be.

A very common mistake is assigning activities to individuals who are no longer able to work more. As a result, our plans may be as well be thrown out, since there is nobody to implement them. Remember that if the Board implements the restructuring processes, it usually lowers the efficiency of the current activity.

My aim is not to advertise our services, but please remember that such a problem does not exist when an external company is involved in the restructuring process, which has a significant knowledge of business restructuring and experts that will help the company’s staff in their daily work connected with the whole process.

Back to our meeting with the President; it was our first meeting sand was supposed to last about 1-2 hours. It lasted 8 hours and we sat talking about business to 2 am. We discussed 17 company’s areas very generally and did not finished everything.
We invite you to familiarize yourself with our services of restructuring and optimization.

Artur Stypulkowski
Senior Manager
a.stypulkowski(at)blackpartners.pl