Reorganizations through the lens of Human Capital

What if we placed the human element at the center of every reorganization effort? Changes in strategy, the AI revolution, rapid growth, and cost cutting needs are all factors prompting the necessity to reorganize. Regardless of the type of trigger, the aspects of Human Capital – including organizational design, change management, HR support and communication – are crucial in ensuring successful outcomes. A well-executed reorganization can be a powerful tool to unlock strategy and transform the organization. When done right, it can be a catalyst to:

• Enhance people experience
• Foster agility in the marketplace
• Invest in new capabilities for the future
• Activate modern ways of working 
• Improve cost base and operating margin

At Deloitte, our clients reach out to us to support their reorganization initiatives at various stages of the transformation process, driven by different internal and external triggers.

Last year, our Human Capital team supported a client in their reorganization and downsizing initiative following a company split. The inherited complex organizational structure, combined with a challenging macroeconomic environment and an imperative to control costs, necessitated this restructure. The goals were to simplify the organizational structure and reduce costs. We supported the client in the overall steering and in navigating negotiations in a complex matrix landscape with 14 legal entities involved across four countries. 

This year, another client we supported faced challenges in an increasingly competitive market, decreased client investment incentives, and rising costs which triggered the need to reorganize. The goal with the reorganization were ultimately to improve business performance and ensure appealing offers to customers. Despite the stressful period for the organization, the client successfully achieved its reorganization goals while retaining a focus on the human aspect. The achievement was due to a meticulously structured plan, close collaboration with union representatives, finance, and operations teams, as well as clear, timely and empathetic communication and change management efforts. We supported the client in designing change management initiatives and communication through the perspective of employee experience – what do we want the impacted employees to think, feel and do during the reorganization?

Reorganizations can be messy and complex, and it's worth noting that 70% of them typically fail to deliver on the original business case. However, what we've observed from our clients is that success can be attained by adopting a people-centric design approach that is leader-enabled, engaging, flexible, insight-driven, and proactive. The essential factors for success span all transformation phases—from assessing organizational opportunities to defining the future operating model, designing the new organization, and transitioning the workforce.

Do you need advice for your upcoming or ongoing reorganization? Then we look forward to supporting you. 

At Deloitte, we collaborate with you transparently and trustingly. If obstacles or challenges arise, we work together to find proactive solutions. We share our experiences, learnings, and ideas, and together we develop solutions that are easy to understand and customized to your business.

Do not hesitate to reach out if you have any questions or would like to hear more!

Evelina Deckel 
Email: edeckel@deloitte.se