Rightsizing Your Business: What It Is and How to Do It
Today’s business landscape can be unpredictable. With uncertain financial futures, how can you be sure you’re making the right moves to position your company for growth? This is where rightsizing comes in.
This process can help you increase team efficiency, streamline processes, and reduce overhead. It also enables you to respond quickly to changes in your market. It is an excellent choice for business owners who want to trim excess costs without drastically reducing their workforce. In this article, we’ll explore what it means to rightsize and how to use this restructuring method to set up your business for sustainable growth. Here’s what to know.
What Is Rightsizing?
Rightsizing is a proactive approach to restructuring your business that doesn’t only focus on cutting jobs. Instead, the goal is to align your business with your current needs and allow you to make changes quickly, constantly adapting to shifting markets as needed, without always sacrificing talent.
For example, if you need to cut costs but aren’t looking to downsize drastically, deciding to rightsize will offer you different ways to cut costs in addition to unavoidable layoffs, such as:
- Shifting staff to different departments.
- Streamlining operations and processes.
- Leveraging technology and innovation.
- Reevaluating real estate costs and other company assets.
By taking a more strategic approach to reshaping your business, your new organizational structure can work more efficiently.
How to Use Rightsizing to Restructure Your Business
Once you decide to rightsize your business, these steps will help you decide how to approach it:
1. Identify areas for improvement
First, you must assess which business areas can be tightened and how. You will want to determine the efficiency of:
- operations
- workforce
- technology
- resources
- real estate
Look for indicators that point to problem areas, such as declining profits, production bottlenecks, redundancies, and changes in demand. This will help you see where to rightsize to make the most significant difference.
2. Evaluate your workforce needs
Though rightsizing can help you minimize the need to downsize, which will help you keep top talent, it’s essential to factor in excess or underutilized employees. Start by analyzing each employee’s skill set and job responsibilities. Review performance reviews and compare the feedback to productivity metrics to be sure your teams are helping your company hit its goals.
Use this information to identify skill gaps and potential redundancies. This will help you also consider opportunities for reassignment, cross-training, and upskilling employees to meet your needs and create a more versatile workforce.
3. Streamline operations and processes
Tight-knit operations and processes save your business time and money. Evaluate where your team can eliminate bottlenecks and reduce waste while implementing automation to simplify repetitive tasks and improve accuracy.
It’s also helpful to analyze whether certain functions could be outsourced so your team can focus on their core responsibilities. You can consistently review and improve your processes to ensure your business is always running optimally.
4. Leverage technology and innovation
Today’s technological advancements can help you rightsize your company more effectively than ever. From AI to the wide variety of software solutions, many technological innovations can help your employees work more efficiently and make it easier for you to reach your objectives.
Look for technologies that can automate your processes and increase productivity, such as tools for email integration, sales pipelines, and customer outreach. This will enable repetitive and simple tasks to be accomplished easily so employees can focus on high-value work.
5. Evaluate real estate costs and other company assets
With flexible work environments and the ability for employees to work remotely, companies no longer have to invest in large office spaces. You can also evaluate your needs for large, bulky machinery or excess off-site storage.
Once you evaluate your real estate and spacing needs, consider downsizing office space or optimizing the layout. Also, identify underutilized assets and replace them with more efficient alternatives where applicable.
6. Communicate and implement changes
When implementing changes in your business, it’s essential to appropriately communicate these changes to management and staff. Transparency will help you build trust with employees.
To do this, communicate the rationale behind your changes and highlight the potential benefits for employees and the organization. Also, encourage employees to step forward with their concerns so you can address them. Be sure to provide lots of support and train managers in change leadership skills. With solid communication and plenty of opportunities for feedback, you will ensure all voices are heard and considered.
7. Track progress and continue improvement
Rightsizing is an ongoing process, and how you evaluate your company’s needs and set it up for success will help you adapt to changing business landscapes. Establish key performance indicators (KPIs) to track employee performance and measure the success of your efforts.
Use these KPIs to assess your:
- productivity
- cost savings
- employee satisfaction
- customer experiences
Then, use the insights you gain to continue making improvements, refine strategies, and ensure that your efforts remain effective.
Set Your Business up for Success — Now and in the Future
Now that you know how to rightsize your business, it’s time to plan how to restructure your company for short- and long-term success. Start with the right workforce and access millions of qualified candidates through a free trial with Monster.