As economic conditions continue to evolve in the post-pandemic landscape, organisations of all sizes are facing tough decisions about restructuring. While many business leaders focus on the financial and operational aspects of these changes, a leading business psychologist warns that neglecting the human element can lead to significant cultural damage.
“Restructures are often designed to make businesses more efficient,” explains Christen Gilchrist, a Business Psychologist specialising in organisational design and change. “But if you don’t actively support people through the emotional impact, what you save on the balance sheet, you often lose in productivity, morale, and trust.”
According to Gilchrist, the real risk isn’t the restructure itself but the aftermath. When leaders fail to maintain transparency and provide individualised support after organisational changes, employees are left in a state of uncertainty. This can quickly lead to disengagement, talent loss, and even damage to public reputation.
Communication: The Critical Foundation
One of the most crucial elements of successful restructuring is effective communication, which needs to begin long before any changes are announced. Gilchrist emphasises that communication during restructuring isn’t merely about legal compliance – it’s about maintaining clarity, trust, and leadership credibility.
“Before you announce a restructure, every leader in the business needs to understand the ‘why’ well enough to explain it confidently,” says Gilchrist. “Ambiguity breeds anxiety – and in the absence of a clear narrative, people will write their own.”
This means developing a consistent message across all leadership levels and preparing managers to conduct emotionally intelligent conversations with their teams.
The Importance of Post-Restructure Support
Many leaders mistakenly believe their work is done once the new organisational structure is in place. Gilchrist challenges this assumption, noting that the period following restructuring is when cultural reinforcement becomes most critical.
“After a restructure, people are grieving the old way of working – and trying to understand their place in the new one,” she explains. “That’s the moment to double down on culture, not abandon it.”
Post-restructure support should include re-establishing team norms, providing managers with the tools to lead through change, creating space for feedback, and reaffirming the organisation’s purpose and values in tangible ways.
A Diagnostic Opportunity
Interestingly, Gilchrist suggests that restructures can serve as valuable diagnostic opportunities for businesses. The patterns that emerge during these processes often reveal systemic issues within the organisation.
“When you’re running development centres or consulting with leaders about new roles, you start to see patterns,” she notes. “The same behavioural gaps, the same leadership derailers, the same cultural tensions.”
By viewing these patterns from a systems-level perspective, organisations can identify broader development needs and ultimately grow stronger through change.
Key Takeaways for SMEs
For small and medium enterprises navigating restructuring, Gilchrist’s insights offer several critical lessons:
• Invest in communication: Even with limited resources, SMEs must prioritise clear, consistent messaging before, during, and after restructuring.
• Prepare your managers: Ensure that team leaders have the skills and resources to support their people through change – emotionally as well as practically.
• Create psychological safety: Actively rebuild trust and security after changes to prevent the “quiet quitting” that often follows restructuring.
• View restructuring as a learning opportunity: Use the process to identify organisational strengths and weaknesses that might otherwise remain hidden.
• Balance efficiency with empathy: Remember that while restructuring may be necessary for business survival, how it’s handled will determine whether your culture survives intact.
For SMEs, where relationships and culture often represent key competitive advantages, handling restructuring with care isn’t just the right thing to do – it’s a business imperative. As Gilchrist concludes, “People can handle change – even difficult change – if they understand why it’s happening, what it means for them, and how they’ll be supported through it.”
About Core Potential Solutions
Harnessing business psychology to help your teams thrive. As an independent business psychologist, Core Potential Solutions uses evidence-based coaching and consulting practices to help businesses acquire, develop and support individuals who are resilient, impactful and capable of exceeding their goals.
Christen Gilchrist is a Business Psychologist who works with organisations across the UK to build leadership capability, culture, and change readiness. She specialises in helping businesses navigate growth, restructure, and transformation in ways that protect people and performance.
