Reorganizations: Make Them Work

Reorganization is in the air again. Most of them are intended to position the enterprise for its expected future.

In some cases, these reflect downsizing, or preparing to spin off a portion of the firm. In other cases, however, there is a recognition that the future will require a different pace and different approaches to work than have been used in the past. The reorganization is to prepare the way to achieve those goals.

I agree entirely that such considerations probably will require a reorganization.

It’s important, however, that the reorganized structure should clearly reflect the future — and that the work change to reflect that future. In any situation where compromise with the past would make the future unclear, don’t hold onto the past: buy-in to your changes require that the need to change be unambiguous.

“I Refuse to Change”: There are many situations I come across where a prior reorganization has “failed to take”, either when done at a departmental or branch level, or resulting from a merger or acquisition. The normal reaction of staff in these circumstances is generally “show me I need to change”.

The need stated by management in the reorganization is set aside: denial sets in.

Denial, unfortunately, often masquerades as a productivity boost.

I saw, in one client situation, a department turn in a performance just under 250% of the preceding year following a reorganization facing wide-spread denial. The point the staff were making was that they continued to work as they always had — and by putting 2.5x the work on the board they were effectively saying “we didn’t need this”. (That the changes were designed to meet an expected change in the nature of the work that hadn’t materialized on schedule was what the denial was all about.)

The reason the department was able to “carry on regardless”, without caring about the new organizational structure, was that nothing else changed.

They still had all the pieces of the process they followed, and were able to revert to the old structure to carry out the work.

If this had been deliberately broken and new processes introduced, it would have been far harder for the change to degenerate into denial.

What Matters Now? Reorganization must also show what matters going forward, and how to succeed.

This often means that the bulk of any reorganization is about process change, and identifying the nuclei of new processes that need to become cultural attributes of the group. (For instance, if you are moving from a “project” culture to an “investment” culture — as you would with formal portfolio management techniques — you might reorganize to reflect the elements of an investment culture process for accomplishing work, with a champion, or a small “office of…” structure to grow the portfolio techniques needed to drive it.

This last item shows the missing link in many reorganizations: senior management needs staff.

In particular, of their direct reports, one should be the staff adjunct holding the developmental “offices of…”, and whose leader is the person the executive can turn to with the many items key to the organization’s growth and development, so that they won’t become items living on the corner of someone’s desk.

Instead, they will get attention, and be integrated into the organizational model as a whole. Only when the other areas — the “line” operations under the executive — need to change would another reorganization be considered: all other change is process (a change management issue) and championship (a cultural development).

Fewer, but more comprehensive, changes, is the way to go.


About passionateobserver

I am a passionate observer of our society, the economy, and politics. Mostly I don't like much of what I see, so I write as a concerned citizen. To the fray, I bring a background in the philosophy of history, a lifetime's reading, a work history in information technology management, consulting and education.
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