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It is normal for the structure and flow of a business to evolve and change over time. When this flow happens slowly and naturally, the greater organization will hardly notice the small incremental adjustments to how the business works. When the changes are big and sweeping everyone notices, because they are likely impacted, whether positively or negatively.
Reorgs can either propel a business to further success or halt progress in its tracks. When rolled out correctly everyone will understand what has changed and why. They will have a clear understanding of what their role is in the organization and how they will contribute to the greater goals admission of the business. When it's done poorly, people will be confused, won't know what their role is if any and will start to spin conspiracy theories about what's really going on.
Whether you are a leader that has designed and rolled out the reorg or a leader that is impacted along with your team, you have the ability to help people through the changes that come along with a reorganization. What are some of the major mistakes companies make in reorgs and what can you do about it to make them more effective?
Lack of Transparency
A lack of transparency can create a whole host of problems with a reorganization. These typically occur because leadership is afraid that if they let the cat out of the bag early they will distract their team from their core mission. The problem with that line of thinking is that large reorganizations require multiple individuals across multiple departments. People will begin to talk to each other about those changes and the news will leak across the greater organization. Now instead of having a fully communicated plan, you have a portion of a plan communicated to the field. People will begin to fill in the blanks themselves and cynically will look for the worst possible scenario. Because a dramatic rumor is more exciting to retell than a boring one, the worst possible scenario will sweep across the organization and you can have entire teams that are unable to perform at a high level.
Instead of attempting to hide the truth from your team, tell them what's going on. Tell the organization that you are working on what the next structure of the new company will be. Tell them that there will be sweeping changes to how things function and layout the ideas that you're sure about. Be honest that some people or teams will not be a part of the organization going forward, but that' it's based on productivity and impact on the success of the business. If you haven't worked out all of the details, be honest about that too. People are already going to have heard the rumor of the reorg, there's no point in hiding that truth because by being transparent, you build trust and faith in your teams. By hiding it you create distrust and fear. Treat your team as professionals and give them the benefit of the doubt in being able to work professionally through the transition.
I have a friend and peer that went through a reorganization that wasn't really complete. It had the big ideas figured out, but none of the smaller details. This wasn't a situation where the leadership team communicated the reorg and the big sweeping changes ahead of ironing out the details. This was a reorg where only the big sweeping changes were implemented and the rest of the org was left to figure it out. Weeks and even months later, the teams were waiting for details on what their job or org structure was supposed to look like. People were distracted because they weren't sure if the reorg was complete. They were instead constantly talking bout what the next step was going to be.
Worse, after the initial major changes were announced there were so many questions left. People asked, who is my boss? We don't know. What team do I work on? Not sure. What division am I a part of? One of three. Do I even have a job? Maybe or maybe not, we don't know. Those were the answers they got when they asked those questions about their reorganization. What a mess! Can you imagine working day today in an organization where you don't know what your job is, who you report to, how you fit into the company, and if you even have a job? It would be a nightmare and the distraction would be tremendous as the conspiracy theorists and gossipers went into overdrive to fill in the missing pieces. Don't do this to your teams.
When you are going to have a major reorganization it's easy to start the reorg before you're ready. As the leader of an organization division or team, you will be excited about implementing a new structure that you believe is going to be successful. You should be excited and you should communicate it to your team. What you should also do is have a clear understanding of how you expect different levels and teams to function after the reorganization. If you aren't able to figure out all of those details ahead of time, you need to engage leadership teams to identify what changes they need to make and when they need to be made. Communicate that process and those deadlines to the greater organization. Do not count on the people that you told to properly retell the plan, instead communicate it yourself, so you know that it was done in the way that you intended.
Disruption to Productivity
Anytime you have major changes in an organization you will lose some productivity, at least temporarily and sometimes permanently. People are leaving the company, responsibilities are being shifted around and new leaders are coming in to run teams they're not familiar with. All of these can have a compound effect that results in less than ideal results, especially at first. When you change who someone works with there is a natural process that must occur where the leader learns who their team is and what they're good at while the team must simultaneously learn who their leader is and how to make them happy. During that transition, people will be tentative and hesitate to take bold action. They aren't sure of how their actions will be perceived. When your team is taking on new responsibilities a similar slow down will occur. If you've always been a business analyst, but now must also provide customer service to your internal teams, you have to learn whole new skills that were the responsibility of another team prior. There will be people that can learn these, and others who simply don't have the talent for it. Again, you will have reduced productivity temporarily or permanently if too much was put onto the plate of the new team.
As a leader, you need to understand the stress that you are putting on your team during a reorganization. When possible, make the changes gradually so that your teams have time to acclimate to new leaders, teams, and responsibilities. If you can't take the team to do it gradually, you must exercise patience and be prepared to take more time than you originally thought. You must be ready to make adjustments after the fact and fine-tune the end product to meet the needs of your internal and external customers. It's ok to check your ego and admit that you may not have hit a home run, but instead, scramble and still get the reorg across the finish line.
Damage Employee Morale
When you are the person in charge of a reorganization and have made all of the changes it's easy to believe that you are doing the right thing and feel confident in the end product. There is a risk though, that you have damaged employee morale. Often times during a reorg employees will not fully understand the reasons behind the changes. Managers that were very effective in leading them are no longer their managers. People that they became friends with and worked side by side with are no on different teams or worse, no longer part of the company at all. All of these can have a compound effect that drags down the morale of your teams and organization.
As a leader, you must understand that these changes have been incredibly stressful for your team. Changing everything about how a company, a team, or individual works requires a lot of change management and a lot of empathy. When employees complain about the changes it's easy to respond with, that's the way it is so get over it. While that is technically true it disregards human nature and risks further problems with morale. Instead when your teams respond with complaints and fear you should respond with empathy. Validate their feelings and let them know that you know it was stressful and difficult for them. Be a little vulnerable and tell them it was stressful for you too. Finish with expressing confidence in the company, the changes, and them and let them know that you are there to help them be as successful as they can be.
Sometimes companies struggle to find the right balance between different parts of the organization. Rather than fine-tune things, they will have major reorganizations over and over again. This constant reorganization becomes a way of life, but also stifles creativity and confidence in the company. These reorgs usually occur for a few reasons.
- The changes weren't clear and the business goals of the company weren't effectively communicated.
- The changes were completed at a high level, but never fully implemented at a low level.
- Teams were insubordinate and never implemented the changes and they were not held accountable.
- The previous reorganization never had enough time to be fully implemented and leadership saw the lost productivity and sought to change again instead of incrementally improve the new structure.