Most leaders will lead or be a part of a reorganisation effort (a reorg) at some point. And for good reason: two thirds of reorgs add value. In a world which is facing accelerated change they are increasingly necessary: whether automation in manufacturing, electric vehicles in automotive, renewables in energy, new platforms in marketing, or Brexit in government.
Even Lego has recently announced a reorganisation of the company to drive growth and brand cohesion: interesting, as reorgs sometimes seem like a complicated Lego puzzle.
But, unfortunately, everyone hates them.
Imagine, for a moment, that you would launch a new R&D initiative, capital project or product without stopping to ask if it made sense to do so; that you would design that initiative based on a few high-level Powerpoint slides of 'best practices' gleaned from your competitors’ activities, without regard to your own company’s strengths and weaknesses; that you would attempt to keep the whole thing hushed up, despite having a team encamped around the CEO’s office; that you would declare victory for the initiative when you had a few high-level sketches of the concept; and that you would face with equanimity the fact that the whole process would upset your staff and cause a number of them to leave. No leader would do this. But that’s the way most reorgs are run.
As a consequence, only one in six reorgs delivers the planned objectives in the planned time.
It does not need to be this way. Reorgs can deliver more value and cause less upset. In our book, Reorg – How to Get it Right, we lay out five simple steps, based on our combined 25 years’ experience and a survey of 1,800 executives: first, how to work out the costs and benefits over time; second, how to assess the company’s current strengths and weaknesses; third, how to develop multiple options for the answer and choose between them; fourth, how to get the plumbing and wiring of your new organisation right; and fifth, how to check it is delivering what you wanted and to make course corrections if it is not. It is not rocket science.
As a leader, whether running the whole reorg, or a part of it, there are three things you can do to ensure success.
Insist on a solid business rational
According to our survey (and commonsense!), “a leader’s desire to shake things up round here” is the least-successful reason for a reorg. If you are running one, you owe it to your staff – who will be disrupted – to ensure that it is worthwhile. If you are a leader involved in, but not running, the reorg, ask the question. In a JV situation, a young British leader asked the CEO of their Asian partner company for the rationale behind the reorg. Her colleagues were worried, but the CEO saw it as a very reasonable question.
Get involved - and involve your staff
Oftentimes, leaders outsource their reorg to consultants or HR because it feels too complicated or upsetting or – worse – because it gives them plausible deniability. HR and consultants can help, but it will be you leading the organisation that results. So get involved and shape the answer. Involvement is also a way to diffuse opponents. Don’t go around difficult leaders: involve them in the process or they will trip you up later. One such leader told us, at the end of a reorg, “I don’t agree with the answer, but I can’t fault the process and the fact that people listened to my views, so I’m prepared to accept it”.
Communicate with your staff
In an interview for the book, Iain Conn, chief executive of Centrica, who has led three major reorgs, told us: "You need to treat people with real respect and dignity, telling them what is happening and when. You need to keep communicating with people. The biggest mistake is to communicate once and think you are done. You should keep communicating, even things people have heard already, so they know that you mean it."
Your staff are worried. So, even if you don’t know the 'answer' yet, tell them what is happening, when, and what it means for them. Don’t think that you can keep the reorg secret: news always leaks out and, if it comes out this way, you are instantly on the back foot.
Reorgs are never simple. There will be some upset. But, if you follow our five steps, and remember the advice above - if you can keep your head when all about you are losing theirs and blaming it on you – then you will deliver more value and minimise the upset.
Other resources of interest
- 15 February 2017