Suze Bragg

Reorganizing the company without destroying it
July 10, 2008

Reorganizations have a bad history--that is common knowledge.  According to an article by Colin Price, a 1995 study by INSEAD Business School reported that only 46% of 1,005 downsized companies surveyed had actually cut expenses, and fewer had increased profits or productivity.  Pressures to change and compete frequently result in restructuring or downsizing, and it all must be handled sensitively.  When the executive team and the managing staff feel the shift, they worry about their jobs, their responsibilities, their quality of life, and instead of focusing on the issues at hand, their productivity decreases.  How do you keep them motivated?  Colin Price outlines 4 mental traps that ensnare employees during this crucial difference-making time and how to avoid them:

1.  People versus performance.
People are the organization.  They create the products, the brain power, and the synergy.  They're the only reason companies are alive and in business.  Successful companies know that to succeed, they can only improve through people, not in spite of them. 

2.  Structure versus system.
Having experienced the IBM culture, I had 3 bosses in the span on 1 year and had my office relocated twice, for no other reason we could discern except for facility managers needed to justify their jobs and administrators liked redesigning organizational charts. From the perspective of the worker bee managers -- the tactile ones, not the strategists -- it appeared to be nothing more than a pissing contest at the senior level:  who can get more people to report to them.  What wasn't communicated was (1) why the change was taking place, (2) how it was going to affect us, and (3) why should be on board with these new changes.  If they were making a difference in the bottom line, that would make a difference.   But too often companies get stuck in the structural hierarchy, and spend too little time on an effective system (strategy, execution, culture, talent management, leadership, innovation, and growth through successfully managed mergers and acquisitions).

3.  Us versus them.
This is a common mentality for employees and one that can easily be avoided.  By giving the leaders the tools to lead (communication is key) and a compelling story for change, they can implement the C-suite's vision.  Too often the environment becomes more hostile instead of exuberant, and change heads in the wrong direction.

4.  Concurrent versus consecutive.
To implement successful change, it has to happen together instead of one at a time.  Nothing good happens in a vacuum, and when bundled together, effective transformation takes place.  That makes the goal/change ignite.

More information:
Corporate transformation without a crisis
Change management
A Blueprint for Business Renewel (book)

Posted by Suze Bragg on July 10, 2008 | Comments (0)