During tough times, many organizations must re-organize to maintain their profits. Some do it just to survive. In this blog, John M McKee discusses some key issues to consider before starting and then afterward.
In the past week, I've had conversations with two companies regarding their plans to reduce headcount and re-organize how they do business. This leads me to think that there must be a great deal of discussion in many companies about the same thing currently.
We are in challenging times. Consequently, companies are smart to take a critical look at their organization's structure, players, and roles. Done well, a re-organization can be a very smart approach to make a company perform better, reduce overhead, and improve communication. But done poorly, it often causes a more rapid downward spiral of bad results.
As a coach who works with corporate execs as well as business operators, I get asked this: "With so much literature on the topic of re-organizations, why do so many companies fail to achieve their established goals?"
Working with many companies and executives is like having a backstage pass to a rock concert. Sometimes it's great. In those cases I see each player performing flawlessly. Other times are bad, with results that are unsatisfactory for everyone involved. It's always interesting to see how executives go about making decisions. Some take advice and use it to do their jobs better. Others won't even consider that option.
- I've found that each have reasons which be grouped into a few categories:
However these different style execs make their decisions, the hard part is the execution. I've been involved in quite a few of these. Personally, I was once appointed to head a competitor company after we acquired it. We needed to cut back on redundant staff very quickly - affecting thousands. As a coach, I've helped others to figure out the best structure and then get it enacted.
Once you've made the decision to proceed, it can be less painful for everyone if you remember these three things:Communication - even if there's nothing to say, use an e-mail "letter to the boss" address where people can deal directly with you. If you don’t have time to manage it - have someone in HR preview it for you Timing - don't roll it out a bit at a time. Remember the old adage, it's better to pull the bandage off quickly than slowly - it's going to hurt either way but it's better to get it done all at once. With clarity the rest of the organization can get back to work Measure twice and cut once - If very drastic action is required, face the facts and cut expenses to the bone. You can add people back but delaying action resulting in a constant round after round of additional cuts is demoralizing - at the least. It can lead to a loss of your best performers (the ones you don't want to lose) because they're seeking a safe place and fear getting axed. Then you're left with the worst players, which is not a great outcome. So cut as much as you need and then a little more. And then tell everyone that the changes and RIFS are complete so they can settle down and focus on what's needed for everyone to move ahead.
A well executed re-organization can be like a good boost of energy with most people affected moving onto the next steps in their lives regardless of how they were personally impacted. A poor one will cause ongoing pain for many and over a long period.