The Reorganisation Malaise

With the economy recovering, now is the time when companies go about reorganising their various business units for accelerated growth. There is a certain merit in re-organising businesses to bring in new leaders with fresh ideas. But most often when very many business groups are re-organised it causes more harm than good.

Humans, by nature, prefer status-quo to change. With re-organisation comes change and with every change, people become more uncomfortable. Few heads will roll. While some of the leadership changes are needed, others become causalities through no-fault of theirs. When a change happens at the top, it takes some time before changes are made down the hierarchy. While the new leader takes stock of the situation, before restructuring the group, guesses on who would be axed becomes the hot topic of water-cooler discussions. Employee motivation is not at its best. Uncertainty and chaos, during these times, do not get the best out of the people. The constant fear about what would happen to the organisation, whether the projects would be cancelled etc., creates a negative feeling which is not healthy for any organisation.

Leaders existing in the middle rung -who are usually unaffected - face challenges of a different sort. The new leader he reports to may have come from a different domain and may not have a good appreciation for the work his team does. He has to establish a good relationship in his role and also re-establish the credibility of his team with the new boss. Remote teams in different geographies face greater challenges. They wonder if the new boss would support the remote team or not. Cultural differences also play an important role in the relationship.

The new boss may have a different approach and his expectations from the team may be different as well. The team has to adjust and get used to the expectations of the new boss. If his suggestions result in a better process than the current one the team benefits. But if the suggested changes are just a different way of doing things, then it causes more overhead for the people. Off-site meetings, new review meetings etc., add to the overhead and hamper the productivity of the group. Even the human resources (HR) team is not spared. Instead of their focusing on core HR functions, like talent development, they will be busy managing the communication and the outcome of changes.

Sometimes the re-organisation makes a few roles redundant. People in such roles have to put up with the embarrassment till they find a new job. Sometimes old peers may become your boss or vice-versa. One has to adjust to all such changes. Uncertain of their future in the group, employees look outside for better opportunities. These unnecessary uncertainties in the organizations cause potential attrition.

The effects of re-organisation are not limited to within the company. It impacts the external customer focus and relationships. It breaks the continuity. Changes bring in new faces and they have to re-establish relationships with the customers. Business opportunities have been lost due to issues in transition of customer responsibilities from one person to another. Long term goals are compromised for short term gains. The new leader is eager to show early wins and might make decisions resulting in the short term gains at the expense of long term returns.

Given these ill-effects, why do companies still go through restructuring? The fundamental reason for change is to bring a new person with a different perspective to improve the business. The issue is not so much with changing one leader with another, but making sweeping changes to the whole organization structure. If such a sweeping change is needed - it means that all the existing leaders were incompetent. The real issue then was the wrong choice of leaders to begin with. Changing leaders may not solve the problem unless they are the right ones. Rather a better solution is to work on the existing leaders and improve them. As a strategy, having a succession plan in every organisation to ensure the right number and competent leaders are identified and trained, would go a long way.

Sometimes I feel even the leaders at the top are not sure why they make these changes. Maybe they believe in Chaos. Create a chaotic environment and expect a solution to emerge out of it. May be they believe in Darwin’s theory that the fittest survive. If things turnaround, they can claim victory. If not, restructure again. If none of this works, the next economic downturn would provide yet another opportunity of restructuring.

Given that change is the order of the day, the best one can do is to adapt to it. Accept that restructuring is a norm and get on with your job. Focus on what is expected out of you and deliver it. Seek to make yourself better and critical so that these changes do not affect your job. On a positive note, with every new boss you expand your network. You have an opportunity to pick up the strengths of each boss and avoid their weaknesses.

Happy Reading.

-Ram