Whenever a business enters the fourth quarter of the year, everyone’s attention inevitably turns to the topic that they had already been anticipating for the previous three quarters of the year – the possibility of, potential for, or pending business reorganization. Reorganizations are interesting events in a business. Leaders have a tendency to try and keep the structural changes a secret until they can be fully announced. This tends to be a futile effort on several levels. On the first level, when people are involved, as they must be for a reorganization, information regarding the potential changes is going to get out. When a number of people are involved, or are providing input, someone will talk. If people become aware of pending changes before the full structure is in place, it can cause them to behave in ways detrimental to the current organizational structure in anticipation of the future structure. On the other hand if the number of people involved in the reorganization is held to a minimum, and the information is tightly controlled, the reorganizational changes can be withheld from the business. While this may sound like the preferable situation, in reality the lack of knowledge can cause the organization several issues as well. Instead of focusing on the business and opportunities at hand, the team will have a tendency to become more internally focused on exactly how the reorganization will manifest itself. It can also cause team members to feel somewhat alienated by the fact that they were not involved or consulted regarding potential changes affecting their careers. The best statement that I have heard to describe this situation is: If during a reorganization you present your employees with a blank page regarding information on where they will work and what they will do, you will not like the story that they will write, and neither will they. A fine line must be walked when reorganizing. Enough team involvement to get commitment and assure an intelligent and logical structure is put in place to position the business for future growth. Not so many people involved that the situation becomes unwieldy and proprietary information is too readily available and becomes distracting to the business. Some information needs to be provided to the team in order to minimize the internal speculation and distraction to the organization, but not so much information about future organizations that it begins to affect current business structures and behaviors. The key to maintaining organizational focus during and through a reorganization is going to be the length of time that the reorganization takes to complete. In general, the shorter the amount of time involved the better. Like removing a Band-Aid that needs to be changed, doing it quickly minimizes the discomfort. There will be less time for information to prematurely filter out into the organization and less time for the distraction of the team associated with speculation on the new business structures. Some organizations have tried to break down the reorganizing process into shorter or smaller steps and announce each step as a way to minimize the distraction to the business. The example would be to reorganize one business group (vertically) or one management level (horizontally) and then announce the results in an effort to keep information flowing and minimize business distraction and disruption during an extended reorganization process. Again, time will be of the essence here. Until the final reorganization announcement has been made, and noted as the final announcement, the business team’s focus cannot be fully on the customer and conducting business with them. Speculation on the wisdom of the last step and the potential future structures and moves associated with the next step will continue until the reorganization process is over. Reorganizations are rarely an enjoyable experience for anyone. Those that are doing the reorganizing are making difficult decisions that will affect the careers of the people on the team and the success of the organization in the future, while trying to make sure that current performance objectives are met. Those that are being reorganized are concerned about their careers while at the same time continuing to try and perform their current jobs. The less time that these incremental stresses are applied to either group, the better it will be for the business. If the decision is made to reorganize, the optimal approach is to generate a reorganization plan and execute it as rapidly as possible. That is easy enough to say, but in reality experience has shown that it is difficult to do.
If it has been a good year there is always the possibility of a reorganization in order to move resources from underperforming business units to growing businesses to take advantage of the market conditions. If it has been a fair year for the business there is always the potential for a reorganization in the hopes of kick-starting the business for the next year. If it has been a year of underperformance, or worse another year of underperformance, chances are that a reorganization is not only a probability, it is probably pending.
