Hmmm… Reorganisations, we all bear the scars…

I remember my first experience of ‘reorganisation’. It seemed an ordinary day until word got round that people were being called in and made redundant. We waited all morning for the tell-tale single ring on our phone which could mean the end of our time at the company. I survived, and so got to see the months of disruption with staggered departures, reallocation of work, leaving parties and collective resentment. The relationship between us and the company changed that day. It was never quite the same again.

Since that time I’ve had far too much experience of imposing reorganisations. There were always good reasons. We always agonised about how to minimise the impact – on the company and on individuals. Every one significantly dented the performance of the organisation in the short term and damaged the relationship with its people for much longer. Very few made a positive difference to performance. Even the cost savings were elusive – with people being moved rather than removed, fixed costs replaced with interim/consultancy and a rapid regrowth of lost positions the minute we stopped watching.

No leader I know wants to reorganise/restructure/downsize if it can be avoided. Most end up doing it anyway though – and with depressing frequency. Why should this be? And, more importantly, how can it be avoided?

Some reasons for the reorg

There are many reasons for reorganising. Some of the most common are:

  • Cost control/rightsizing. The organisation has become bloated, or too costly to sustain its pricing and sales. Surgery is required to bring the cost base back into line.
  • Resources in the wrong place. Changes in the focus and work of the company require more people or investment in some areas and less in others.
  • Joining broken processes. Friction and a lack of co-operation at the boundaries between departments cause serious problems in critical processes. Many a reorganisation has been conceived to bring the warring factions together under one leader.
  • Shuffling the leadership pack. We all know it’s illegal, but it happens. The Leadership Team look at their cadre of leaders and know they need to weed out a number of weak people. But to do this through performance management takes months (at best) and absorbs huge amounts of management time. A reorganisation and a few ‘targeted redundancies’ can cull dead wood and create vacancies for fresh blood. Just as long as you don’t get caught and end up in an employment tribunal!

Every reorganisation is a leadership failure

Every one of these reasons for reorganising can be avoided. If a Leadership Team consistently attends to its cost base, resource deployment, process effectiveness and leadership underperformers, the problems can be managed on a continuous and low impact basis. Instead, most teams come to these issues only when one of them is approaching crisis proportions.

The reasons for this are easy to understand. Every leadership team has a hugely crowded agenda and struggles to keep abreast of the immediate challenges. Questions about whether the cost base is getting out of control or if more should be done about leadership capability are hard to address properly. If raised, they are usually dealt with relatively superficially. The tyranny of the urgent almost always trumps these important, but less immediately pressing, big topics.

The paradox is that failure to address these issues earlier and more consistently is THE problem. You don’t have to look far under the skin of each of the myriad of issues clogging up most Leadership Team meetings to find problems with leadership capability, mismatched resources or problems of cross functional co-operation. Unlike a lot of the other things on the agenda, only the Leadership Team can address them.

Today’s challenges are very often the product of yesterday’s failures to address yesterday’s big issues. Every leader knows this—but it’s hard to find time to begin first to understand and then to address these things consistently and effectively.

 

What’s less popular than suggesting a new meeting?

There are some things I can predict in every Leadership Team engagement. In my initial conversations with the team, the conversations are always dominated by the challenges with culture, leaders of insufficient quality below the team, cross functional issues and resourcing issues in critical areas.

Equally predictably, in the case of one client, no-one was surprised when I showed them how common their concerns were. What was surprising (to them at least) was that there was a huge mismatch between their concern about these issues and the amount of time spent addressing them at Executive Team meetings. People issues rarely got on to the agenda—and were almost invariably the ones to get bumped off when time ran short.

Before the first workshop I discussed this with the MD. I suggested that they needed to find a regular chunk of time to work through these issues. I thought I was going to lose the job before it started! He almost bit my head off and was adamant that they already spent more than enough time together, and that there was no need to add even more meetings to their diaries.

The days we spent away on the programme broke the pattern. In addition to conversations about Ambition, Priorities, Relationships and Accountability (which prompted thorough and robust discussions about the cost base) the team talked deeply about resource allocation, leadership quality and cross functional collaboration—amongst many others.

The discussions were difficult. Even properly understanding these slippery subjects was challenging and finding solutions was no easier. The time and space afforded by being away together allowed them to dig deeply into them and find ways forward. Small, incremental changes were made as well as some big decisions. As well as practical and tangible outcomes, each team member started giving much more focus to these issues in their everyday work.

Things didn’t change immediately. They never do with such issues. To their credit, though, the team kept the focus on what they knew needed to be done. Quick wins started to be supplemented by bigger changes around them. Within 6 months the results began to shift, erratically at first and then more consistently.

By this time the programme had ended – but the results kept flowing. At the last workshop we discussed how they would build on and sustain progress. The first thing that came up was complete unanimity on a desire to continue with their monthly awaydays and to dedicate half of these to people issues.

I smiled at the MD. He smiled back.

 

Unlocking true prioritisation in your team

Reducing the need for reorganisations is not easy—but neither is it complicated. It requires putting people issues, in their widest and most strategic sense, on the Leadership Team agenda and having regular, robust and rigorous discussions about:

  • How close is our cost base to what it needs to be to sustain our planned sales and margins?
  • Where do we most need to deploy additional resources to meet our goals—and from where can we fund those?
  • Which boundaries, and in which key processes, most need to operate more smoothly?
  • Who are our bottom 10% of performers in our leadership cadre who report to us – and what more can we do to confront each situation?

Every one of these conversations will be difficult. This is not least because people fear they might lead to a reorganisation! The follow-on question from each one, however, is to ask:
‘How can we, as the Leadership Team, move faster towards what we need on a
constant basis rather than a “big bang” reorganisation?’ 
I hope you can use these ideas yourself. If not, and you’d like help – even if only to think through how you might do so – then please get in contact on 0845 519 7871 or by email.

Read more

Please visit our website to read more about The Six Conversations Leadership Team programme or download our article, the Seven Illusions of Leadership which shows what it looks like in practice – based around a real case study.
 
Better still, give us a call on 0845 519 7871 to explore your issues further or to arrange a free Strategy Session.

Chris Henderson