You’ve Made the Decision to Reorganize, Now What?
Reorganizations create a lot of uncertainty. Uncertainty creates resistance. Too much resistance can disrupt delivery of the reorganization. So it follows that one path to a smoother reorganization is minimizing the uncertainty associated with it. That begins with leadership.
With the decision made to reorganize (see Is A Reorganization Your Right Solution?), leaders can start demystifying what happens next by making two decisions; who will manage the reorganization and how to get it done.
In its simplest form, a reorganization has two stages. The first stage is Design, and the second stage is Implementation. Within these two stages are the process steps and activities. And, most importantly, within these two stages are the people who make it all work.
Let’s start with the people.
Before I dive in further, I would like to thank and recognize Andrew Chandler, Head of People & Organization Development at Genentech and Joann Lime, Organizational Development and Change Management Consultant at Limello, Inc. While working together, Joann and Andrew cleared up a lot of uncertainty for me. What follows is the result of my experiences working with them.
The Core Team
Reorganizations get very involved and you need to assemble the right people to manage the work. It is best to start with forming a core team that will see the process through from beginning to end. Populate the core team with the right roles that help design the new organization and help transition staff into the new organization. We found a successful recipe of core team roles and describe it below.
It is a good idea to keep the team small and add or subtract other team members as necessary to conduct various activities along the way. A small core team can typically move quicker than a larger team and can make rapid necessary course adjustments.
Core Team Roles
Here are the core team key roles along with a brief description of their purpose on the team:
- Sponsor — legitimizes the change for the staff. The sponsor is a credible, active communicator who can drive rewards and consequences. Through solid communication, sponsors can remove much of the uncertainty felt by the staff
- Project Manager — responsible for planning and execution of the reorganization initiative
- Human Resources business partner — provides people and policy guidance, recommendations and decisions
- Organizational Development (OD) partner — leads the organizational design work, assesses and provides recommendations to ensure alignment of strategy, structure, process, people, rewards and culture. Focused on optimizing the organization
- Change Management partner — responsible for building and executing the change management plan. Focused on managing resistance and ensuring successful adoption of any changes impacting staff
- Communications partner –responsible for building and executing the communication plan. Clear, targeted messaging is a key tool that the core team, the sponsor and leaders will need to explain progress and changes
This is a small team. Sometimes organizations are tempted to add more people from leadership to the core team but not include OD, change or communications partners.
Depending on the complexity of an initiative, more roles may be brought in. When multiple functions are involved, a business lead from each major function can be added to the team to represent their function. Yet in smaller organizations, the sponsor may play that business lead role.
We found that a reorganization initiative gets into trouble when the Organization Development, Change Management or Communications roles are omitted. Getting your organization (re)design right requires expertise and an impartial view that an OD professional brings. Maintaining employee engagement, removing employee confusion and creating a quick return to productivity requires team members focused on the people side of the change and on frequent and solid communication.
Adding and subtracting
Much like any project, with the core team in place staff can be added to the initiative for specific activities based on the reorganization process and project plan. For example, when designing the new organization, you want to include the leadership team and key staff to create multiple design options. When that work is complete, those individuals step away from the project. After designs are created, some organizations cast an even wider net to engage more of the staff in exploring the changes. See McKinsey’s article Reorganization without tears. Again, more people can be engaged on specific project activities without being pulled into the core team.
Key process steps — The How of reorganizing
As mentioned earlier, there are two basic stages in the reorganization process map; Design and Implementation. Each stage contains multiple steps and activities; some of which are conducted in a specific sequence while others may run in parallel. The intent here is not to dive into details on each step, but rather to provide a big picture view of what the reorganization process entails. Even so, there is quite a bit here.
Design stage activities
- Review mission, vision and strategic objectives
- Develop design criteria — Identify the key characteristics that will make your organization win. These characteristics become the criteria around which the organization is designed
- Complete current state analysis of personnel, roles and work processes
- Design multiple organization design options
- Choose best design based on the design criteria. Refine chosen model if necessary
- Make formal agreement on best fit design
Developing design criteria is incredibly important and shows up again and again over the course of the initiative. Design criteria form the scorecard for choosing which of the multiple design options is a best fit. They also form part of the measurement system to determine success after the reorganization has been launched.
Implementation stage activities
- Review current state employee map
- Create future state employee map based on new organization design
- Create transition plan; includes moving current employees within the organization, managing redundancies and managing any resource gaps
- Review job levels and adjust if necessary
- Create education materials to up-skill employees
- Prepare launch plans and engagement plans
- Launch the new organization
- Conduct systems changes (HR, IT, etc.)
- Conduct check-ins with employees
- Measure change for success and adjust as necessary
The Design stage provides multiple opportunities to engage staff and include their input into the future design. The Implementation stage then follows with a heavy focus on transitioning to the newly designed organization and managing the changes that will impact staff.
This seems like a lot. And, well, it is a lot! But as you move through this process, uncertainty turns to clarity; you can’t help but gain a clearer understanding of what the future organization can look like and how to help staff make the transition.
Minimize Uncertainty through people and process
Reorganizations create a lot of uncertainty, for both the people managing the reorganization and for those affected by it. Leaders can reduce the level uncertainty by taking two steps. First, create a small but mighty core team comprised of the right roles. Second, commit to using a solid process that engages staff and creates and delivers the best organization design.
This is the second in a four part series on reorganizations. The first article, Is A Reorganization Your Right Solution? provides success rate data and discusses what is behind the decision to reorganize. The upcoming Part 3 covers best practices for conducting a reorganization. Part 4 discusses alternatives to reorganizing your staff. Each article is short and intended to provide you with information you can bring into your current thinking on your organization’s design and development.