There’s a specific word that all employees loathe. It evokes fear, anxiety, and a swell of negative emotions. ‘Reorganization’ or its common shorthand ‘reorg’. The word sends shock waves through an organization. The inevitable question? Is my job at risk?
Contrary to popular belief, reorganizations need not be earth-shattering events. With the right approach, a reorganization can prove tremendously successful. As Charles Darwin once stated, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.”
1. Engage key stakeholders when developing a strategy and plan of action
Reorganization plans should not be conceived and formulated by a small select group of senior executives. When I assist clients in carrying out reorganization efforts, I help them select a sufficiently large, dedicated team of stakeholders who are equipped to jointly determine the best talent strategy based on 1 to 2 year business forecasts, the fastest plan of action, and the most inclusive communication and rollout approach.
When embarking on a reorganization, it’s important to determine which stakeholders will be most heavily affected by the rollout and most useful to engage with. These key stakeholders should have the opportunity to share their assessments and make suggestions. If there’s no opportunity for them to voice their opinions and contribute to the effort, they’ll be less likely to support, commit to, and embrace the change. Of particular import, is their input with regards to placement of talent in other areas of the organization.
2. Build a strong platform for ongoing communication
After the strategy and plan of action have been solidified, it’s typically most effective to adhere to a multipronged and multilayered communication strategy. As the CEO presents the business need fueling the reorganization (such as closure of a product or plant), frontline and mid-line managers initiate and facilitate ongoing discussions with employees on group and individual basis. These discussions should focus on employees’ needs and questions, not on safe topics like the business case for the reorganization. Transparency and courage are critical. If layoffs or employee redeployment are set to occur, employees should be aware of this early. Lack of clarity will only breed anxiety. Lack of transparency will give rise to a ‘broken telephone’-like phenomenon whereby misinformation and rumors spread. Front line managers need to be trained on asking questions, listening, and problem-solving with affected employees. Some of their employees might be able to find positions within the company, especially with their help. The more information employees have, the more choices they have, and the more trust in leadership they have.
I have helped companies through 3 booms and busts in the San Francisco Bay Area, and it’s very common for employees to return to companies who handled reorganizations well as either contracted or employed staff. Talent can choose amongst the best companies in the world, so make it easy for them to choose your company by handling the good times as well as the bad with a sophisticated leadership approach to reorganizations.
3. Communicate frequently
Frequent communication is critical during reorganization efforts, both with employees whose jobs are changing or at-risk, as well as employees who are destined to remain at the organization and who will be critical to its future growth. It’s always best for communication to occur in-person (especially at the onset). Bill Gates has stated, “I'm a big believer in electronic mail, but describing the details of a reorganization to employees is the kind of communication that is more effective in person.”
The more frequent the discussions, the higher the levels of understanding and acceptance among employees. When employees are treated with ease, respect, empathy, and dignity, they will be best supported, support each other best, and trust you more. The more frequently messages are repeated, the better they'll hit home and sink in. And communication should be a two-way discussion. During one of my client's reorganization efforts, communication efforts were so strong and frequent that they triggered an additional reorganization effort…conceived by the employees themselves! They identified the need for a new tier of customer support, which leadership had overlooked. The result was highly successful.
The numbers aren't stellar by any means. According to a 2016 study by McKinsey and Company, approximately 60% of S&P 500 companies had launched large-scale cost reduction and reorganization initiatives during the previous five years. Only 26% of those companies managed to prevent costs from creeping back up.
Fortunately, reorganization doesn’t need to spell doom and gloom. A successful reorganization effort is possible with the right preparation and execution. An executive coach can help guide you in spearheading successful reorganization efforts (as well as other change management initiatives). Coaching can equip you with the tools and tactics necessary to establish a clear vision and strategy and communicate with employees in a way that maintains high levels of engagement, morale, and creativity. If well executed, reorganizations can set an organization on a powerful growth trajectory. As John F. Kennedy once said, “Change is the law of life and those who look only to the past or present are certain to miss the future.”
Nadine Greiner, Ph.D. provides Executive Coaching and Human Resources solutions. Her mission is to make the executive experience exceptionally enjoyable and effective. She believes that the world needs great leaders and has dedicated her career to helping them.
As an organization psychologist and former corporate CEO, Dr. Nadine understands the pressures and demands executives face. She offers her clients the high expertise that only comes with three decades of consulting success, and a dual Ph.D. in Organization Development and Clinical Psychology. Dr. Nadine is an in-demand speaker, teaches in doctoral programs, and coaches other consultants. She is the author of two books: ‘The Art of Executive Coaching: Secrets to Unlock Leadership Performance’, and of ‘Stress-less Leadership: How to Lead in Business and in Life’. amazon.com/author/nadinegreiner