Guidelines for Reorganizing Your Department or Company

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“Reorganization” is one of those business subjects that usually evokes a cynical response and can fill pages of Dilbert cartoons. This cynical reaction is well-deserved because it's often the result of an organizational design process that started and ended with an organizational chart, not thought leadership. Here are some of the reasons managers reorganize.

1. A key person has left. This leaves a void and an opportunity to question the existing structure.

This is in contrast to what management textbooks tell you, organization charts are usually built around individuals, not “positions.” When a key individual departs, the position should remain.

2. There are problems. These include inefficiency, talent mismatches, underlapping roles, workload imbalances, and other operational issues. Work is not getting done or it’s not being done well.

3. It’s required in order to seize a new opportunity. An example would be a new market, product, or service and your current structure just wasn’t designed to support your new business objectives.

While these are all good reasons, it’s important to consider reorganizing as just one possible alternative. There are often a lot of less disruptive ways to achieve the same objectives.

Who Should be Involved in Reogranizing?

If just the leader of the department is involved there’s a missed opportunity for critical input and buy-in.

On the other hand, if the entire is involved, the transformation can be too sluggish and self-serving interests get in the way. The best choice is finding a middle ground comprised of a leader and a small team of trusted advisers. These are usually the individuals who have enough confidence in their position with the new company to put their self-interests aside.

The Process of Organizational Change

While there's no perfect science to how reorganization unfolds, here are some pointers:

1. Start with a strategy. It’s critical to know where the organization or team is going. For example, what’s important, what’s not, and what are the specific goals? While this sounds obvious, it’s an often overlooked step. If you struggle with strategy then learn how to create one before you restructure the organizational chart. Remember, structure always follows strategy. 

2. Develop your criteria. List the problems you are trying to solve and opportunities you're seeking. Next, rate each one high, medium, or low according to priority. This becomes the criteria that you’ll use to evaluate design alternatives and to measure your success.

3. Develop and evaluate design alternatives. A lot of teams fall in love with one idea and then spend all their time either trying to justify the idea or perfect it. Instead, come up with three to four ideas and rank those against your criteria. Remember, no option is ever perfect. There are always trade-offs and risks. You simply select the best one and come up with an action plan to mitigate the risks.

4. Test the final design with scenarios.
Spend time testing the design by discussing how various business processes would work within the new structure.

These “what if” discussions help fine tune the structure and clarify roles.

What Change Leadership Entails

Before undergoing any change, you need to do your homework and a good place to start is reviewing the ”Ten Models for Leading Change.”

The Value of Communication and Team Involvement.

Communication is not a one-way announcement about the change, or anything else. Stakeholders, including employees, are more likely to get on board if you not only share the “what” and “why ” but explain the alternatives you didn’t consider and why. Let stakeholders know you realize there isn’t one perfect choice and acknowledge the potential disadvantages your plan. This kind of candor, open dialogue, and authenticity fares better than trying to “sell” your ideas for change as the perfect solution. If you treat people like intelligent adults, the respect you show will be returned two-fold along with the stakeholder's support.



Don’t expect people to understand it or buy into it right away – chances are, you didn’t at first (see “the marathon effect”).

Once you've communicated with the necessary people, don't be shy about asking for their help. It's human nature that people will support what they helped create and while your team may not have had an opportunity to create the new organizational structure, they can play a huge part in implementing the new structure. This is another opportunity for you to get valuable input in order to tweak the new structure.

Reorganizations are always disruptive and fraught with challenges and risks. They should never be taken lightly, and should always have a shelf life of at least five years. If you follow these guidelines you'll have a better chance of achieving your objectives and minimizing disruption and anxiety.