From the Book: Reorg: How to Get It Right by Stephen Heidari-Robinson and Suzanne Heywood
THE CHALLENGE OF CHANGING COURSE
I recall reading somewhere that the TI-class supertanker ships must travel more than 30 miles in order to reverse direction. Their engines are off before traveling the last 15 miles to dock. I thought about these and other issues as I began to read this book. They give us at least some sense of how difficult it must be for the world’s largest organizations to complete a reorganization.
THE STATISTICS DONT LOOK FAVOURABLE
- 70% of reorgs deliver some value, but only 16% deliver the results they were supposed to in the time they were supposed to. The main reasons are: employees resisting or leaving, insufficient resources, distraction from day-to-day work, leaders resisting, or the org chart changes but the way people work stays the same.
- In most reorgs, only 20-30% of the organisation changes. The knack is identifying which bit – usually to be found where what leaders think is broken intersects with what really matters in the business.
- Communication of reorgs usually fails due to ivory-tower idealism (over enthusiastic leader thinking all will be well) or wait and see (keeping everything secret).
- If the reorg team cost and likely business disruption exceeds the anticipated cost reduction or revenue increase, the reorg should not go ahead.
- The timeline should be reverse engineered from the implementation date, and include two or three immovable deadlines.
STEPS FOR SUCCESS
- Construct the Reorg's Profit and Loss. Work out what is to be achieved and how to measure successful completion. Is a reorg necessary to meet these targets. If so, accelerate the process in order to minimize upset and deliver the business results needed as soon as possible.
- Understand the business's current weaknesses and strengths. Don't do things just for the sake of it and communicate often, both in order to share information and to listen.
- Develop a new structure that is tailored to the company's needs, taking advantage of the wisdom within the organization and engaging key stakeholders. Many reorganizers jump straight to this step, say the authors. Doing so is "a fatal error".
- Design and plan implementation. This should involve setting immovable deadlines and assessing leadership in order to ensure the right people are in the right roles
- Launch, learn and course-correct. Ensure that the reorg is delivering the expected results. When things return to "normal" are targets being met?
Tim HJ Rogers MBA
MBA (Management Consultancy) & Change Practitioner
ICF Trained Coach IoD Business Mentor