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A Company Reorganization Isn't The Answer. Here's What Is.

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Reorganization never works. Well, maybe not “never” but, suffice to say, reorganization is typically just a quick fix for deeper-rooted challenges that leaders would rather "push off" in hopes that they sort themselves out on their own rather than confront the issues directly.

Take Sharp Corp.’s intentions to institute a large scale (read uncomfortable) reorganization to boost its profitability into the positive digits and, ultimately (and ideally) restore its brand into one of current day value.

The panel-display company’s desire to change the way it does business is understandable. After all, in today’s age where smartphones and the internet replace in-store browsing, Sharp can’t survive off the “star trek-like” experience it once created for customers who perused all those cool tech gadgets if they never enter into the experience in the first place.

Unfortunately, what usually happens in a reorganization is this: Employees are “copied and pasted” into different offices within the company, assuming that structural change will, in turn, lead to behavioral change.

But it doesn’t. It never does.

Change fails because leaders confuse strategy with execution.

When it comes to a reorganization, leaders tend to change one of the following:

1. Structure
2. Strategy
3. Culture

In reality, structure, strategy, and culture are all entwined because they define the larger system that’s known as Company XYZ.

There’s one “thing” that drives all of these elements: Behavior.

So, if a reorganization is on your mind, consider the following points before moving any large pieces of the (organizational) puzzle:

Reorganization simulates progress.
In other words, a reorganization creates the perception of progress but in reality, that “progress” is false proof. Think of it this way: Getting feedback–in everything we do–helps us decide whether or not we’re on the right track.

Feedback–even if it’s just email–is an addiction. How often do you check your email throughout the day? Exactly. And why do you check it so frequently? The first reason is apparent–to inform and to be informed. The second reason, however, is less obvious.

When you send or receive an email there’s a dopamine release within your brain that “causes seeking behavior [and] causes you to want, desire, seek out and search” (source). Newly minted managers, supervisors, and leaders fall directly into this trap of “action addiction,” because they want to:

A) See results immediately

and

A) Leave a “stamp” on their team, department, or company (because doing so creates tangible results) reorganizing feeds the same dopamine addiction because it creates false “proof” that there’s progress, where “progress” is viewed under the assumption that it’s right.

Here’s why a reorganization doesn’t always indicate progress. A Bain study conducted on company reorganizations revealed that less than a third of them (out of 57 companies) actually yielded worthwhile company improvements. In fact, in some cases, a re-org actually decreased that company’s value.

It all comes down to execution.
A reorganization is a strategy, not execution itself. What many leaders neglect when reorganizing is linking strategy and execution. And this is why a focus on behavior is so critical–to establish actionable tactics and metrics to:

1) Identify what success looks like

2) Pursue success

3) Learn from the past to enable the future

Be bold.
In today’s day and age, it’s no longer effective or efficient to change “when change is needed.” To remain competitive, leaders must change before change is necessary, and they must be bold enough to do it.

Be decisive.
Without the resources and tools to enable and sustain learning, shifting employees around from office space to office space is an exercise in futility.

Avoid knee-jerk reactions.
The ultimate purpose of a reorganization is to find certainty amidst uncertainty and mitigate organizational chaos from erupting.

If your company has been winning then a reorganization isn’t likely on the horizon. Few companies undergo a reorganization if they’re already competitive; the majority do so to build relevance and become (more) competitive. The only problem, however, is where their reorganization efforts are focused–on the short-term rather than long-term.

Don’t play musical chairs.

Remember that the challenges of today don’t solve the unforeseen challenges of tomorrow. Yes, shuffling people around will satisfy the dopamine crave for “progress” but if the underlying behavioral challenges of, say, communication and decision-making, aren’t addressed, then there will just be more of the same. people just behave the same way in a different place.

Reorganizations aren’t easy and they aren’t fun. They create stress, pressure and overwhelm for everyone involved. If the structure is truly the problem then, of course, a reorganization is the right move. However, if it’s more effective communication across silos or geographically dispersed teams, or more informed decision making that are your ultimate goals, then the root challenge is behavior, not structure.

Don't forget to check out the Next Level Coaching Group, where you can APPLY "stuff" like this to your every day through practical application.

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