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corporate reorganization chart

Corporate reorganization is triggered by leadership transition, changes in the business, acquisitions, poor performance, and many other reasons. It has become a common place method and action that manager’s take. It is so common place that organizations and people within organizations expect leaders to make organization changes on a regular basis as part of decision making and sometimes without an explanation. It is just expected to happen, especially whenever a leader is promoted or moved to another organization.

I was part of first line management at a large financial services organization before reorganizing became as prevalent as it is today. In fact, it was the beginning of what now is a yearly event for that same company. When I was still working there as a manager, they used to decentralize and then centralize the organization every five years as senior leadership shifted and decided the previous model wasn’t their preference. That wasn’t so bad since it did shift every five years rather than yearly and there was still enough time to get something finished and establish relationships in the process. The management at my level used to laugh and plan for the reversal as it was so predictable.

It was during my experience there that I first realized (intuitively) the importance of making connections and relationships to develop knowledge and get the work done. When they reorganized our work groups, the relationships really didn’t change as we could still find the people we needed when we needed them; sometimes we just had to find them using a different path or in a different group. The relationships were built on trust and we knew who we could count on and still found the same people even if they were in a different group. That same thing held true even when they sent me to Europe to train someone new and I had to rely on those in the U.S. to call when I needed support as I created new connections and relationships in Europe.

As an example, it is like when they tear up the sidewalk you use every day when you take your dog to the park. Now you have to walk around the barriers they put up because there is fresh cement or a ditch and you find another path to get around. But you can still find a way to get to the park. It might slow you down but eventually you get there.

Reorganizations disrupt productivity and can slow down innovation. Managers in organizations today should stop making decisions haphazardly just to create an appearance of decisive action or to buy time. It doesn’t save money and might very well waste money instead. How do you know what to do if you don’t have any data or information to support it? If you are disrupting the relationships that people have built (the emerging networks) and the productivity and innovation in the workplace, then you absolutely are impacting cost in a negative way. But it takes time to find out what is really happening and get the data and information about people. That is intangible and complex, right? WRONG!

Before you decide to reorganize again – what is the problem you are trying to solve? What is the objective you really have? Make sure you know why you are doing it. Do you want to reduce costs? Do want to improve performance? Improve communication? Do you have too many direct reports? Is Reorganization the only possible solution?

Figure 1a below is a common way to ‘see’ the organization today. This is how managers make organization structure changes today. They move the people around in the boxes and sometimes move the boxes around in the organization.

corporate reorganization

Figure 2a is more likely how the organization really functions and looks. There are people in the organization that are connection and working together and some are very disconnected. The different colors represent different groups so some interact and some don’t. There are two pairs that are separated completely and only connected to two people each.

corporate reorganization 2

Figure 3a might be how you want your organization to function. How can you get your organization to function the way you really want it to? Is reorganizing the answer or is it something else? Get an Organizational Network Analysis of your organization. Get a baseline of the organization and then make an educated decision about how to shift the organization or restructure it.

corporate reorganization 3

Related Post: Managing Trust During Organizational Change

Resource: Contact us for a free consultation to learn how we can help with your corporate reorganization

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Posted on February 10, 2016 with No Comments

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