It doesn't matter if it is the integration of thousands of
employees from an acquisition into the acquiring company or a
department of 25 that feels "we're not structured right" -- most
reorganizations miss an opportunity to examine the fundamentals of the
business before drawing the boxes on the new organizational chart.
How many of us have been through a reorganization that left us
scratching our head saying, "that doesn't make any sense?"
A reorganization should make sense. The new
organization should have a logic to it resulting in better, faster or
cheaper processes or increased revenues and/or profit or better
penetration of new markets or ...something clearly defined. Too many
reorganizations leave people feeling that all you did was "move the
bologna around the sandwich." "They didn't change anything that will
significantly improve the business."
What do you need to do to have a chance of fundamentally changing
the business? It starts with the mission. What are you in business to
do? What are you trying to accomplish as a group or organization?
Now don't get me wrong...I am not looking for some long flowery
verbiage you frame and hang on the wall. I want the one to three
sentences that capture the essence of why you exist and what you are
trying to deliver. As part of this first step it is sometimes helpful
to list in big pieces the work that you do. This may bring out things
that otherwise would not have been mentioned. Describing your group's
work will also help with articulating the mission. The mission should
be a statement that can include everything you do. A reorganization
sometimes involves eliminating some of the things that you do.
Listing what you do will help with identifying what you will stop
doing at a later point in this process.
Now that you know what you do, how do you operationalize this?
What are the six or eight or ten things that allow you to know you are
accomplishing your mission? In a sales or manufacturing organization,
it's fairly obvious. In sales, the measures are total sales or sales
of certain products or the number of new customers. In manufacturing
it's producing a certain amount of product or yield rates or
minimizing down time and loss time accidents.
Determining performance measures is more difficult with staff
groups. In many cases you don't generate revenue; instead you are a
cost center. The organization expends some of its resources to allow
you to exist. What kind of a return on investment are they expecting?
What do they want to see that motivates them to expend whatever amount
you request in the coming year to do what you do?
Now that you know what you do and how your performance is measured,
what are the different ways that you could be organized? For many
groups this is the most difficult step in the process. This is where
you have to potentially shift paradigms. Most people who have taken
an introductory psychology course have seen the picture of an old
woman. When you look at the same picture in a different way you only
see a picture of a young woman. The ability to look at a picture and
see the possibilities is what I am looking for at this stage. Set
aside all the reasons why "we can't" for the time being. In some
businesses the possibilities may be to organize by line of business,
or by products, or by geography or centralized or decentralized or in
a matrix structure. Whatever the possibilities, get them out without
judging them. The more the merrier. That accomplished, the next step
is to look at strengths and weaknesses of each alternative.
Because people are always good at finding what is wrong with
something, first describe the strengths of each alternative; then look
at weaknesses. What criteria should determine your ratings? This is
where you want to go back to your list of performance measures. On a
scale of 1-10, with 1 being low and 10 being high, how well will each
of your alternative structures allow you to achieve your performance
measures? The alternative with the highest overall score should be
the one you begin investigating first. Sometimes at this point in the
process a group will decide to create a hybrid from a couple of the
alternatives. That's fine; the idea is to develop the best structure
to meet your mission and performance measures.
Now you need to complete the rest of the structure. Some groups
may be able to complete the structure easily and quickly; others may
need time and data. The biggest challenge at this stage of the
process is to complete the structure without regard to individuals
already in place. In our next issue we will complete the
reorganization and get the new organization launched.
