In focus: 6 success factors for reorganization

Tough times, new goals – there are many reasons for companies to reorganize. Whether the plan will succeed is determined by one question: Are we addressing the real problem or just symptoms?

Anyone who works in a larger company recognizes that the organization will change, sooner or later. Whether corporate management has to cope with a crisis, whether they strive for a new market, prepare a merger or the outsourcing of services – any strategic step can lead to a situation where the structures no longer fit.

But regardless of whether it’s pain therapy or a fitness program: Only about one in four reorganizations produces the desired outcome. What’s the problem? Middle managers who don’t get on board? Employees who don’t accept new supervisors, tasks or processes? All of that may be true. But such a lack of motivation is nothing more than another symptom. The organic causes lie deeper.

What needs to be considered when a company wants to restructure its organization?


1. Take time for analysis

Even if the pressure is high to act quickly: The first step takes time. To avoid fiddling with symptoms, the fundamental problem needs to be understood. Let’s assume that the symptom is a declining market share. Then the question is: What’s going wrong in the parts of our organization that deliver value to our customers? Where do we lose sales to competitors? It may not only be about structures, processes and competencies, but possibly also the entire business model or the positioning on the market. In this phase, it is indispensable to receive input from the areas that work for the customers in the front line. 


2. Develop the organization from the outside in

Staff working in sales, stores or customer service help to identify the fundamental problem. But after that, they shouldn’t  be thanked and left out of the loop. Such market-relevant units have to participate in the reorganization. What do they need to work more successfully? If they lack individual responsibility, for example, the reorganization will start at this point. The new structure develops from the outside in, from the end of the value chain towards the inside of the company. In other words, it is not created in secret at the board level, but in a broader discussion. This can lead to friction, but it allows objections to be raised early on. A neutral project management team can help to moderate this dialog.


3. Focus on roles

Who will be assigned which position? This question is associated with strong interests – and possibly fears. Leaders have them, too. They fear for their jobs, their influence, for cherished tasks or for collegial relationships. Such self-interests stand in the way of rational solutions. Therefore, the rule is “function before person”. After the essential roles for the new organization are clarified, suitable candidates come into play.


4. Prepare for resistance

Accepting a new team, unfamiliar processes, even a relocation can be really hard. As an employer, you will need convincing arguments for that. It won’t be enough that the board presents their change story: Why do we absolutely need this reorganization, and how will it benefit us? Managers at all levels must have answers to these questions. Their messages mustn’t be detached, but relate to the day-to-day work of their teams. A good way to develop such arguments are leadership workshops.


5. Allow discussion

A decision is a decision, but that doesn’t mean that everything has been said about the new organization. The (top) management should face up to critical questions and offer regular opportunities for this. This may involve large or small dialog rounds or, if needed, special formats for discussing sensitive issues anonymously.


6. Measure success and keep an eye on risks

Is the new organization successful? This judgment should not be made by employees talking in the coffee kitchen. Key figures and milestones must be clear from the start. The company must also be open about the fact that the reorganization will take time – and not everything might go according to plan. For example, employees may be less productive during the transition. It’s important to be aware of risks and communicate about problems as they arise.

In the end, it pays to be honest about achievements and shortcomings. This makes it more likely that employees will continue to trust your company, which is crucial. The next reorganization is bound to come.


2022-12-05, grosse-hornke

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