Re-orgs redux

 I originally wrote this entry 4+ years ago, but it somehow feels relevant to re-publish, as I think the same message applies. Apologies if you are tired of hearing this from me. And if you haven't read it, then I guess it doesn't matter what I say, does it?


I have seen many (20+?, 30+? not counting) re-orgs over the years in
several companies, and there is a question these have all raised. Did
the management holding the re-org identify what was NOT working and how
the re-org would solve it, rather than just determine that something
was not working and a re-org "seemed" to be the right way to fix it?



The reason for asking this is that clearly there is a high cost of any
re-organization - everyone has to learn the new org, their new roles
and responsiblities, and usually there is an accompanying new business
model or plan which has to be developed, learned, and executed.
Frequently new systems need to be developed - compensation, job
classification, etc. - to support the new organization as well.


Before spending all this time/effort, doesn't it seem like more work
should go into what is the problem with the previous organization?
There are always good reasons why a different organization, with a
different model, can POTENTIALLY be successful in some new approach to
the business. In fact, when the previous organization was put in place
there were obviously lots of people who thought IT would be successful!



This is avoiding the tough questions as to why the previous business
model did not work. The answer(s) could be several - poor management is
one, but there is also:



  • the old organization was not given enough time to be successful (there are always start-up costs)

  • the old organization/business model was not appropriately
    staffed/supported to succeed - this failure can easily be repeated with
    a new model

  • the old organization/business model was implemented hastily by
    people who did not have prior experience with what they were trying to
    do, so there were some major flaws in it - this is also a problem which
    can easily be repeated by trying yet another re-org


What would be interesting would be to see one of these businesses hold
their management accountable for making the current model succeed, and
to have the stamina to NOT reorg without very clear identification of
what the flaws were in the last plan

Comments:

In all my reading, I have come across comments in research that supports your position. By not holding team accountable, by operating a culture with little to no trust, by being unwilling to challenge a peer (at Sun this veneer is called being nice) there is no accountability.

If you read the book "Five dysfunctions of a Team" you will see a great parable on this very subject.

Posted by Dave on September 05, 2008 at 06:22 AM PDT #

You are absolutely right about the costs, but the real reason for frequent re-orgs at Sun is we reward failure by moving the senior executive to a new position and bring in the next one who has a great idea. To cover the tracks of the previous failure, the new executive re-orgs to his better model. Sun has allowed a Frankenstein organization to be created.

The real answer is to make a executive live with his org for a minimum of 2 years and give it a chance to work. A re-org should only occur if the first year is way off (>10% off number) or caused major alignment issues. Orgs have been around forever and are not that hard to figure out; if a unit doesn't perform, get rid of the executive, not the organizational structure (at least until you have real proof that the org was the issue, not the executive)

Posted by Gary on September 05, 2008 at 07:30 AM PDT #

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