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Monday, April 8, 2013

Organization structure...any design will do!

A pretty harsh title for something that typically has such major implications for organizations, its staff and ultimately the clients it serves.  The title reflects my jaded perspective on the restructuring that I have experienced, the quality of implementation, and the real outcomes achieved by restructuring - particularly those that have promised dramatically improved organizational performance as a result.

I'll qualify my cynicism.  I'm not suggesting that any organization structure is perfect or should be held sacred and unchangeable.  Organizations should critically evaluate how they are structured and how they need to be structured to best respond to their reality and anticipated changes in their environment.  There are a number of circumstances in which restructuring may be a reasonable and rational response including diminishing revenues and profitability, loss or change in markets that a firm traditionally serviced, lack of clear chain of command or accountability for results, lack of integration or coordination between business functions or units, or changes in technology or other means by which the business accomplishes its goals.  The need for restructuring can also be reactive or proactive - driven by an externally imposed reality or undertaken in anticipation of or in support of new desired directions. 

The challenge for leaders in contemplating and implementing a change in organization design and reporting structures is that there are too many scenarios in which it is undertaken for the wrong reasons, in anticipation that it will solve all the organization's current and anticipated problems, and in too many circumstances is not aligned with other organizational systems or requirements.  Too often it is viewed as an "easy" solution, as a symbolic commitment to change (i.e., "We'll show them we mean business!"), and as ready substitute for the real and hard work of moving an organization forward.

So what's my prescription for organization redesign?  First off, be very clear about why restructuring is being undertaken.  When there are multiple or frequent changes in structure - too often coincident with changes in senior leadership - the organization rapidly loses (or continues to lose) credibility around the need for change.  In addition, it loses momentum on achieving key elements of its mandate and certainly starts to lose the commitment and engagement of its staff and management.  If an organization undertakes frequent or constant restructuring the image conveyed and the feeling created is that leadership is lacking commitment to any long-range plan, goals or objectives - "let's just wait this one out; they'll be back with another version in a few weeks/months..."  Worse yet, many begin to wonder whether senior leadership even has the requisite skill to lead if they are constantly changing structure! 

Second, organizations need to do a far better job of connecting redesign efforts to an overall plan for the business.  Organization restructuring efforts - no matter how well designed - are disruptive.  Internal communications and partnerships are changed, systems that people worked with are impacted, and corporate memory (in form of displaced staff) is often lost.  This disruption should be clearly justifiable on the basis of how it helps moves the organization forward and helps it achieve its stated strategic objectives.  If a senior leader or senior leadership team has only a vague notion of what can measurably be achieved from restructuring they are doing a grave disservice to the organization, its people, and ultimately its customers.  There should be an ability to target and communicate specific expectations in terms of improvement - profitability, effectiveness, safety - to be achieved in the transition to a new structure.  If you don't have that, go back to the drawing board and get clarity.  You will need that clarity to get others in the organization on board in a meaningful way.

I've also seen and experienced too many examples of restructuring that are about trying to deal with individuals - when leaders lack the courage or acumen to manage performance or stick to their overarching strategy.  This can manifest itself in a couple of different ways.  One scenario revolves around two or more challenging personalities, people who can't work effectively together, with negative impacts all around.  Rather than deal with this as a personnel issue requiring leadership intervention, clarity of expectations, and other performance management intervention, restructuring can present itself as a simple solution.  Restructure so that those in conflict have less to do with each other.  Problem solved!  A seemingly expeditious way out, but one that can have significant repercussions for everyone around the conflict solution.  Restructuring efforts can also driven by a desire to hold on to an up and comer in an organization - if there is not more responsibility, more recognition, more opportunity, bigger title, more money provided to an individual we may lose them to another opportunity.  So in an effort to keep that individual, an organization rejigs responsibilities that may or may not align with achievement of long-term strategic directions.  Ultimately, once the key individual moves on to the next role, the role they vacate is actually not doable by, nor maybe desirable to, anyone else.  Neither circumstance cited justifies organization restructuring.  Redesign just papers over real and unsolved issues.

Ultimately, if you are going to move forward with a new structure it needs to be planned out as if it were a major strategic initiative - because it is!  It is an effort that requires significant and engaged commitment of leadership, a commitment of communication and change management resources, and otherwise needs effective project management resources to ensure successful implementation.  Failure to make this kind of effort through the redesign - from conception, through initial implementation, through to evaluation of impact - will ensure that all of the positive gains touted will not be achieved, and that more than a few negative results may be obtained in lieu!
Recognize the human impact of the change you are undertaking as well.  The analogy of "Band-Aid off - fast or slow", comes to mind.  Many have their personal preference for pain tolerance but in the case of restructuring my advice is to move with more speed than less.  The restructuring effort is going to create uncertainty for everyone - even those seemingly unaffected by proposed changes.  And in any organization, despite the best efforts at communication, the grapevine will be moving faster than official channels and there will be as many rumours as there is fact about restructuring.  During this time of change an organization runs the risk of losing some of its best people.  They have options to move to other organizations, other careers, and other opportunities.  Don't inadvertently give them the incentive to make the change.

Finally, if it wasn't already made clear above, no organization design represents the perfect solution for any organization.  Your current structure has its problems.  A new structure you are contemplating may solve those problems but it will introduce others.  Ultimately my belief is that structure is one of several levers that is required and must be in sync to ensure an organization's success.  In this case, form must follow function and must be attuned to a well articulated mission, vision and values.  It's up to Leadership to coordinate, integrate and manage all of these components.  It's complex and demanding work.  There is no simple solution on the road to success. 

But if you looking for simple solutions and just trying to "shake things up" then any organization design will do...

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

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