Re­org With­out Tears

Inc. (USA) - - FRONT PAGE -

MAYBE YOUR BUSI­NESS NEEDS to re­spond to a chang­ing mar­ket­place, or maybe the orig­i­nal org chart just won’t cut it as your com­pany scales. What­ever the rea­son, re­orgs are on the rise: Around 60 per­cent of S&P 500 com­pa­nies have done an or­ga­ni­za­tional re­design in the past five years, ac­cord­ing to a 2016 McK­in­sey analysis. But the con­sult­ing gi­ant also found that fewer than 25 per­cent of re­orgs suc­ceed. “That’s not al­ways be­cause the vi­sion is wrong. Of­ten, it’s be­cause peo­ple don’t un­der­stand the vi­sion or don’t buy into it,” says Gretchen Spre­itzer, fac­ulty di­rec­tor of the Cen­ter for Pos­i­tive Or­ga­ni­za­tions at the Univer­sity of Michi­gan and co-au­thor of Howto BeaPos­i­tiveLeader. She breaks down how to win at re­work­ing the old way—and ease em­ploy­ees into the fu­ture. —KATE ROCK­WOOD


If you’re all ponies and sun­shine about the com­pany on Mon­day and then or­der a re­org two days later, em­ploy­ees will feel blind­sided. And Spre­itzer’s re­search shows that em­ploy­ees who don’t trust man­age­ment to be open and hon­est are more likely to with­draw or rebel against the change. “Lead­ers want to pro­tect em­ploy­ees from con­cerns, but when peo­ple know that the com­pany is mak­ing less than it used to or that more com­peti­tors are mov­ing onto the turf, it builds trust,” Spre­itzer says. “Peo­ple feel like they’re psy­cho­log­i­cal own­ers of the com­pany, even when they’re not eq­uity own­ers, and that lays the ground­work for more ef­fi­cient re­orgs.” Long be­fore you an­nounce any changes, start open­ing up about the rea­sons that are push­ing you to­ward them.


You may know what it means to shift from a func­tional to a ma­trix struc­ture, but baf­fled em­ploy­ees won’t—and will need to learn how to han­dle their new roles. “Peo­ple al­ways feel some­what over­whelmed by the change process, but if they also feel over­whelmed by their skill de­fi­cien­cies, that re­ally ex­ac­er­bates it,” Spre­itzer says. This makes a re­org a good time to ramp up your train­ing and men­tor­ship ef­forts.


When McK­in­sey sur­veyed 1,800 ex­ecs who’d weath­ered a re­org, they said the big­gest dif­fi­culty they had faced was em­ployee re­sis­tance. So it’s no sur­prise that other re­search shows that the best change teams in­clude a skep­tic. “You don’t want a jerk, but you don’t want only peo­ple who are all rah-rah about the change to guide its di­rec­tion,” Spre­itzer says. “Di­ver­sity of opin­ion can make the vi­sion bet­ter, and with a re­sister al­ready on board, peo­ple who might be ten­ta­tive or con­cerned are more likely to say it has po­ten­tial.”


When you’re ready to un­veil the grand plan, re­sist the urge to do so at an all-hands meet­ing. CEOs usu­ally de­fault to this—or video­con­fer­ences for global teams—be­cause they want ev­ery­one to hear the news at once. But Spre­itzer’s stud­ies have found that peo­ple re­act best to the news when it’s shared with smaller groups. “Em­ploy­ees are more likely to have a trust­ing re­la­tion­ship with their unit leader, and they’ll feel more com­fort­able ask­ing ques­tions and pro­cess­ing the in­for­ma­tion as it’s shared,” she says. Coach team lead­ers to fo­cus on three lay­ers of in­for­ma­tion: Here’s where the com­pany is headed and why, here’s how that’s go­ing to work for this unit, and here’s how it’s go­ing to ben­e­fit you as an in­di­vid­ual. Go ahead and book an all-hands—just do it af­ter those tai­lored talks.


The smoothest re­orgs hap­pen when a CEO en­lists lead­ers from dif­fer­ent teams to dig into the nitty-gritty. “Those em­ploy­ees might have more time to de­vote to this and a bet­ter un­der­stand­ing of their de­part­ment’s con­cerns,” Spre­itzer says. “They’ll also feel hon­ored to be asked, and that buy-in will go a long way to­ward gen­er­at­ing broader buy-in.”


A re­org done wrong can turn even pro­duc­tive em­ploy­ees into dis­tracted, anx­ious messes. The quick­est way to cue nail bit­ing? Make the an­nounce­ment on a Fri­day af­ter­noon. “When em­ploy­ees don’t have a way to fol­low up,” says Spre­itzer, “they worry.” At one com­pany she stud­ied, man­agers were told to for­ward an email about a mas­sive re­org on a Fri­day. “The email didn’t pro­vide any de­tail about how af­fected em­ploy­ees would be helped with the tran­si­tion,” she says. But one man­ager didn’t send the email, and in­stead sched­uled meet­ings to ad­dress work­ers’ ques­tions and gen­er­ate ideas around the re­org. Within a few weeks, those staffers re­ported im­proved en­ergy, en­gage­ment, and col­lab­o­ra­tion lev­els.


Work­ers care about their col­leagues, so if lay­offs are part of the plan, make sure you take spe­cial care with those who are be­ing let go. “Sur­vivors pay at­ten­tion to how those peo­ple are be­ing treated,” says Spre­itzer. Plus, there’s a hint of the Ghost of Christ­mas Fu­ture in watch­ing some­one be­ing es­corted out the door, which may cause re­main­ing staffers to won­der if that will be them in six months. Com­pound that with anx­i­ety about new roles or struc­tures, and it’s no won­der re­search shows that sur­vivors tend to be more stressed than those who have been pushed out. “The more com­pas­sion­ate and the more gen­er­ous you can be to peo­ple who are let go, the less stressed the sur­vivors will be af­ter the dust set­tles,” Spre­itzer says.

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