How to Make Your Company’s Reorganization a Big Win


People-Based not Profit-Based Reorganizations

As somebody who has been through a huge merger, and the resulting reorganization, I can tell you that reorgs are the worst. They deservedly have a terrible reputation, because they are dehumanizing, demoralizing, and damaging to your company. So why do companies do them? They are necessary. Strategic shifts, changing economic environments, industry disrupting innovations can all force leadership teams to stir things up. The problem that every leadership team runs into is that reorgs are incredibly costly in terms of lost productivity and turnover.

The reason for the loss of productivity is that companies do not take a people-based approach to reorganizations, they are too focused on profits. It’s easy to get very focused on the end goals, but ironically the trick is to stay very focused on the impact on every individual. The secret to a successful reorg is walking a mile in the shoes of each one of your employees. If the reorg doesn’t add up from their perspective you will lose productivity if not the entire person in the process.

Here are the 4 angles that you need to consider from every single employees perspective:

Communication – More is more

By the time you are implementing a reorganization, as a leadership team you have probably talked about it till yours face turned blue. You are tired and eager to get things rolling. These feelings make it easy to short change the communication process that must take place with the broader teams. Our brains quite literally are trapped inside our own experiences making it easy to assume that employees have the same information that you have. But they don’t, and they need time to process.

The goal of your communication program should be to give as much information and rationale behind a reorganization as possible. If there are market pressures forcing the change explain these. If your biggest competitor is winning business from you, or you are experiencing customer churn, then connect the dots between this pain and the need for a reorganization. Treat your employees like the knowledgeable and thoughtful people that they are.

Communication with employees should emphasize that importance of company-wide goals and the need to succeed as a team. Aspiring to be something great will provide much-needed energy to get through the pains that accompany change. At the same time, don’t disregard the fact that reorganizations are always worse for some people than for others. Acknowledging that upfront and giving those individuals a choice about their future can mitigate the blow to employee morale.

Continuity – Would this make sense if it were happening to you?

Employees will accommodate change up until a certain point. Limit the reorganization to just the things that must change, and be sure to keep other processes on track. Things like performance reviews, promotions, bonus programs, networking and mentorship programs, leadership development, and education should continue as much as possible.

Imagine that yourself in your employee’s shoes, how would you process the reorganization? What would you be worried about? In most cases there are a handful of things that drive an employee’s engagement with their job, you want to make sure to keep anything that is working for that employee in place. If they are really engaged in leadership development programs, don’t take away that benefit. If they have a long-running mentorship relationship, don’t change it. If they are due for a promotion or a bonus, make sure that this is not overlooked in the review process. The goal of all this is to limit voluntary turnover which has high explicit and implicit costs.

Recognition – How can you make people feel good?

Beyond keeping certain programs in place, a reorganization is the most important time to turn up the volume of your recognition programs. Acknowledge the hard work of your employees, share progress across teams, and reward outstanding collaboration.

A reorganization can quickly become a chore, a time suck, and a distraction from productive work. The goal of a recognition program is to recruit employees into driving the success of the reorganization. Recognition is a powerful incentive for driving employee performance and productivity. Moreover, recognition programs can be implemented with little to no cost.

Feedback – Do you give people a voice?

Lastly, and perhaps most importantly, employees should have a voice during a reorganization. Leadership teams cannot afford to just go through the motions. Give employees a forum for voicing their concerns, ask that they prioritize their issues, and close the loop by making changes where possible.

Be clear with employees about what is negotiable and non-negotiable, it is better to be upfront about the things that are not in their power to change. On the things that are negotiable, do your best to meet employee’s needs, because it will go a long way towards building your leadership credibility and trust.

The rewards of managing a reorganization from a people-based perspective are numerous, and ironically by focusing on people you will directly and positively influence profits.

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