I have witnessed hundred of reorganizations which have resulted in either no change, or a change for the worse.
The goal of this post are to point out why reorganizations fail.
At face value, reorganizations are implemented to improve the organizational ability to adapt to changing circumstance.
Another unspoken but very real reason for a reorganization is that senior management needs to buy time, and what buys time better than a reorganization, which can often result in a year of grace from pressure from above.
Yet another reason for a reorganization is that it is “doing”, which serves as a message that the status quo is untenable. And management often believes that doing “something” now is better than taking time and figuring out what needs to be done.
Change management and industrial engineers have promulgated a myth that reorganizations are more manageable than they really are, so managers feel more certain that reorganizations can be well controlled, and thus use the reorganization medication frequently.
There are many reasons why reorganizations fail. Here are the top three which come to mind.
- Most people have been through many reorganizations, and have learned the defence mechanisms necessary to protect themselves. So structure changes but individual behaviour becomes more self protective, resulting in a reduction in efficiency and effectiveness.
- Paralyzing processes, poor products, unskilled/demotivated engineers and a shitty cultures (pardon me) are not cured by a reorganization.
- In order to support structural reorganization , massive investment goes into promulgating instant stability!. Massive investment is made in definitions, new processes and re-freezing. Yet far too often, these massive efforts does not impact what makes a reorganization fail: politics, poor leadership, incompetence and poor teamwork.
The type of OD work which is necessary to support reorganization is not serving as the CEO’s Vaseline with pre-packaged OD products, as it were, which purport to manage the change” .
In a reorganization mode, OD needs to focus on ensuring that something else changes, not only the structure. Most time, reorganizations are merely turf grabs, as Terry Seamon notes below in his comments.
But only the best CEO’s want to expose themselves to this type of hardball OD in the first year of a reorganization.
Most CEO’s prefer to use the year of grace, freed from the prattle of an OD consultant whose input creates “noise” by focusing on abstracts like politics and trust.