After a reorg, nothing changes

I have witnessed hundreds 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.

  1. 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.
  2. Paralyzing processes, poor products, unskilled/demotivated engineers and a shitty cultures (pardon me)  are not cured by a reorganization.
  3. 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.

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19 thoughts on “After a reorg, nothing changes

  1. Reorganizations are seldom about real change. Often it’s just a polite word for some in-house turf grabbing. Calling it a reorg is like “putting lipstick on a pig.” No matter how you try to paint it, it still stinks.

  2. Maybe a case of Theory E, where economics survives and tramples all else. Would institutional ecology be so strong as to affect the CEO as a species? What can we do to identify where OD was not required, because of the desired behaviors in effective CEOs?

  3. Your points are well taken, Allon. That said, I think many reorganizations aren’t about performance. They are instead about reconfiguring the power base and power dynamics of the C suite. Reorganizations do shift control over resources and that is a significant form of power in organizations.

    • Hi Fred
      Thanks for your comment.
      Lets say that we take product marketing out of R&D and out of marketing and create an independent function in a globally dispersed company of 5000 people. Before the power shifts, which it will, we will have a 2 year bloodbath.
      So we need to ask, when is the structural change an absolute necessary, and not a cover your ass bs survival tactic.
      Glo send her regards.

      • Well, maybe the bloodbath is part of the tactics?
        I tend to agree with Fred, that reorg is very often about power. Actually, org structures are the formal power map. Bhinde which you have informal power structures and relations. To improve performance, start with the leadership culture and the informal power relations, then study the process and procedures. Structure should come at the end (when it is about performance only)

  4. Mr. Koren.

    You say when will it change?

    I have learned how to make change stick.

    All I need is commitment from the CEO. And I take them through my process and I will guarantee change or I will give 77% of my compensation to Allon Shevat!!

  5. More reasons why re-orgs don’t work as a one-off interventions:
    – Holding resistance as fear of change rather than fear of loss.
    – Fusing agreement to change with commitment to change.
    – Not addressing “true believers”, “forced believers” and “nonbelievers” as such.
    – Confusing “fear” and “aspirations” as forces of change.
    – Not distinguishing “structure” and “architecture”.

  6. Great post, Allon! Having just gone through a disastrous reorganization, I can confirm the accuracy of your comments.

  7. While the thoughts expressed in this article all have some validity, the lack of balance suggests that the author sees no value in reorganization. during my 40 year career, I have been brought in 3 times into organizations which were stagnating and which needed something to be done to inject need life into them. In two instances (both with over 200 employees), the delibertate and creative use of a real reorganization reuktyed in renewed vigor and transformation of the organizations wchich continue to thrive as a result, in part, of these reorganizations. In the third instance, the organisation suffered from “…agreement to change vs commitment to change…” and could not be helped.

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