In the world of enterprise, restructuring is the new norm. Organizations today are experiencing so many ebbs and flows, from accelerated growth and acquisitions to selling off parts of the company to create new, smaller companies.
A "restructure" can impact all levels of the business, for better or worse. Whether it's creating larger or smaller teams, moving to a new location or expanding locations, shifting or restructuring departments, and making changes to the leadership structure, how it's executed makes all the difference.
Here are some other issues organizations often run into during a restructure if they are not proactive:
- Deadlines are missed. When team dynamics and the routine cadence of the work day are interrupted by restructuring, tasks and projects are often derailed temporarily while teams are trying to adjust to the new structure. In fact, a McKinsey Global Survey revealed 38% of employees were distracted in their day-to-day activities in organizations undergoing a restructure.
- Initiatives are stalled. Much like deadlines, initiatives may stall while other aspects of the restructuring are taking place. Smooth transitions allow multiple objectives, including initiatives and the restructuring, to happen in unison. In messy transitions, initiatives are also likely to derail.
- Productivity declines. Restructuring can create a culture of fear when employees don't have all of the information. Rumors may float around who's losing their job next and water cooler conversations start happening when they don't have the information.
- Accountability suffers. Change management and communication is more important than ever at the organizational level, especially during times of big change. When ownership around tasks and roles is unclear, it creates confusion and resistance to the change
I was speaking with one of our clients recently whose company was taking a few separate teams and putting them together to form one larger, robust team. Their reason for doing this was powerful—they were beginning to understand the necessity of diverse perspectives, and uniting these smaller teams presented an opportunity for more direct collaboration. In fact, many companies are seeing the power of diverse perspectives and want to alleviate silos where and when they can.
However, even with such a positive intention, this transition was creating issues around authority and delegation, leading people to wonder, who owns what? Promotions were happening in the midst of all of this that led to more confusion and power games…certainly not a dynamic you want to see on a new team. These are often the results when there is a sudden change in who you work with and who you report to.
Changes that come from restructuring can create new opportunities for businesses including an increase in shareholder value, more cross-collaboration, more innovation, and expansion. However, it can be counterproductive and create quite literally the opposite result of the intention when there is no plan in place to make sure these shifts are managed skillfully. And unfortunately, effective communication and planning too often fall to the wayside.
Creating Smoother Transitions
The McKinsey Global Survey also revealed that 66% of "successful" company reorganizations had developed a clear communication plan for all internal and external stakeholders. Clear communication was also the top determiner of their success.
During times of restructuring, it's vital for the entire organization to be informed about what's taking place and for leaders to be prepared to have the conversations needed to navigate these transitions. Here's where to start:
- Be transparent. Mystery is not an advantage in the workplace. When the right conversations are happening, water cooler conversations become unnecessary. Leaders need to share what they're at liberty to share with their teams, and they need to be available to answer questions. Leaders also need to ask directly, "Do you have any concerns? Let's talk about it." This helps build trust and minimizes the anxiety that can arise during times of change.
- Involve teams in the execution. Sometimes decisions are made among C-Suite and executive leadership that is then mandated from the top down. The important thing to assure when this happens is that leaders are involving their teams in a conversation about how the change will be carried out and invite perspective. Even if they're not involved in the initial decision, they can take part in the execution.
- Make the why known. When teams don't understand the intention of a restructure, it can create stress and resistance. Communicating directly the why behind the change can create buy-in across an entire organization. It also allows individuals to connect to the purpose of the change and grants them the opportunity to truly align with the decision.
- Make accountability clear. If you're aware that ownership of tasks or roles is going to change (or stay the same), this needs to be made clear to everyone on the team, and everyone who will be impacted needs to be part of the conversation. Every individual needs to know where they are responsible—this will help build a stronger team, boost productivity, prevent silos, reduce tension, and create clarity, all of which are essential during transitions.
A successful restructure comes down to the quality of conversations that are taking place before, during, and after the transition. To bring everyone together, teams also need to feel supported and know their leaders have their best interest at heart.
Download our recent eBook here for more on the conversations you need to be having today.