Five Reasons Your Company Is Addicted to Reorganization and How to Survive the Next One

Some companies seem to be in a constant state of reorganization. It’s almost an addiction. If you want to survive reorganizations, you need to be a bridge not a box. More on this in a minute, but first, it helps to understand why companies reorganize so often?

1. Modern enterprises tend to describe themselves in terms of how they are organized – the company has become the org chart.  We even refer to places we work as “organizations,”  as if the enterprise is equivalent to the way it is organized.

Photo Credit: Walt Stoneburner via Compfight cc
Photo Credit: Walt Stoneburner via Compfight cc

2. We mistake reorganization for business strategy. Reorganization could be a result of a change in business strategy, but it is not a business strategy in itself. If most of the discussion in your company is about HOW you will be reorganized and people can’t remember WHY you needed to reorganize in the first place, you are headed for trouble. New CEOs are especially prone to reorganizing to put their stamp on the company, but that still doesn’t make it a business strategy.

3. Companies don’t test their hypotheses about what a reorganization will achieve. Suppose that you think that you can improve customer satisfaction if you organize staff around account executives aligned to your customer segments. This is a testable hypothesis. Try it and see, preferably on a limited basis first.

4. Most businesses have an inherent matrix. They need to be managed and aligned in multiple directions simultaneously. You may need to be organized by geography to leverage your locations, by specializations to enable staff development, by projects to bring together different disciplines, by customers to sell across your product lines. Instead of accepting and managing the inherent matrix, many companies constantly “roll their matrix,” flipping the horizontals and verticals and changing who reports to whom. They roll the matrix instead of actually managing it.

5. Companies reorganize from the inside out instead of the outside in because it helps them avoid the difficult work of listening to customers. Customers don’t care how you are organized unless it impacts them. Focus on your customers’ needs first.  Create a business model and business process that meets their needs.  If the model requires a different organization, then test a different way of organizing the work and the people who do it.

Many reorganizations are (a) designed from the inside out, (b) ignore the fact that the matrix must be managed no matter how often you flip it, (c) don’t test whether the reorganization will improve performance, and (d) substitute reorganization for actual strategic business choices.

Therefore, your best bet for survival is to focus on staying connected with as many parts of the organization as you can and making yourself valuable by serving as a bridge between them. No matter how the business is reorganized, someone needs to coordinate across functions, projects, and specialties. People who can do that well will be needed and are often in short supply.

Think of the organizational matrix as a grid of boxes created by lines. Most people will focus on the boxes. What box will I be in?  Who will be in charge of that box? Is that box bigger than other boxes? Instead, focus on the lines that create the boxes and become skilled in the tightrope act of walking the lines between the boxes – be a bridge between the boxes and you will not only survive most reorganizations, you will thrive.  If you build bridges beyond your own company, you might also get opportunities to thrive in new companies that aren’t addicted to reorganization.

Note: With thanks for inspiration from CGS and RPS.