If you have been anywhere near corporate life in the past ten years, you have probably been impacted by a reorganization or "reorg." This is where a company changes its organizational structure. From the employee perspective, reorgs are often interpreted to mean:
- More work
- Another stupid management decision intended to upset and frustrate me
As annoying as they can be, there are actually some good reasons why they happen. If you understand the difference between a good and a bad reorg, it will make you a better businessperson and ultimately a better entrepreneur.
Good reasons for a reorg:
- A shifting market: In a well-run company, the management knows that they live and die by their market. Everything that they do and say must be in synch with market realities. What do we know about any market today? They are constantly in flux and change all the time. So if your organization just sits still and doesn’t pay attention to the way the market has changed just to not bother their employees, chances are they won’t be in business for very long.
- A better way to serve customers: All of us have probably experienced intense frustration with the way we are treated by some companies that are supposed to serve us. Isn’t it enraging to have to call 5 people to get a resolution to a problem, encountering multiple "it isn’t my job" responses along the way? This would be the case of an excellent opportunity to restructure the customer service function to better meet the needs of customers.
- A changing business model. If you change the strategic direction of a company and don’t change the way the organization is structured, chances are you won’t drive the new behaviors required to be successful.
Bad reasons for a reorg:
- The high-paid consultant said to do it so we did it
- We will change our organization structure to save the butt of a top executive
- We have a history of performance problems and instead of addressing them the right way, we will reorganize people out of a job
There are many more good and bad reasons.
My point: Instead of immediately getting grumpy when you hear of organization changes, do some research and find out why your company is doing it.