Organizational Restructuring Myths

March 03, 2020

Contributor: Manasi Sakpal

Learn how to debunk these five restructuring myths.

More and more organizations undertake significant restructuring initiatives to keep pace with digital transformation demands. Yet few achieve the desired result. 

“Too many of us start with a restructure to fix problems, when actually it should be one of the last things to do as part of a plan to fix the problem,” says Janelle Hill, Distinguished VP Analyst, Gartner. 

The impact of organizational restructuring, good or bad, will not be immediately apparent. True ROI takes time

Restructuring disrupts the entire organization. Workflows slow as employees adjust to shifts in reporting, management and goals. Changes disrupt communication and delay decision making. Despite these risks, business leaders often opt for organizational restructuring over more effective methods. 

Leaders who plan on restructuring, avoid these five common myths. 

Myth No. 1: It worked elsewhere so it can work here

CIOs often think replicating an organizational structure used successfully by themselves, by peers or by industry leaders will accelerate realization of their goals. The reality is that these” copy and paste” options don’t work. An organization chart is the outcome of a process to diagnose the root cause of a problem or tension. The process itself cannot be circumvented. 

Diagnose the root cause of problems that are affecting their business and design a plan to address each associated element. An effective reorganization should be the last step of that process.

Myth No. 2: Restructuring will improve team ...

IT leaders restructure to improve some organizational ability, such as productivity, agility, efficiency, innovation or collaboration. However, because reorganizing is so disruptive, it makes things worse before they get better.

Effective restructuring requires CIOs to clearly communicate the desired change that the restructure targets and encourage teams to trust the changes and move ahead smoothly. 

Explicitly articulate desired behaviors and exhibit them. For example, to increase approachability, establish a routine such as “Breakfast with the CIO,” where your employees can casually drop into your office to engage with you (and potentially others) over coffee to discuss any topic of interest to them.

Myth No. 3: Restructuring will enhance employee performance

It is common practice for leaders to move employees and even managers from one role to another in hopes of improving their personal performance. These attempts acknowledge that poor performance is at times a cry for help. 

Leaders aim to be responsive and exhaust all options before starting the performance management process. However, different roles often require different skills and experience than those of the poor performer. Even transferring an individual into a different position starts the performance management process and holds the employee accountable. At some point, it will be clear that the individual just isn’t the right fit and should be let go.

After transferring or removing a poor performer, take time to focus on the rest of the team — show them the value that everyone brings to the table. And, ensure the team is emotionally healthy. The old adage, “One bad apple spoils the bunch” applies to teams as well. Be on the lookout for any lingering negativity.

Myth No. 4: Restructuring will deliver immediate positive results

The impact of organizational restructuring, good or bad, will not be immediately apparent. True ROI takes time.

Structural changes are not an elixir for all problems or tensions that detract from high-performance outcomes. High-performing teams depend on strong relationships both within and beyond the team. Placing individuals under the same manager and within a shared reporting hierarchy does not establish trust among peers — and often fosters competition. 

No team can achieve high-level results without creating a clear plan (forming), reconciling different expectations (storming), figuring out how to work together (norming) and achieving results in a way that relies on each other’s strengths (performing). Restructured teams must undergo this slow but necessary process. It builds the relationships and trust needed for long-term success.  

Myth No. 5: Restructuring demonstrates a commitment to change to peers and clients

Reorganizing is a visible change that is often easy, low cost and requires no additional approval for the initiator. It seems like a quick fix that demonstrates the leader’s commitment to making important changes that benefit the organization. 

But, a new organizational structure does not show business peers, partners and customers/constituents that you are serious about their business outcomes and needs. 

“It is not the process, it’s the outcome that really matters to your business partners,” says Hill. 

Establish a foundation of trust with business peers by doing the basics of IT right. That is, ensure minimal to no unplanned outages, consistently deliver projects on time, on budget and in scope — and provide transparency into IT’s financials. 

Once the basics have been proven, focus on overall enterprise performance outcomes. Maintain agility and communicate the results regularly to business partners. This will ensure that they are confident in the decisions you make to keep up with market dynamics. 

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