Now What? Taming the Chaos of an Organizational Restructure
Now that you’ve rolled out the new organizational structure, you can breathe a sigh of relief, right? After all, the new job descriptions have been written. People have been assigned to their new jobs. Done and done. Now for a much needed rest.
Well hold on a minute. You’re only half way to the goal line, particularly if you restructured into a matrix organization. There is a lot more work to do to operationalize that matrix, especially if this is the first time the people involved will be expected to work as a matrix.
There are many reasons for people to be confused after a restructure:
- They don’t understand their new roles.
- They don’t know how to work across functional or business unit boundaries.
- They don’t know how to lead if they don’t have authority.
- They don’t know which boss to listen to.
- They are scared by all the changes they need to make.
- They don’t know what a true collaborative process is and haven’t been trained to be truly collaborative.
What’s an Organizational Development professional to do? Bring in some leadership training workshops? Train team members on how to work together in a team? Are these the right solutions? Do you start with them or is there something else that’s needed?
Cathy Cassidy, Master Consultant with Matrix Management Institute, has the following four tips.
Tip #1: Understand that Restructuring is not a Solution
It’s a hard truth, but leaders need to understand that restructuring isn’t going to solve the problem. (And what was the problem that restructuring was supposed to solve in the first place?)
Usually it’s a question of alignment around customers or efficiencies of scale. Alignment usually leads to decentralizing functions so that individuals and functions are closer to the customer.
Efficiencies of scale leads to centralizing functions. Decentralize and then centralize and then decentralize--that’s often the road most traveled in a restructure.
However, all of that box moving on the org chart doesn’t solve the problem; otherwise, organizations wouldn’t be doing it all over again two or three years later.
What is the real problem?
The processes still haven't been integrated cross-functionally (efficiencies of scale) and groups aren’t closely integrated with their customers (alignment).
Are you ready to try something else? Go directly to tip #2, and don't pass GO.
Tip #2: Operationalize Your Structure
Every organizational structure has strengths and weaknesses. I'm sure you get that—after all, there is no perfect structure. So whatever structure you just created is probably good enough.
The real trick is to operationalize that structure to integrate those cross-functional processes and partner up your internal customers and suppliers.
Not operationalizing the structure means you haven’t done the work of integration and optimization. Maybe you should just start planning your next restructure in a couple of years.
To avoid this vicious cycle, consider that you have two dimensions to work with in your structure, not just one.
Most organizations focus on the vertical dimension, which is the "moving the boxes around on the org chart" activity we all know and love (hate).
That’s what you need to integrate.
That’s where alignment and efficiencies can be achieved.
Tip #3. Change your Accountability System
You probably approach accountability like most organizations – accountability is tied to individual goals. The Director of Sales is accountable for sales goals. The Director of Manufacturing is accountable for manufacturing goals. They have direct reports that help them achieve these goals. This system worked okay in the 1950s but is completely out-of-date for organizations today.
Because it segments the organization instead of integrating it. It sub-optimizes and therefore, produces inefficiencies.
Accountability should be used for integration and alignment. It should pull people together and not push them apart. It needs to ensure that everyone is focused on what’s best for the external customer and the organization at large. That means introducing matrix accountability.
And just changing the accountability system isn’t enough, people also need new skills.
Tip #4. Train People in Cross-functional Skills
If you want people to cooperate, to work together across functions, which is what you need if you want to integrate one function with the next one in the value chain (horizontal dimension) then you’re going to need to train them to work without depending on authority.
Cassidy says, “If you want people to really cooperate and to do so efficiently, they need new collaborative tools and partnering skills. They need to be able to work effectively in teams and for leaders, to lead those teams so they perform optimally. I don’t think leaders realize how big a change it is to move from a vertically-dominated organization to a horizontally-integrated one. Training is definitely a key component, but not the whole ball of wax.”
These four tips should get you started in taming the chaos after a restructure. The more you focus on the issue of integration, the less likely you’ll be faced with another restructure any time soon.
Hopefully, that’s a big relief.
Masha Nehme is the Content Strategist with the International Matrix Management Institute. She is the editor of the Matrix Management Institute newsletter and blog, and she works with the Institute team to develop its content and marketing strategy.