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March 23, 2017

Take the Sting Out of Reorganization

Rachel Salaman

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Take the Sting Out of ReorganizationThe whispers have started. Daniel, who plays squash with Lorraine, the director of marketing's executive assistant, told Asha that the company's about to undergo a reorganization. It could result in it being downsized and streamlined. Four divisions will become three. Or was it two? Anyway, there'll be job losses across the board, maybe as early as summer.

Before you know it, all of your team members have begun speculating and worrying. They keep asking you questions that you can't answer because, honestly, you know as little as they do. And this sense of uncertainty is likely to go on for months, no doubt severely affecting morale and productivity.

The prospect of a reorganization strikes fear into the heart of most employees, whatever their level of seniority. That's why good communication about future plans and how they might progress is essential.

Former McKinsey consultants Stephen Heidari-Robinson and Suzanne Heywood have pooled their extensive experience of company reorganizations into a new book called, "REORG: How to Get It Right."

When I spoke to Heidari-Robinson for our Expert Interview podcast, we spoke about how and when to get key messages across if you are considering a reorganization. "One thing that we always see – we've never not seen it – is that most companies think they can keep this thing secret and they never can," he says.

"If people see a team sat outside a CEO's office, or a middle manager pulled out of the line to work on this, someone will talk about it. And if you don't manage the way it's discussed, pretty soon around the water coolers of the company, people are talking about the reorg. They're guessing how many people are going to lose their jobs."

Rather than try to keep it secret, leaders should get in front of the issue, before it balloons and distorts.

"As soon as you know that you're going to do a reorg, you should announce that this is something that you're looking at. [Say] there's a team that's looking into it in a few months or in a few weeks, depending on how big it is, and they'll report back whether or not this is something going forward," he suggests.

After all, if you’re not open with employees from the beginning then, "...you're not managing the conversation; you're just reacting to people's opinions."

Once the news is out there, it's easy for leaders to take the wrong approach to communication. Heidari-Robinson explains, "Too often... people sit down and think, 'We’re going to reorganize the company. What do we need employees to know?' And so the communication is all about broadcasting. If you approach communications from the opposite point of view – 'What might my employees really need to hear right now?' – you start to understand why you need to communicate with them."

And what you need to communicate too. One of the key messages must be the rationale behind the reorganization.

"It can't just be a leader's whim," Heidari-Robinson says. "Be clear on why you're doing it and keep telling people, so they believe you. If it is to enable revenue growth, then say that lots of times, because otherwise people will assume it's about losing jobs. If some jobs are going to be at risk, be honest about that. If you don't know how many are going to be at risk, just say, 'It could be in this area. You will know by a certain date in time'."

He cautions leaders against conveying too much excitement too early in the process. They may well feel genuine enthusiasm for the changes about to take place. However, there's a time and a place for that to come across, and right at the start isn't it.

"Folk don't like change, but they like uncertainty even less," he asserts. "So at the beginning, you're being clear on what's going to happen and when, and it's only when people know what their role is going to be in the organization [that] you can start to engage people and really get them excited about what the new organization's going to do.

“If you try and do that too early, it just leads to cynicism: people are thinking, 'Well, why is this senior leader excited, while, for me, I'm worried about what this means for my livelihood and what it means for my family.' You will come across as either disconnected or unfeeling."

It also helps to emphasize that employees will have plenty of opportunities to make their voices heard. And once you've made that promise, you need to put in place easy ways for them to share their thoughts as the reorganization progresses.

In this audio clip, from our Expert Interview podcast, Heidari-Robinson outlines how to gather employee feedback and when it works best.

 Listen to the full Expert Interview in the Mind Tools Club ¦ Install Flash Player.

Have you ever been involved in a reorganization yourself? How did your company communicate the key messages? Join the discussion below!

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