Dev Mookherjee
30 May, 2017

So…you think you need to re-structure? Really?

Organisation design

Re-structuring – the organisation defibrillator

We are often asked whether we could support a company re-design. The conversation usually starts something like this…”We have decided to re-structure our organisation and would like some help on how to do this well – can you help us”? We then respond… “What is the question you are trying to answer, and what makes you think re-structuring is the right answer to your question”?

At this point some clients are bemused (or irritated) that we seem to challenge what they see as an obvious need. Others seem relieved and intrigued by the possibility of having a range of choices available to them.

Restructuring: the design option of last resort

Our view is that re-structuring should be seen as the option of last resort – the one you turn to when others won’t solve your problem.

Why do we say this? Well, large scale re-structuring is often disruptive to the people in the business, takes time (research suggests most take over a year to bed in) and can have a negative impact on clients during the transition. A client described the experience of re-structuring as “fixing a running car”.

We are not though saying that re-structures are never appropriate, indeed we make a living out of supporting them, just that they should not be initiated without understanding of their impact and the other organisation design choices available.

Client experience of an alternative design option

A recent client has had a chronic issue around the fact that accountability for decisions was so opaque and freedom for managers so great that this resulted in duplication of activities and confusion for clients as they received different offers from different departments in the same organisation. Rather than restructuring, the initial preferred option, they were able to make significant improvements by clarifying decision rights on critical decisions. In the process they got under the skin of their culture to understand and address their aversion to consistency and clarity.

When are re-structures helpful?

There are however a number of circumstances where re-structures (not structural tweaks) seem to be helpful and appropriate…

1. when you have tried addressing the other design policy areas on Jay Galbraith’s Star Model (people, process, rewards) and the results have come up short;

2. when the scale of the challenge is big and urgent and perhaps mandated due to an acquisition or divestment;

3. when you have clear evidence that structure is the critical barrier to delivering your strategy;

4. if you believe the organisation needs the equivalent of an electrical jolt to the heart to re-pattern its activity.

If you are still clear that re-structuring in the right answer given the above then hang on to the moving vehicle or grab the defibrillator and stand clear…

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