(This is a business case study. It will be used to guide discussions during the session: “Reorganizing My Teams” at the Vendo Partner Conference in Barcelona on Tuesday, September 13th.)
When should I reorganize my teams?
Charles was staring into his coffee. It was 09:30 on a Thursday. He’d bought the coffee before stepping into the elevator that brought him up to his office and this conference room. By now the milk had settled to the bottom of the cup. The color had changed, it was getting darker and losing its heat.
In the background he heard people talking around him in Conference Room B. They sounded muffled, like murmurs. He didn’t have to listen closely. For years he’d been hearing the same conversation, from the same people, arguing from the same positions.
He stirred the coffee in his cup. As the color lightened he thought to himself, “Our business is stagnant. We’re not seeing significant progress towards results. More effort and activity isn’t moving us forward.” It was clear that there was a problem. And he knew it wasn’t going to get solved in this meeting.
Either he had the wrong people in the wrong positions – or – the wrong structure. Or maybe both?
Charles started the company with a group of friends when he was eighteen years old. Over the last twenty years he had helped to create one of the most respected companies in the industry. He lead the company through countless changes – often responding to major shifts in technology.
As a seasoned executive, he’d seen it all. Or almost all. This problem in front of him seemed unique, different. A new challenge.
It’s easy to confuse activity with progress, he thought to himself. After all, results follow action. You have to be patient to see results. But how do you know that people are working on the right thing? As Peter Drucker says, “an effective executive gets the right things done.” Was Charles being as effective as he could be? He wasn’t sure.
One of his first warning signs was that massive efforts, big investments of human energy and capital, weren’t producing the results that he and his partner’s demanded of the company. The ROI was disappointing. Everyone was very busy. But they weren’t moving the company closer to its goals.
Montreal is urban. It’s the opposite of rural. It’s modern history began as a trading post where natives and French settlers exchanged furs at a slow bend in the river. The people of Montreal have always lived off their their ability to trade and their openness to the outside world. It’s one of the reasons the city is the most important center for our industry today. Yet, when Charles looked around his Montreal office he saw one of the typical signs of a rural landscape: silos.
Silos hold grains and corn and other harvests from farms in tall, thin metal towers. They’re designed to keep things separate, dry. They are not connected to anything else. There’s one way in and one way out. They are singular.
He looked out at his departments through the glass wall of Conference Room B. The desks were fields. Their work product fed up into silos, one in each department, that climbed higher and higher. The different departments competed with each other to see who could build a taller silo with more resources and more work product. It became “us against them.” There were rivalries between departments and even within large departments.
It was a structure that didn’t support the vision of the company. In fact, it did the opposite, it encouraged competition within the company. The teams were not aligned to one vision.
Charles thought he would start there, with the vision. Together with his partners he hammered out a vision for the next three and five years that was very different from the one it replaced. And silos weren’t part of it.
During the process the partners kept in mind the Clemenceau quote, “Generals are always preparing to fight the last war, not the next one.” They didn’t want to be those kinds of generals.
As he developed the vision it became clear that the structure of the company would change. A different vision required a different way of organizing. It also required changes not just to positions and teams but changes in the people on those teams, too. If the next war will be different then so will be the army that Charles uses to fight it.
The following section contains field notes from the battle:
What could be achieved with a reorganization?
It forces you to look ahead and define a clear vision for years to come when shuffling the entire structure. You can’t just get away with short term thinking and avoid big strategic questions.
Allows you to consider and see new possibilities and opportunities that are simply unthinkable in the current setup.
Change now and decide on what those changes will be. The best time to change is when it’s not required. Once change is required you have to fight to have a future rather than deciding what will be that future.
Being a disruptor means starting by disrupting yourself, otherwise someone else will. Again, not being at the mercy of someone else to decide on our future is key.
What challenges will I encounter?
Communication issues of all kinds will happen. You need to be able to separate and address what are real communication issues vs. other issues that aren’t communication related. It’s easy to blame communication for everything that happens.
Even when the message is crystal clear, not everyone will understand the same thing. Everything will be up in the air. People will pick and choose what appears important to them going forward. What they focus on is not always what you said is important.
We gave a lot of room to people who were complaining about the current structure. But we didn’t listen enough to people who felt we had the right setup and were happy about it. We might have overshot by giving too much weight to those who were very vocal about the problems they were facing.
Some people will use and feed the confusion to resist change; some will say that the vision is not clear yet. We saw people say that because they didn’t agree with the vision. They kept challenging its clarity until it adapted to fit into their definition of what should be the vision.
Plans vs planning: Not everyone deals with change the same way. Some people are fine with a very high level of uncertainty and figure it out along the way. Others need precise answers to everything. It’s impossible to plan such a big move down to the detail and expect the plan to stick. Having a common agreed level of uncertainty becomes essential. Planning is indispensable; plans are useless.
Did we actually make changes?
The first question we were being asked by outsiders was: Did you actually make changes or did you just move things around? It seems that people were skeptical that we could actually make such a big change when it wasn’t required. I guess most people will look at change not as much with a resistance to the change, but rather a high level of skepticism when they can’t feel the urgency of change.
We already feel the “gravitational pull” of getting back to our old habits and slowly unrolling the changes that were made. Not so much changing back the structure, but rather keeping the new vision “on paper”, but spending more and more time on the old activities, the ones that didn’t provide much progress in the first place.
The higher positions could feel and see the change, as entire divisions moved. However, as you go down the chain and get closer to the people running the operations, changes are less obvious to people as their day-to-day activities do not change as much (for example, customer support people still do customer support). That makes escaping from the “gravitational pull” harder.
At what point are the changes done?
After the big changes, we need to quickly tweak and adapt. Letting people have time to settle in their new roles is important. But at some point, some of those people will not fit in the new structure. Those people need to be let go. This is hard. Some of those people have been with us for many years. But their past accomplishments won’t contribute to the new path we decided to take.
In summary, reorganizing is very difficult. It is full of challenges and uncertainty. Several months into the reorganization we felt like we could understand why those generals want to fight the last war. The only problem with that approach is that you’ll surely lose the next one.