You've come to terms with the fact that your existing organization structure is not the right one for the future.

You've decided to make some changes. So you take out a copy of your org chart and start thinking about moving people around, choosing your strong performers and worrying about others. You need to think about scaling but are not certain that everyone on your team can scale. You can't quite figure out how to have the conversation with them, because they each probably think that they can scale. They would not want to report to someone new or get pushed down a level. They will react badly if they don't continue to report to you. Then you start to worry that there may be other people on your team who no longer have a role at all in the new structure. You might need to hire for one or two new positions, but you're not sure you'll be able to get the approval for a new hire. This is so stressful!

What Is the Business Motivation for Organizational Change?

Take a deep breath. Organization change is never easy. It makes everyone nervous, including the leader who is making the change!

Often, leaders make the mistake of thinking about organization changes in terms of moving the existing people around. A better approach, when you are at these crossroads and you need to make a change, is to first focus on the business outcome, and then decide what the ideal organization would be to achieve that business outcome. It's easy to get paralyzed when you start your thinking about the people who are already there and what they will think. So don't start there. Start with a blank sheet.

Remember, an org chart is never about the people.

It's about what needs to get done.

The job of a manager at any level is not to form a new organization by simply moving around the people you already have. Your job as a leader is to develop, and if necessary, change the people to build a highly capable team that can do what the business needs in the future.

In my career there was one instance in particular when I needed to do a major reorganization, and I was really scared that I was going to lose everyone in the process. But at the same time I realized that not doing the re-org was not an option either.

One of the reasons this was scary was that most external observers thought the business was doing great. But I quickly realized it was resting on its past successes, and in fact, while it was indeed growing and profitable, it was growing slower than the market. And there were plenty of competitors with fresher products who were moving faster. This was not a good trajectory. Conclusion #1: From an external pressure perspective, we needed a transformation.

Then when I looked inside the business, the picture got even worse. The business unit had been set up to be about eight separate business units going to market in parallel. We had duplicate and conflicting efforts everywhere. And we did not have a single person focused on important things that needed to happen in between and across all these business units to build a clear and differentiated offer for the changing market. These gaps became very clear when I started having executive staff meetings, and each time I put the biggest problems on the table for discussion—failing partner channel, unsupported sales force, lack of consistent marketing message, lack of product integration—everybody just looked at each other. No one officially owned solving any of these business-wide problems.

Hmmm…nobody at the table owned fixing any of the biggest issues. Note to self: wrong organization structure!

Also, within the first couple of months, we had two big customer and partner events, one in Europe and one in the United States. At these events pretty much everyone yelled at me. Channel partners would get me in a corner at the cocktail party and tell me, “We don't know what to sell, we have one of your business units telling us to sell one thing, and then another business unit telling us to sell something totally different instead. Your products are competing with one another. I don't understand your product line. You seem to have three different products for one thing and five ways to do another.” I remember at one particular event, someone on my staff actually snuck me out the back way after about four hours of this at a dinner (where I got no dinner), so that I could get out alive.

The next week at the U.S. event, I heard two salespeople talking and one of them said (one of the worst possible things you can hear one of your sales reps say), “I've got customers with budget to spend right now, but I don't know what I'm supposed to sell them.” [Heavy sigh] Conclusion #2: From an internal perspective, we needed a transformation.

The Ideal, Blank-Sheet Org Chart

So I started with a blank sheet of paper, and first focused on the business outcome: I needed a single market leading product strategy; a single, super-compelling marketing message that was not confusing; and a consistent go to market approach for the sales force and the channel partners.

Using the blank-sheet approach, I decided that I was going to reorganize the business into a single business unit, with a leader for each functional area. That organization structure was not perfect either (no structure is ever perfect), but it solved more problems than it caused, and it solved the burning problems I had at the time. It matched the business outcome of having a single, integrated strategy by eliminating individual business units that were competing against each other, and by forming one team that could present the unified strategy to the partners and customers. It solved the problem of getting owners for all the biggest issues we were facing, which in the current structure had no owners. It was an organization structure that was designed to deliver what the business needed.

Here is the process I use for developing an ideal, blank-sheet org chart:

1. Start with the desired outcome for the business.

   Start by thinking about what needs to get done. Get really clear about what business outcomes you need to deliver. Really understand and articulate the specific work, strategic problem solving, concrete outcomes, and control points that your team needs to drive. Put them on a timeline to make it tangible through the Middle.

2. Next, draw your ideal blank-sheet org chart.

   Start with a blank sheet of paper. Really start fresh. Don't even look at your current org chart. Don't just rework the current roles or try to place the people you already have on the team in new boxes. Just think about what the business really needs and what outcomes you are on the hook for. Then draw a picture of what the ideal team to deliver that would be. Think through what the specific roles (roles, not people) on your new team would need to be to drive the key business outcomes—not just now but in the future. It can be a very liberating and inspiring experience to start with a blank sheet of paper and draw a picture of your ideal team with no names at all in the boxes.

3. Now, clearly define each specific new role. Really work to articulate the new stuff that is different. This is the key.

   It's very important to define every role as a new role. Even if the function is the same in the old and new world, for example: Product Management. You need to make it really clear that it is not the same job as it used to be. You need to define what is new and different about the product management role in the new world. Add things like the ability to drive innovation, or to influence adversaries, implement new technologies, be highly credible at executive level communications, or to personally transform business, partner, or sales models.

   Once you define the new org and the new roles, you have just created a clear and actionable picture of your goal.

4. Get input.

   You most likely have one or two trusted people on your staff who you are confident will fit into the new structure. Share your blank-sheet structure with them. Get their reactions and inputs. I have almost always tuned my ideal blank-sheet thinking after discussing it with some of my trusted team members. The added benefit here is that if you bring some team members into the design of the new organization, they will be much more ready to support the new structure moving forward.

   Also, at this point I think it is very important to talk to people at all levels of the organization. You don't need to reveal your whole organization design, but if you have a lot of conversations to get people's opinions at all levels about what is working and not working, you will get a lot smarter and you will build trust. By having these conversations more broadly, by the time you roll out your new organization, people at all levels will be saying, “That makes sense,” and they will see their fingerprints on it. You'll learn more about the value of engaging the broader audience early on in Part 4 (E = Everyone).

It's Not Personal

Here is the best way I have found to deal with this difficult situation.

You never have to “take someone out of their job.” Instead, you eliminate the old role and paint a clear picture of the new role necessary to drive the new business outcome. This is why it is so important that you describe every role in your new organization as a new role.

Then the conversation is not, “I don't think you are capable of doing this job anymore,” which feels like a personal attack or failure. Instead, the conversation becomes, “The job that you were doing does not exist any more. There is a new role in the new organization in this area that supports the new business strategy in the following ways…”

Then you need to explain how the new role is bigger and/or different. The easiest way to do this is to use the simple structure in Figure 9.1. The more clearly you can articulate the difference about what is expected in the new role, the easier the conversation gets. You can talk about new scope, new responsibilities, different outcomes, or the need to influence more broadly. Often the person will see the gap before you have to explain it.

If they don't see the difference or the gap, and they believe they can do the new role, let them know that they are welcome to interview. If they don't make the cut, then you can move them sideways, down, or out. But you are not simply removing them from their role. You have eliminated a role that is no longer necessary, you have defined a new role that is necessary (which subsumes the old role and has a bunch of new stuff too), and you have given them an opportunity to interview.

Some of My Own Lessons About Reorganizations

The reorganization I described earlier was quite dramatic. I indeed had some empty boxes and some extra people. I had to convince some people to take jobs that were far different than their expectations.

For example, I had seven general managers who rather liked being general managers. So I had to convince some of the key GMs to stay on in non-GM roles leading functions. The good news was that more often than not, the functional role running the whole integrated function across all the prior business units was bigger than their former GM role—but giving up a GM role can seem like a loss.

There were many reasons why this ultimately worked and did not blow up in my face. I handled each individual situation thoughtfully and with huge respect for the individual whose job was changing. I put a lot of personal effort into re-recruiting them and letting them know that they had an opportunity to be amazing in their new role.

But the success factor that underpinned all of this was that the resulting organization structure made sense. It matched the mission. Everyone could understand it.

Creating an organization that truly made sense went a long way towards calming everyone who was weary from too many re-orgs in the past. People got it. Because I started with the ideal blank sheet, instead of starting by trying to figure out how to rearrange the people who were already there, I was able to create an org structure that was truly fit for purpose.

As a leader, building the right team often requires you to eliminate some people's jobs. If you have people who are not the right fit or are not capable of doing the job that needs to be done, as a leader you need to deal with that and make a change. But I have found that every time I have needed to make such a change, the impacted person has ended up better off.

Being in the wrong role is awful. When people are struggling in the wrong roles and not doing well enough, taking them out of their roles is actually good for them. It's a relief. It gives them a new opportunity to move to a different position where they can thrive and excel. After getting over the initial shock and disappointment, they are often relieved and much happier—more like they have dodged a bullet than suffered a career setback.

The other way to look at it is that if you fail to build a team that can deliver the necessary business outcomes, you may be putting everyone at risk. By preserving the wrong team out of discomfort or guilt, you may be putting several people, including yourself, out of work later. The tougher the business challenges, the stronger the team you need, and the strategy of protecting people out of loyalty instead of performance becomes more risky.

If you have to eliminate jobs to build a stronger team, it doesn't prevent you from being kind. You can help the people you need to move out get into their next job. You are still in a position to help and provide referrals. But there is no substitute for the right team. If you don't have the right team, you need to build it.

Don't Forget About Redefining Your Own Box! Prepare Yourself

I also recommend going through the same process to redefine your own role. Draw the new box above your box, and realize that your new job is a combination of your current job and a box of new stuff that you are not doing yet (Figure 9.2). You need to figure out what that new stuff is and prepare yourself to step up too.

What new things does the business require that mean that you need to change the way that you work? Just like for all the other boxes, don't start with your name in it. Really think about what the business needs that person to do. You always need to be defining new requirements, not only for your team but also for yourself, depending on how the business is changing and evolving. If you don't know what that is, get help. Get input from others. Ask your mentors. Ask people in other companies who have similar roles. Always be challenging yourself to step up, and if you don't know exactly how, get help.

Do an Honest Assessment

You need to be brutally honest about what your desired outcome is, and what the right organization structure is to deliver it. Don't sign up for a transformation if you are unwilling to change your team or challenge yourself to grow. It's rare that you can accomplish totally new things with the exact same team that got you to where you are today. If you are unwilling to change your team, then pick a strategy that you can accomplish with the team you have. Going forth with a new, ambitious strategy, which does not match your team, will not end in success—and it will be really painful along the way for everyone.