4
Step 2
Understand Current Weaknesses and Strengths
Again, we'll start this chapter with a quiz. Please answer the questions on your current reorg, or a past one, before moving ahead to design a new one.
To what degree did you evaluate the strengths and weaknesses of the previous reorganization?
0: We did not do this. The previous reorg did not give us what we wanted, so it was clear we needed a new reorg.
1: We conducted some high-level benchmarking to compare the previous reorg with other options (e.g., pros and cons).
2: We investigated the weaknesses of the previous reorg to help us know what to fix.
3: We investigated the weaknesses and strengths of the previous reorg in detail. We therefore knew what not to break.
Whose views did you consider for this evaluation?
0: No one's; we did not consult others' views.
1: Leaders of the company or business unit or function.
2: A cross-section of staff, namely, 10 to 20 people drawn from leaders, experts, and frontline workers.
3: A sizable sample of people (100 to 200 people) drawn from different levels and regions (perhaps even including some customers or other external stakeholders).
How did you conduct this evaluation?
0: We did not do the evaluation.
1: Interviews only.
2: Interviews and surveys.
3: Interviews, surveys, workshops, and analysis (e.g., activity analysis, analysis of financial or operational metrics, comparisons of good and bad performers).
Again, sum up your score. You should feel pleased with a score of 7 to 9 and concerned with a score below 5. What does the result say about the degree to which you know (or knew) the patient you are (were) about to operate on? Would you be happy if your personal surgeon had conducted this level of due diligence before reaching for the anesthetic and the knife?
Now, let's see how your experience compares with Amelia's.
Amelia has the clarity she needs on the reorganization's objectives. What's next? Well, she knows that what the CEO, John, really wants is the design of the top three layers of the new organization (its “operating model”). Once this has been done, she and her team can complete their mission, hand everything over to HR, and move on. But Amelia feels intuitively that it is first important to understand the way the organization is organized today so that she can specify what will change. She therefore asks the experts in each business to send her the existing org structure charts and any other relevant information, such as how their market unit allocates capital or makes trading decisions. She creates a shared drive for the full team so that everyone can have access. This will be helpful when the detailed design starts later.
Amelia realizes that it is important to understand which bits of the organization are particularly challenged today. She creates an interview guide for each market unit and corporate function to ensure that she identifies all the most relevant issues—whether they relate to strategy, capital projects, trading, commercial activities, customer relations, operations and maintenance, or back-office support. She then interviews each member of the executive team to understand which issues need particular attention. Country heads complain of an overbearing corporate center where the functions try to impose too many decisions, whereas functional leaders complain of significant variability in the way each country unit works and, ultimately, performs. On some issues, however, the leaders agree: there is excess cost in the business (although each leader points to another part of the organization as the biggest problem); the process for capital projects is unclear; and capabilities in the trading organization are severely lacking. The US business, in particular, believes that it has already addressed many of these issues (especially reducing head count) and that the main problem is Europe's failure to keep up.
Amelia synthesizes her findings in a short presentation and shares it with John, the CEO. He is very impressed by her work, reassured that many of the worries that he himself feels are shared by his team, and glad that other issues he has missed have been highlighted by her interviews.
How would you rate Amelia's achievement for this step? From our perspective, she has done as well as could possibly be expected for someone who has not run a reorganization before. In fact—as we will see below—many reorganizations skip this step entirely. Nonetheless, she has again fallen into three dangerous pitfalls.
Pitfall 1: Focusing Only on Weaknesses
In a reorg, it's very tempting to have the mind-set of wanting to fix the organization. In this frame of mind, it is natural for us to focus only on the negatives. But pause for a moment. How much of the organization is actually broken? Remember the aphorism “your organization is perfectly designed to deliver the business results you have today.” Are these results completely unsatisfactory, or only in some areas? The results of step 1 will give you the answer to this question. If all your business results are appalling, perhaps you should only focus on the weaknesses and assume that everything will need to change. If, as is far more likely, some results are good, some bad, and some just OK, then you should also ensure that you spot the strengths, highlight them in your communication to the organization, and make sure you do nothing that upsets them. In most reorgs that we have seen, only 20 to 30 percent of the organization actually changes. The trick is to identify the right 20 to 30 percent. Beware of starting at the top and trying to change everything, only to see the effort peter out before reaching the layer responsible for the real business outputs.
Consider a medical analogy: A surgeon is planning an operation on a cancer patient. She starts with a diagnostic, where she attempts to delineate the diseased tissue from the healthy. Now, she may remove a small amount of healthy tissue as a margin, to make sure she gets all the bad. But she will do all that she can to avoid unnecessarily cutting into healthy tissue, lest she cause unnecessary damage to the patient.
Executives running reorganizations are seldom so careful. Even in cases where strengths are clear, companies can find that one of these strengths disappears when their new organization is launched. For example, one energy client found that when it changed its organization to drive standardization and efficiency, its previous strength of strong P&L ownership disappeared. Top-down reorganizations run this risk more than surgical, bottom-up ones (more on these two approaches in the next chapter). It is therefore as important to spend as much time in this diagnostic phase identifying the organization's current strengths and working out how to preserve them as it is to delineate its weaknesses.
You also need to use this diagnostic to understand the capabilities of your leadership and staff. Their capabilities—in particular their ability to handle change—will shape how much your organization can change. In fact, during this step, some executives running reorgs decide that they will need to hire one or more new leaders from a competitor or another industry—someone who has experience with the new capabilities that they want to develop and who can help them lead the changes they need.
Pitfall 2: Listening Only to Leaders
Amelia focused her diagnostic efforts on interviews with the company's leaders. This makes sense. Leaders run the business. Only they have the strategic view of what is important and what is not. But what else is a leader? Leaders are also human beings, defined by their own desires and experiences. They may perceive some parts of the organization as weak, simply because the parts do not fit with the leaders' personal objectives or those of their business units. This is nothing unexpected: it's a natural phenomenon and, often, a part of strong ownership mentality. However, it means that you also need to corroborate and challenge their views by securing objective facts and by asking others.
Leaders also typically see the problems of the present through the prism of their past experiences. An operational leader who has moved up through the line organization cannot help but understand problems in terms of his or her own frontline experience. Again, this is part of a leader's strength. However, the world may have changed since then. Today's generation has very different skills, attitudes, and expectations. Regulation may have moved on. Competitors behave differently. New approaches have been invented. Or a leader's formative years may have been spent in one particular region (say, Asia) and now the leader is running the US business, which will have some similar, but also many different, challenges. A leader may know this intellectually but is often still emotionally influenced by the biases of his or her early experience.
All this means that in a diagnostic, you need to reach the parts that others cannot reach to understand the issues from different perspectives. This means going down through middle management (the “clay layer,” as we often term it, because of its intransigence) right to the front line. And it means understanding the regional differences if a company has a large geographic footprint. Neil Hayward, group people director of the UK Post Office, told us how he went about this step: “I was shocked how little was understood centrally about the organization before the work began. You need to understand not only which roles sit where but also what those roles do. When we did this, we discovered that we had to remove a largely redundant layer in the organization that in most divisions was not really required.”
From our experience, we have found that three things hold true across many companies. First, leadership is usually more optimistic than the front line. Next, leadership and the front line often agree on many solutions, but the sticking point is middle management, which often has much less incentive to change. Finally, the United States and Asia are usually more optimistic than Europe. Of course, these trends are sometimes overturned, and when they are, we have an interesting case on our hands, where we really need to dig deeper.
By searching for the positives within a company, you may also find solutions to problems. Suppose we are working in a consumer goods company and the sales function is not working well. We want to fix it. But rather than implanting an idea from another company—an operation that risks organ rejection—we might find that the sales function in one business unit is doing better than those in the others. From this successful unit, we can learn an approach that actually works in the rest of the company. (In Amelia's case, it is worth investigating whether the US business unit really has solved many of the issues or if it is simply being more optimistic—as our experience might suggest.) We might even move some of the staff from this successful business unit to others to pollinate good practices. That would be a far better idea than imposing an approach from another company that we don't fully understand.
Talking to the whole organization (or a sample of the whole organization) is often not enough. Ideally, you need to go further in your diagnosis and understand what people outside your organization think. John Ferraro, the former COO of EY, advises leaders running reorganizations to “look beyond the boundaries of the current problem. Really look at what stakeholders want. Be willing to be radical.” To do this, we encourage our clients to seek the views of customers, suppliers, and other stakeholders to understand what these groups would like to see from the company or business unit.
Pitfall 3: Relying on Hearsay
Amelia has done her best to put together a fact base for the reorganization, but so far all she really has is hearsay: what the leaders of the company have told her they believe. Of course, this is in itself a fact: leaders really do feel this way (although it is also not uncommon for them to reveal a partial picture to influence events). But it is not sufficient. You also need to get some more objective facts on the table. One set of facts are those from step 1: facts about the performance gaps in the company. Comparing these and what people say enables you to perform a very simple analysis, which we like to call “what leaders think is broken” (from the interviews) versus “what really matters” (from the analysis). If you do this, you can then construct a Venn diagram like the one in figure 4-1, which we have populated with examples taken from Amelia's case.
Figure 4-1
Venn diagram of what is broken and what matters
This is a helpful analysis, because it can guide your actions. The category that is shown in the intersection between “what leaders think is broken” and “what really matters” is the sweet spot. The second category, things that “really matter” but that no leaders seems to think are “broken,” is harder: they are potential blind spots for leadership. You need to think through the argument for change more carefully. The third category, things that leaders think are “broken” but that don't really matter, is the one to be careful of. It can suck in a lot of time and effort, with very little benefit. You might launch a few actions in this area simply to gain support for the reorg. However, you should clarify early on (in fact, in this very step) that this category will not be a focus for the work.
It is also important to understand the reasons behind the gaps in performance, particularly if one objective of the reorganization is cost reduction. First, you need to define the costs that can be influenced through the reorganization, that is, internal staff costs, contractor costs, related costs where the number of staff is the main factor (e.g., travel, expenses, and computer costs), and other costs that are influenced by staff numbers, but that may also have a fixed-cost element (e.g., buildings and training). The critical thing to understand is the activity drivers of these costs and how they can be addressed. For example, in the compensation and benefits function of HR, you might look at the number of compensation benchmarking studies carried out and understand whether you can run them less frequently, more efficiently, or both. Unless you understand how these activity drivers can be reduced, you will find that contractor and/or head-count costs will start to creep up again later (for further details, see appendix A).
To do this, you need to tap the wisdom of the organization in a structured way, through surveys. This task goes hand in hand with the previous points we made about reaching deeper into the organization. If you are working with consultants, they may have an existing structured survey you can use. If you are working alone, there are simple ways of developing your own survey by listing all the elements of the organization (across process, people, and structure), printing each element on a “playing card” and having interviewees sort these cards into separate piles on a “game board” (e.g., “significant issue,” “not an issue,” and “strength”). This approach, which we have used many times, enables interviewees to sort through dozens of issues in a short period of time when discussion of all these issues would take hours. It enables you to quantify the results of the interviews: Do people agree on the issues or do they disagree? Are there any interesting splits—for example, between corporate center interviewees and business leaders? And it is a more fun and interactive way of engaging with interviewees. Table 4-1 illustrates organizational issues for a corporate center reorg, figure 4-2 illustrates an issue card, and figure 4-3 shows a game board. Social media—such as company discussion boards—are another great way to gather insight. One objection we often hear about this approach is that it will spread alarm in the organization. However, you will be kidding yourself if you think that people know nothing of your plans. And typically, asking people what they think is a great way of building support for your actions (as long as you then listen to their feedback).
Having considered these three pitfalls, let's now look at some real-life examples of winning ways to address them.
Sample organizational issues for a corporate center reorg
| People |
1. Alignment on future strategy
2. Clarity around the role of the corporate center
3. Time and effort focused on the decisions that really matter
4. Alignment among the management team
5. Appropriate balance between timely decision making and consensus
6. Appropriate balance between common central decision making and local responsiveness
7. Constructive challenge to decision making
8. Analytical rigor informing decision making
9. Establishment and communication of a corporate vision
10. Direction provided to the business by the corporate center
11. Desired culture driven by the corporate center
12. Desired behaviors determined and modeled by the corporate center
13. Strategy capabilities
14. Planning capabilities
15. HR capabilities
16. Finance and accounting capabilities
17. Commercial capabilities
18. Analytical capabilities (e.g., network modeling, forecasting)
19. Capabilities in operations
20. Capabilities in capital projects
21. Contracting and procurement capabilities
22. Government relations and other stakeholder management capabilities
23. Regulatory capabilities
24. Customer management capabilities
25. Risk management capabilities
Organizational structure
26. Organizational structure to support development and implementation of group strategy services for the business
27. Organizational structure to deliver HR activities
28. Organizational structure to deliver finance activities
29. Organizational structure to support contracting and procurement
30. Organizational structure to deliver secretarial function
31. Organizational structure to handle external relations
32. Organizational structure to handle regulatory engagement
33. Organizational structure to deliver transactional services for the business
34. Clarity on division of accountability between corporate center and the business
35. Clarity on division of accountability within the management team
36. Shared services provided to the business by the corporate center
37. Centers of excellence established in the corporate center
38. Location of corporate center activities
39. Risks identified in the business by the corporate center
40. Size and capability available in the corporate center
Processes
41. Strategy development process
42. Initiative prioritization and business planning
43. Investment prioritization and approval process
44. Capital project delivery process
45. Contracting and procurement process
46. Talent attraction and development process
47. Employee engagement
48. Safety process
49. Finance process
50. Risk management process
51. Performance measurement and management process
52. Standard setting and assurance process
FIGURE 4-3
Game board
Winning Way 1: Identify Strengths to Preserve
An Asian oil and gas company was entering challenging times. It had recently received a large investment from an international partner. But despite years of success, both the original owners and the international partner were disappointed by the company's current performance. It was clear that planning, exploration, and capital project design needed to improve. A project manager was appointed by the international investor to discover the root causes of the current problems—and to identify the causes of the company's historic success.
Compounding the project manager's problems was a cultural dimension: given the Asian company's kudos and the oversupply of highly qualified professionals in the local market, employees were unwilling to speak up about what was really going on, for fear of losing their jobs. This reticence was both to their own detriment (they lacked empowerment and felt disenchanted) and a problem for the company's leaders (when no one tells them what is really going on, and when no one else is willing to make decisions, leaders have to work very hard). This cultural challenge made it difficult to understand the root causes of the organization's weaknesses.
At the same time, seconded staff from the international investor also came with their own cultural baggage. Many of them could only see the weaknesses in the Asian company. They thought that if only Western practices were substituted for the company's own, all would be well. They failed to appreciate the company's strengths. In fact, in terms of speed of decision making, innovation, contractor cost management, and speed of project delivery, the Asian company had a lot to teach its international partner.
The project manager sought our help in getting beneath the two cultures and finding out what was really going on. For the Asian company, we used a mixture of surveys and one-on-one interviews with a cross-section of staff. While these staff were not happy to speak out in public gatherings, in the one-on-one sessions, with the promise of confidentiality, they were very open about both the weaknesses and the strengths of the company. The weaknesses were a lack of collaboration across different functions, a lack of formal processes to judge risk, and insufficient delegation (as the company expanded its operations, it was no longer practical for all the decisions to be taken by top leaders). At the same time, we also learned the strengths of the company: the ability of its top leaders to make decisions quickly and whenever required (versus the more bureaucratic approach in international companies), how quickly work was delivered in response to these decisions (the speed outstripped international peers), and the quality of the technical staff working in the company. Rather than presenting this in a typical PowerPoint deck, we instead printed out posters containing the research, data, and the interview quotes (covering issues that had been raised by multiple interviewees). Senior leaders of the Asian company and the international investor viewed the posters in a gallery, taking their time to digest what they meant, given that this was the first time they were hearing any of these inputs.
Given the importance of maintaining a company's strengths, we knew that the trick in designing the new organization would be to identify the capabilities that the Asian company could source from its international partner to address its weaknesses, without undermining its strengths. This approach would mean modifying dramatically any processes that we imported into the company to make sure they would work in the very different culture into which they were being implanted.
Winning Way 2: Make Sure You Hear Everyone's View
One of our projects was with a consumer goods company that, historically, had performed very well and had a long track record of creating highly innovative products. However, in recent years its innovation had faltered while that of its competitors had risen. The leadership team was very conscious that sales were decreasing but could not understand why organizational performance was declining, why decisions were taking longer to make, and why less interesting new products were being suggested to senior management.
We started our work with a broad survey of the organization to uncover the most important issues. Unlike the typical executive overoptimism that we mentioned above, the leadership in this company was far more negative than middle management or the front line. As we looked into this further, conducting a series of interviews at different levels and mapping some of the processes to see how they were broken, we found that the leaders were more negative because they had a much better perspective of how the company was placed relative to competitors—and knew the answer was not good!
The survey gave us a clear indication of what was going wrong. A huge amount of work was being replicated across the different levels of the organization, with the regional structures duplicating much of the work carried out at country level, and the global organization triplicating it. This was hugely frustrating to everyone in the organization and meant that decision making was very slow. The duplication of effort was not the only issue—for example, there were also problems of performance management, with very little being done to address low performance in the business, meaning employees lacked the motivation to do an excellent job—but it was the primary one.
The business could have addressed this problem through changes to processes so that staff clearly knew who was responsible for each step. The challenge was that this was likely to be a temporary fix; with so many people in the structure having overlapping responsibilities, the processes would become complicated again after a while. So we advised a more radical fix: abolish regions almost completely, which would give countries far more autonomy and speed up decision making. Though this change was hard to implement, it created much more fulfilling roles across the structure, as managers were much more empowered and there was therefore much less second-guessing. We then redesigned the major processes (like product innovation) to simplify them and to reflect this new structure. Together, these changes shortened product innovation from fourteen months to six.
Winning Way 3: Triangulate with Analysis
In another example, working with a very fast-growing Asian retailer, we again conducted a survey to figure out where the company was working effectively and where it was doing so less well. This company had grown its revenues by more than 200 percent per year by rolling out retail franchises across different countries. However, it suddenly found that its impressive growth had stalled. Our analysis showed that the number of decisions had grown and grown as more and more franchise brands had been added, until the whole decision-making process, which had originally been very informal (almost all decisions were signed off by the CEO or CFO), had become logjammed like traffic on a highway. Executives were hugely frustrated as decisions that used to get made in a day were taking a month or longer.
Again, we conducted a survey, which created a further piece of insight: the countries closer to the corporate center were unhappier—significantly so—than those further away. So we started gathering data to find out what was going on.
We found that the countries that were further away had greater delegated accountabilities than those closer to home and that these accountabilities were clearer. Indeed, countries located near the corporate center often had roles that sat partly in the center and partly in the country. This had not mattered when decision making was quick, but as the company grew, it mattered a lot. So the solution here was to clarify where each role sat and what decision-making authority it held (in fact, more oversight was needed, rather than less, for some of the far-flung operations).
Effectively, as we explained to the CEO, the company was trying to operate a large corporation using the governance structure of a small start-up. For example, any decision on point-of-sale signage in any retailer was being decided by the CEO himself for countries near the head office. This clearly was not sustainable beyond a certain organizational size! The company now needed to prepare itself to grow at scale. We learned the importance of looking at each geographical location (and, indeed, each function and business area), as the situation is never uniform, and then triangulating the findings with facts before deciding on how to fix the issues.
. . .
Returning to John and Amelia's reorganization of their multinational utility: how might this step have played out differently? Let's look at an alternative scenario.
Amelia has the clarity she needs on the reorganization's objectives. The next step is to understand the patient that she will be operating on: which parts are healthy and which parts diseased. She gathers her wider team together to list the organization's anatomy. She makes sure to cover people, process, and structure issues and to consider every department of the company. For example, for capital projects, she lists the following:
- Capabilities of internal capital project teams (people)
- Capabilities of engineering, construction, and procurement contractors (people)
- Investment decisions in the corporate center (process)
- Capital project planning (process)
- Capital project execution (process)
- Organizational structure for capital projects (with accountability in the business units) (structure)
- Clarity of roles for different staff involved in capital projects (structure)
She does this for all other areas of the business: retail, trading, operations and maintenance, procurement, and back office. Pretty soon, she has a list of forty potential strengths and weaknesses. Although she knows a lot about her company, the participation of her extended team of experts from each part of the business proves essential, both to highlight a number of areas she had not thought of and to make sure that each item is expressed in a way that ordinary staff will understand.
Next, Amelia sits down to think about the best way to deliver her diagnostic. For the leaders of the company, she arranges interviews and prints out the issues on playing cards, so that each interviewee can sort them into one of three piles on a game board: “Real strength” (limited to five cards), “Not an issue,” and “Weakness” (again limited to five cards). This process takes twenty minutes, with the remainder of the one-hour interview focused on understanding the interviewee's choices of strengths and weaknesses. At the end of the interview, Amelia asks each leader for five recommendations of frontline staff who could also be interviewed on the issues by her team.
For the wider workforce, Amelia devises a quiz using an internet survey tool that enables the participants to sort the cards electronically. She also provides space for respondents to add comments. The respondents' geographic locations, business units, and level are recorded to aid analysis, but otherwise the survey is anonymous, to encourage candor. She sends the survey to a random selection of two hundred staff members who together represent all the major dimensions of the business. The survey goes out on a Monday, with a deadline set at the end of the week. (Amelia figures that with the pressure of operations, the surveys will either be done immediately or not at all, so giving a longer time frame does not help.) She monitors the number of respondents throughout the week, and with some follow-up from herself and the leaders whose divisions have completed few surveys, she gets a 60 percent response rate. She decides to extend the survey for a further two days the following week and, with some more chasing, reaches an almost 80 percent response rate.
At the same time, Amelia asks her extended team to conduct further analysis on the performance gaps identified in step 1. She starts by holding a workshop with them to explain the concept of value-driver trees (a breakdown of each unit's profitability by its components), which highlight the people costs and the capabilities for growing revenues. Given the practical culture in the company, she does this through two worked examples from one part of the business that she prepares before: one for the US business as a whole and one for the central finance function. The team is then asked to analyze the financial results of each business unit and function to understand what is driving costs and revenues and where performance in one unit lags another. She gives her team two weeks to complete the analysis.
After three weeks, Amelia is ready to share the results not only with John, the CEO, but also with his entire leadership team. Instead of the usual boring company presentation, Amelia tries a different approach. For the hour before the regular management meeting, she invites the leadership team to the boardroom, where she has hung posters summarizing the results. She has structured the material, splitting it into the top five insights across the company:
- The United States and Europe have different challenges.
- The leadership is much more optimistic than the workforce.
- Processes are a bigger issue than structure.
- Potential revenue opportunities are as big as cost savings.
- The corporate center has a different view of the strengths and weaknesses than do the business units.
On the posters, she provides charts summarizing the survey and quotes that bring the messages to life (she takes care to include only points that have been mentioned a number of times in the quotes). She asks the CEO and other leaders to walk around the room, read the posters in whichever order they like, and ultimately come to their own conclusions on what the material means.
The leaders are struck by the messages in the posters—some of which they had not realized before. John sums up his reflections at the end of the session, and the leadership agrees. Afterward, Amelia suggests sharing the detailed findings with the wider workforce. This suggestion is a step too far for John, however: he worries that the information may reduce confidence in the company and even leak into the press. He does, however, agree to put out a summary communication on the findings to show employees that their input was worthwhile.
How to Handle Communications in Step 2
Remember that, as in step 1, communications in step 2 must start from the needs of your audience.
- Staff and leadership needs: This is the step when your reorg team starts to interact with the organization, asking for analyses and interviewing people. The staff will wonder why this is happening. And if they seem to be involved in the process but their peers are not, the participants may worry that their jobs in particular are threatened. If either leaders or staff start to believe that their roles are threatened, the most skilled and highest-potential people (those who can easily get jobs with your competitors) will start to dust off their CVs and investigate other options. If leaders find themselves shut out of the process, they may also start surreptitiously undermining the reorg. In addition, because employees often—indeed, should—have friendly relationships with suppliers, customers, and other outside stakeholders, you may find news leaking into the outside word.
- What to communicate: From the previous step, you will know which areas of the organization most need investigation and which do not. If you have followed our advice in this chapter, you will also be looking for strengths in the organization as well as weaknesses, and this will influence the reaction in the organization (much of the communication difficulties in this step stem from the team's only investigating “problems”). At the beginning of this step, you should announce that your reorganization team will be contacting people in the organization for help and which areas of the organization will be the focus. You also need to explain why these areas are the focus: if you don't fill that vacuum, people are likely to assume that you are starting there because they are the worst or will be cut the deepest. You need to equip your management, reorg, and sales teams with agreed-on Q and As with which they can answer internal and external queries. At the end of the step, you should share the results of your diagnosis—at the very least, the headlines. This shows that the people's participation was not wasted and reinforces your commitment to protect the strengths of the company if changes are needed.
- How to communicate: In addition to an overall communication to the organization from the CEO or leader of the unit in question, you should also have all the leaders brief their own teams if they are likely to be contacted.As highlighted at the beginning of the book, it is critical to track whether communications are being read, what the responses are, what questions are raised, and what answers are given. Your reorg project manager needs to get into the regular habit of asking at project meetings, “How many people received the last communication?” and “What was the reaction?” If the manager does not enforce this practice of checking for reception and feedback, it's quite likely that he or she will focus entirely on transmitting messages and forget to provide intelligence on what the results were.
| Pitfalls | Winning Ways |
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How to Use These Ideas in Your Organization
- Start by defining the elements of the current organization that you want to test, with input from experts across the organization. Define a structured way to test what the strengths and weaknesses are—for example, through a card sort, a survey, or social media. Make sure that your approach leads to input from across the organization: from the most senior leaders to the front line, across different geographic locations, and between the corporate center and different business units.
- Make sure that you understand the drivers of performance gaps—in particular, the activities that drive people costs. Remember that to reduce people costs sustainably, you need to change or reduce activities. Take care to consider the implications of reduced people costs (in office space, facilities, training, travel, etc.) so that you can address these, too. Triangulate between different sources of data to ensure that you have a robust fact base. We've included in appendix D a template for identifying what really matters in your organization; it is similar to figure 4-1.
- Determine the most powerful way of sharing the findings of your diagnostic with the leadership of the company (e.g., through a gallery walk rather than a straightforward presentation). Use the raw data, but organize it into themes to make it easier to understand. Consider which parts of the material can be shared more widely throughout the organization. At least share a summary of the findings so that people can see that their feedback has been listened to.