PRELUDE
Within the context of the need for an enterprise to re/organize, we begin by dispelling a number of myths about how, and who is best suited, to organize or re/organize an enterprise. This leads then to the introduction of the more pragmatic and effective systematic re/org process that is the centerpiece of this book.
We begin with questions:
How many times have you been re/organized? What was the impact on the enterprise? Was it positive or negative?
If you have been re/organized several times you are likely to be working for an organization that has never been properly aligned to achieve its optimal performance level. This is typical of organizations that have re/organized five or more times in a ten-year period. Such businesses keep searching for the right organizational structure, but never quite achieve it; they fumble along doing business as usual. Sure, things get done; people come and go. Managers climb the organizational ladder and want to do things their way; outside executives are hired to do things a different way. Consultants are engaged with re/org methodologies that often don't turn out to be as good as claimed. Cookie-cutter solutions are tried at great cost (e.g., the "Shared Services" silver bullet). Old ways of doing things become legacy systems that are difficult, if not impossible, to change or eliminate. And all this contributes to a circular attempt at getting work organized the right way.
How do we "Right the Enterprise" in a way that makes sense to everyone and achieves—consistently and efficiently—the goals of the organization? One that works smoothly and can make seamless changes? One we all can enjoy working for?
As we neared the completion of writing this book, on October 15, 2013, a long-time professional colleague wrote an insightful, unsolicited summary concerning the recent re/organization he had experienced following his company's merger with another company. That summary captures rather well the feeling of most people when it comes to experiencing re/organization. He wrote:
We are deep in the depression of merger blues with changes occurring routinely. From my perspective, the changes are primarily good for the corporation's bottom line, the Sr. Officer's bonuses, and possibly the shareholders. I see and feel very little compassion for the employees, hear what is just lip service, and believe those who can will look for greener pastures and those who can't (or won't) will just hang around in a state of apathy waiting to see what is going to happen next. In other words, if you're at the top of the company, everything is going according to plan. For everyone else, at least all of the non-represented employees, it's just another poorly executed merger and reorganization."
Much of the cyclical, inefficient and poor re/organization behavior, such as reflected in the above commentary, is not surprising. Companies grow in leaps and bounds, adding individuals to get urgent work done rather than to execute well-defined, interlinking processes that best serve the customer. Groups and teams are mixed and matched to achieve what seems like, in someone's opinion, the best way to do things.
This piecemeal approach is somewhat surprising because it is generally accurate to say that many of today's enterprises are replete with well-defined processes. These processes often come from so-called "re-engineering" or "Lean" methodologies. You'd think that the enterprises which use them would therefore be pretty well organized. But even these well-thought-out processes—perhaps created in too much detail—usually struggle to be translated operationally into meaningful actions by individual job holders, teams and an appropriate management structure.
Still other businesses, which may not have defined their processes so succinctly, seek to achieve their ends with well-meaning people hired to execute the work in a climate of constant and recurring problems and inefficiencies. Goals may be achieved, but they are accomplished at minimal levels of efficiency, with wasted money, and by unhappy employees. Compound this with the introduction of new technology and/or of needed cultural changes, and the stage is set for new chaos. Re/organization and the introduction of new technologies can and often do waste time and resources, generating frustration that reduces productivity. Finally, we don't need to overemphasize the problems that mergers and acquisitions present: clashing cultures, different methods and systems of doing the same things, and employees wondering where they fit in the new organization.
There has to be a better way to re/organize—or initially organize an enterprise from its very inception. Everyone with an enterprise—company, division, department or team—could benefit from a well-understood, systematic methodology for re/organizing work. If there is a common way to look at and define work, the entire enterprise can come together to organize it quickly the right way (i.e., efficiently and effectively). Then the enterprise can be tweaked, instead of constantly re/organized, when technology and other changes are deemed necessary.
As consultants to many businesses, we have repeatedly experienced executives and managers—to the angst of workers—struggling to get organized the right way. After all, almost every re/org is done solely by the executives and managers, usually without rank-and-file involvement. And while many executives may employ elaborate process reengineering or Lean Manufacturing methodologies, they mistakenly think this analysis alone will produce the re/org they need. However, these undertakings often show that the detailed information could not be translated into operational use by individual workers and teams. While using these analytic techniques is highly desirable and at times necessary, they typically miss the work definition that translates into the best organizational and individual/team performance structure. Instead, the result of the usual re/organization is a kind of "organizational paralysis." Because these attempts at re/org do not involve all of those affected by such changes, they are not readily accepted. Those affected don't readily buy into the change, no matter how much of a change management program is employed. That is because change management is often seen and approached as an add-on to process and organizational change, rather than being an integral part of the very definition, alignment and implementation of work changes.
Recognizing that businesses do not generally know how to organize or re/organize enterprises efficiently or effectively, we will introduce a very systematic, easy-to- understand and utilize Re/OrgSystem based on what will be identified as the Language of Work ModelTM. You will find that this systems approach to re/organization really works because it clearly delineates and aligns all the various levels of work, from top to bottom in the company, and reveals how work should best be managed and facilitated. And, as an added and important bonus, the system will more easily allow you to make the ongoing changes that are inevitable in today's rapidly changing business environments.
Let's Be Honest About What You Really Know or Don't Know About Re/Organization
If you think you really know how to re/organize your company or your own team or department, chances are good that you don't.
We realize that is a brash statement to start with. We all want to believe we know what we would do if only we were in charge. Our logic should be sufficient to improve what presently exists. It can't be really that hard to find a better way to do things, we think. We have the good intentions, the skills and knowledge needed, and the real influence an individual (or even a well-selected group of people) have to re/organize a company. A proven process is needed; so is the involvement of as many people affected by the re/org as possible. This is not said in any way to discount anyone's good intentions, but rather to recognize that re/organization is a science, not an intuitive guessing game.
Lest you feel alone in lacking the skills for re/organizing, know that we, who have helped many companies re/organize, are not depending upon our personal insight, our intuition or even our prior experience, to make re/organization efforts effective. Rather, we depend on the system we use. There is a logical sequence based on an alignment of work elements—what we might simply call a Re/OrgSystem—to organize a company, division, department, work group or team for optimum achievement of desired results. It's a way for everyone involved in the enterprise to understand the work and how to align and manage that work better and together.
The Re/OrgSystem will be the focus in this book. The system is based on a scientific approach, known as Performance Technology, that has been evolving since the early 1960s. The specific approach emanating from that technology, known as the Language of Work Model(tm), was developed by Danny Langdon—one of the early pioneers in the technology—in 1993. Re/Org is a system of work understanding, definition and application proven through successful implementations and validated in many different kinds of enterprises. When added to one's best intentions, this Re/OrgSystem will ensure that your re/organization is the best that it can be. In addition, it can be altered slightly on an ongoing basis to respond to the inevitable changes as time passes.
Re/organizations often fail due to the idea that details should be kept secret from all but a select few employees. This secrecy has unfortunate results: The rumor mill goes into overdrive; whispers in halls repeat old, discarded possibilities; productivity goes down; resumes go out; the organization becomes much less stable than it was at the outset. In addition, employees excluded from the process may feel not only that the changes are being "foisted" on them, but also may strongly resist the new structure and procedures. A scientific approach—a process emphasizing the work to be done and including the large-scale, meaningful involvement of employees at all levels—can build buy-in and a successful outcome into the re/organization from the very beginning.
We do not suggest this wider involvement of the workforce lightly. Rather, we recognize that a successful re/org takes the contribution of almost everyone's organizational knowledge. After all, they are the ones who know the most about the present work, and they are the ones who will have to make the changes. They are also really the ones who have good ideas for making things better, and their acceptance and ownership of the changes will greatly ease implementation. In our experience, we've repeatedly seen that the workforce has the answers; they just don't know how to formulate the questions and express their solutions. Nor do they have a workable platform of work definition to clearly reveal their knowledge and solutions. They need a systematic re/org process and facilitators with a proven methodology to help define and draw out the work knowledge and the solutions inside them. Then, and only then, in the structure of a scientific matrix, can they contribute their understanding of the work and their ideas of how to make it better, thereby making a commitment to the initial and future success of the project.
Historically, management feared that if employees knew they were going to be re/organized, they would sabotage the effort . . . and/or attempt to protect their own turf. The methodology we describe here prevents the majority of that phenomenon, because the nature of the work is made so clear that change is something for which employees can clearly see the benefit. Indeed, employees embrace this approach in large part because they have been asked to articulate what they know, allowing them to develop a shared and clear understanding of the work and of the need for change. And because they are making significant contributions, they can buy into what they have agreed to change for the better.
One additional assumption needs to be recognized before we get into the process of how to re/organize in a systematic and scientific way.
Re/organizations surely need the insight, leadership, and sponsorship of executives and managers who best know their organizational goals. When their insight is married to the recognition that others can help them determine how to achieve the goals, then everyone is prepared, within a systematic process, to get there together. Commitment to changes emerges clearly. Executives will retain their roles of providing sponsorship, commitment and a guarded level of participation. They will continue to set the goals for the re/org, sponsor strategic changes, and establish the expected financial goals that should result. But—and it is a big but—there is one role that they need to surrender to achieve a better way of re/organizing an enterprise.
The activity that executives have long held as their sole prerogative is determining at the outset the actual organizational structure—that is, determining where the boxes on the org chart go. In the method we introduce, drawing the org chart is nearly the last stage in the systems process, not one of the first steps. Executives must wait until core processes have been defined and accepted and until the jobs needed to accomplish these core activities have been identified. They need to see how these jobs can be organized into functional teams or other work groups before drawing charts and filling spots. As noted, the executives will contribute operational philosophy and provide what we will describe here as the "work support" in the form of various kinds of interventions that need to be in place to get work done. Their role as leaders and facilitators will be paramount to the systems approach to re/organization. Without their role, the re/organization will fail. But, above all, executives are not to be dictatorial; they must be willing leaders, supporters, champions and advocates for change in a collaborative way that makes people feel valued, included and accepted as an integral part of the re/org process.
Interestingly enough, of all the ingredients necessary to achieve an effective re/organization, personal intuition is rarely important. Personal experience in your current organization or from another organization is only your experience and not necessarily any more valuable than the experience of others. Collective opinions, on the other hand, within the context of a systemic, scientifically proven approach, can and do work. And, as will be revealed here, a proven approach that is based on a model of work which everyone in the organization understands and uses is the key ingredient to aligning the work to the desired goals and strategies for success.
So what's to be done? Where do we start and what comes next? Who do we involve and how? What are the tasks of senior management, line management, and equally importantly, the workforce? Our beginning point is the recognition, acceptance and demystifying of the current causes and practices involved in re/organization, lest we repeat earlier failures while employing a more workable systems approach. Managers and executives desiring the most successful possible re/organization must examine and eliminate their personal myths and biases about how to re/organize and replace them with a more scientific approach. Our goal is to involve as many people as necessary to ensure broad understanding and acceptance of the re/organization.
What Usually Drives an Enterprise To Re/Organize
Enterprises re/organize for a variety of reasons, some good, some not so good. For example, technological innovations bring about the need to do things in a different way, involving new processes, tools, jobs and skills. Or perhaps there is a compelling reason to re/organize based on the need to survive—such as changes in market conditions, falling profitability, and so on. These are good reasons. Other times it's because someone new is in charge and decides he or she has a better way of doing things or wants to implement another strategy. Perhaps there is malaise, boredom or deadwood in the C-suite . . . a bad reason for re/organization that tries to pass itself off as a good one. Before we get into the meat of describing how to organize or re/organize no matter the reason, let's review the more common drivers leading to a perceived need to re/org and describe some of their associated difficulties. If a re/org is organizationally unnecessary, that, too, should be recognized.
Because the New Executive Wants To
An executive may well want to re/org based on a business need, but that choice can often appear more like Dad or Mom saying, "Because I said so." Since this is a prevalent excuse for re/organizing, it should be recognized and addressed—and, most importantly, a necessary re/org should be accomplished using a proven approach.
For a number of personal reasons, executives often feel that once they are named the top dog, they know more than anybody else how the business should function, so: "Surely," they think to themselves, "I can re/organize this company the way it should really operate!" Unfortunately, it's not like any of us grows up knowing what it's like to re/organize people and resources. It's not like family life provides any experience of re/organizing ("let's downsize that nagging sister"), so we might wonder where anyone learns how to re/organize the right way.
When an executive has a gut feeling that re/organization is needed, she or he usually begins by moving people and departments around on paper. That old adage that many a company was organized on the back of a napkin isn't far from reality. Changing the org chart is, after all, the most expedient method of re/organizing. The problem is that the napkin approach has not proven to be consistently effective as a method of change. Practically every executive gets their re/org experience from a re/org they personally experienced under some other executive. Others may have tried it themselves as the head of a division or department at some lower level on the company ladder. Now in charge of an entire enterprise, they repeat what they have seen or tried; they may even hire a consultant for additional help. These efforts usually result in lots of movement, but not much added effectiveness.
Time and again enterprises have suffered from these kinds of major upheavals. This kind of re/organization confuses people and usually does not improve processes, jobs or teams, or the culture in any fundamental way. Rather, it results in new alliances being sought, people becoming uneasy waiting for the next shoe to drop or hiding out in fear of being downsized or shifted to some other unit. The versions of hiding in the organization are many: not suggesting improvements; feeding the rumor mills to disparage the value of particular individuals; or departments feeling others are overhead, fluff or the darling of a particular executive; and on and on. None of these negative expressions is a sign of a healthy organization, one that is operating the way it should be.
As an executive, be cautious about your personal skills at re/organization. The wiser executive will be the one who adheres to a defined, proven process of re/organization, one driven by their exemplary leadership as the chief executive officer. Effective re/organization is really not so much a result of the executive's direct organizational skill and knowledge, but rather of leadership with clear ideas and goals, dedicated participation by employees, ongoing support and a demonstrated belief that the re/org process being employed will work if everyone cooperates and follows it.
Exemplary Case Study: Life Insurance (See Appendix,) www.performanceinternational.com/life-insurance-case-study/
Process Innovation/Changes and Associated Change Management
Today innovations in technology often trigger the need for organizational change. Keeping up with competition, or jumping ahead, is a fact of business survival. End-to-end client-centered processes (e.g., SAP, Oracle, etc.) that serve customers better usually demand that the organizations and people who manage them also be re/organized. Unfortunately, such re/orgs typically take much more effort, time and money than expected.
A technology re/org commonly causes a struggle for acceptance at the individual and team level, or a reversion to legacy systems. Such behavior cannot be tolerated by the agile company or department that needs to change. If not done carefully, the process of change itself causes unintended implementation problems and can even destroy a department or an entire business. A re/org system that better tolerates such process changes, integrates well with those changes and is an efficient use of time and money, can prevent such negative reactions. One such system is the Re/OrgSystem that will be presented in later chapters.
Another issue, related to technology change and re/org, is worth noting here before moving on to the other enterprise needs that drive re/organization.
Organizational change costs the business money not only in the capital investment in new technology, but in the disruption of normal business practices, and in employee learning curve time for new procedures. Therefore, organizational change must be managed.
Note on Availability of Case Studies:
All case studies are from actual enterprise re/orgs by the authors using the Language of Work Model. The cases, where needed, have been changed to maintain confidentiality. The entire set of case studies are found in Facilitator's Guide to this e-book and are also available from the authors website at: www.performanceinternational.com/download-case-studies/
Most often those designated to run the change in process management—be they from within or hired from without—make a self-defeating mistake: the very means they use to manage the change—often referred to as Change Manage-ment—is an add-on to the overall process change, rather than an integral component of the re/org.
The distinction is a rather subtle one, so let's make it clearer. Simply adding a "Change Management" program to a process or re/org change is self-defeating. Change management must be inherent in re/organizations so that employees can embrace and understand the changes as they occur during analysis and definition of the work. Don't put your enterprise into the position of having to sell change; let acceptance occur as part of making the changes due to widespread participation. In other words, when those who must change are the ones who help decide what is to be changed and how, understanding becomes inevitable. The workforce buys into the changes even as they occur. Later, we shall see how this can be accomplished with relative ease.
Exemplary Case Study: Major Utility www.performanceinternational.com/downloads/major-utility-case-study/
Needed Change in Enterprise Strategy
When certain key aspects of the enterprise, or even the entire enterprise, are not going the way they should, a change in direction is dictated. For instance, perhaps markets reached before have diminished or there are new markets to be captured. Perhaps enterprise sales can be enhanced. Perhaps, through growth, the enterprise has lost much of its direct contact with its customer base, and the customers now feel ignored. A new strategy would improve customer contact and follow-up. No matter how good the new or revised strategy may be, the enterprise needs to operationalize the means to get there. It must re/organize to serve the new direction for existing operations and resources.
Exemplary Case Study: Defense Contractorwww.performanceinternational.com/defense-contractor-case-study/
Need To Improve the Culture
Organizations can certainly die from within. Death may not be caused by poorly designed and implemented work processes, or even by ill-defined and executed jobs. Rather, people are in the wrong positions, managers don't inspire or teams no longer work well together. Teams sharing core processes among them no longer know how to interrelate and support one another. One team's poor or untimely output is another team's nightmare.
Perhaps the culture is not client-centered enough. Perhaps true collaboration doesn't exist, and working within silos is the norm, to the detriment of other groups. Perhaps morale is poor, and people don't feel valued. In essence, the enterprise doesn't adequately support people or work. The company needs a way to analyze the culture (which is shorthand for "the way we do things around here") in order to support work execution and create the optimum environment in which people and processes can achieve the best possible performance.
Exemplary Case Study: College Student-Centric Services www.performanceinternational.com/student-centric-college-services-case-study/
Mergers and Acquisitions
Perhaps no other need leading to re/organization is more fraught with upheaval and loaded with potential danger than an impending merger or acquisition. Not only is life going to change, but the clash of cultures and "someone must go" mentality affects everyone from executive to part-timer. A process to smooth the transition is critical economically, as well as to ensure the success of immediate and future work. It lays the foundation for the evolution, if not the revolution, leading to the new culture.
By their very nature, mergers and acquisitions suggest changes that are twice, if not three times, more complex than the internal re/org of the typical enterprise. Not only will each company be trying to realign itself through absorbing, redefining, and/or combining or deleting resources and processes, but the often- conflicting cultures will not simply morph into a new, combined culture. Consider, for example, the merger of Compaq and HP. One was a cowboy culture, while the other had a consensus mentality. Either they could have re/organized together to benefit from the advantages each had, or the result could have been chaos. Fortunately, they planned for and successfully executed a new best way of doing things.
Exemplary Case Study: Government www.performanceinternational.com/government-case-study/
Cutbacks
Cutbacks occur for a variety of well-founded reasons, not the least of which is the actual survival of the enterprise. Shrinking markets, out-of-date products or services, less than efficient operation, and many other causes necessitate cutbacks. Determining how those cutbacks will occur, without pure guesswork or cronyism, is key to successful re/organization with as little disruption as possible.
When layoffs are necessary, those in the top tiers may not know the comparative value of individual contributors in the lower levels, and those below the top tiers rarely understand the reasons for the layoffs. Fears for their job security abound. It must be possible to re/org with a minimum of negative impact on productivity, in ways ensuring that those leaving and those left behind understand the reasons and accept them.
Exemplary Case Study: AQUA Company (See Appendix) www.performanceinternational.com/aqua-company-case-study/
Growth
When a business is just beginning and filled with opportunity, the joy of being in a start-up creates exhilaration. The challenge is to maintain that feeling as the company flourishes. And a company responding to explosive growth often grows amorphously, slapping into place jobs and personnel to meet immediate demands, without reference to the longer-term shape of the enterprise. When the enterprise has grown quickly, working with others is not as personal, getting management's attention is less possible, and the feeling of being a part of a team is lessened. It must be possible to involve existing employees in a re/org due to growth so that they don't feel left out of the enterprise they cherish so much.
Exemplary Case Study to Review: Nursing Services www.performanceinternational.com/nursing-services-case-study/
Problems Abound
Problems always exist in companies. The production line does not produce enough product; the sales force sells more (or less) than can be produced; the distribution system is weak; employees are not careful enough in their work. As consultants, we have heard it all. When confronted by a problem, executives sometimes decide that a management shake-up, AKA a re/org, is the answer. This decision must be carefully reviewed; otherwise, re/organizing for the wrong reasons will result in more harm than good. The major reason to re/organize is to eliminate obstacles and enhance productivity, as well as to continuously work on and resolve problems. You will learn here that re/organizing systematically and systemically can fulfill multiple organizational needs in terms of aligned work execution, supporting culture and continuous improvement.
Persistent problems soon contribute to the feeling that "nothing works around here." Indeed, people stop exposing problems; they simply mask them. Employees don't suggest solutions because they feel no one will listen. While a re/org might seem to eliminate this inertia, it is not wise to use a re/org to solve problems. Instead, it should be the function of a continuous improvement process within an already well-organized company or department to allow continuous changes to occur.
Exemplary Case Study: Hi Tech www.performanceinternational.com/hi-tech-case-study/
New Enterprise
Planning a new enterprise is a fascinating opportunity to develop an effective organizational system. While those planning the new business have usually done due diligence in developing a concept, strategy formulating strategy and securing financing, it is rare to see consideration given to operational aspects of the new business. These include, but are not limited to, such things as how these core processes will work, what jobs and teams are required, who will best fill the jobs, what organizational structure needs to be built and, especially, what organizational support must be developed. Certainly each of these must be recognized, in terms of both immediate and long-term costs.
Having defined many a new enterprise, including those ultimately funded or not, we are accustomed to the expression of surprise from entrepreneurs who