31 March 2015
Mergers and acquisitions seem to be a rather common theme on news headlines globally today, from the technology sector, to consumer goods, automotive and logistics. You name it. Big companies are getting bigger and pushing sometimes even household names out of markets. The turbulent global economy means that more companies will scramble to reorganize in the months ahead to find a niche they can defend or grow.
Changing an organization’s structure can be an effective way of shaking up the entire operation, channeling the people and department in a more optimal manner and thereby unlock better performance. A new organization chart alone or switching chairs don’t make much of difference unless it has a purpose, a plan, and a leader to set out the new directions and priorities. It is not words but action that show employees throughout the organization that better, faster decisions and execution will be rewarded, even if once in a while someone makes a mistake, trying to learn or reorient a process.
A re-organization brings changes to everyone in the company, intentionally or unintentionally. It creates opportunities but unless there is a management safety net it can cause discomfort or even distress.
Inspired by my recent house remodel project, I cannot help but wax philosophical about this rather “painful” experience, and somehow, I do see similarities between reorganizing a home and a businesses. Below is my attempt to draw parallels –
- Business leaders often seek advice from some management consultancy companies which charge a hefty professional fee
- We started our remodel project with a designer who was going to help with the largest part of the project, the kitchen. Oh by the way we also selected a general contractor but thought there wasn’t going to be many big changes so we weren’t going to need be concerned with the “bones” of the house. As it turned out, there was much more involved and as we did the project, we found really useful things that had needed to be changed for many years but, well no one had taken the time. Suddenly when we stripped the walls back, we had a chance to look at the whole “people flow” and support infrastructure. Just one example was, when the house was built, no one could have envisioned that a wired and wireless network would be part of any new home design.
- Consultants look at your organization, your operations model. How many layers under the CEO? How flat or complex is the org chat? Is the IT system really supporting the business or constraining it? Is the CRM providing the 360 view of the customers that is really needed to find new opportunities? Does the operation flow make sense? Is it generating the most optimal results? And most importantly what is needed to be competitive in 2-3-5 years, is the organization ready? What if something as dull as corporate governance could be improved and reduce the drag on performance?
- Without looking to get in the way of the “esthetic design process”, the contractor we chose said we might want to consider looking at the galvanized piping because it was obstructing the water flow. And, by the way, the electrical system was never designed to handle the number and type of devices that every modern home has. Simple things like all plugs must have three prongs versus the two-prongs in old system. Also, the walls are not insulated and new insulation needs to be put in… endless… What he was saying is you can put it all back together as it was but isn’t part of a remodel really looking at what is needed.
- Organizations that are effective making decisions almost always achieve superior financial results at least in the long run. How good is your organization at making and executing decisions? If you had a different structure or more responsibility at the individual or office levels could decisions happen faster or be more customer focused?
- Our designer said the flow in the kitchen is not efficient. What if we knock out a wall and move the kitchen function North South vs. East West to create a new “work triangle” so that the prep area, sink, stove are aligned and steps could be reduced.
- When looking at a centralized model or a fully decentralized model the question is not who but what. How with either of these forms of organization serve customer better while not negatively impacting efficiency?
- The house designer said the house would be better served with a central focal point and asked what was important, where we like to spend our time in the house? He had to stop us several times and ask is that what you want or just what the current organization of the house permits or fosters. We really struggled to frame what we wanted without “how we have always done it.”
- Performance culture. A true high-performance organizational culture provides a company with its single greatest source of competitive advantage. This happens when a culture inspires people to go the extra mile–to make and execute good decisions even when nobody's looking. Creating and maintaining such a culture is challenging. Leadership is key but organizations have to be efficient in execution and learning or the great leaders will get frustrated and move on.
- In our remodel, our kitchen and the living room are centered on a 3 meter long island and that my husband calls our Starbucks office. When it is convenient, work just happens. We often find ourselves with laptops blazing even after business hours because it is, well just easy and pleasant. The design of the workspace/kitchen encourages communication, experimentation and just spending time thinking. We don’t feel like we have to isolate in our offices to be productive. Despite the lengthy and costly process of these kinds of changes, they always come to a conclusion. In the case of my house remodel, it was a very worthwhile endeavor.
As for a company re-organizations, don’t miss the chance to create an environment where both employees and customer enjoy coming. What if your re-organization allowed your marketing and sales team run into each other, or operations and accounting sit together in an open space and share having a cuppa? If everyone in your company knew of just one thing that they could do differently to help make someone else more effective, what would that do to your company’s efficiency and moral?