Leading through a restructure: a practical guide to weathering the storm

You’ve likely seen the stats: the vast majority of restructures fail to deliver the expected value and some will be highly damaging.   Whilst the research base of such claims (McKinsey asking a bunch of executives) is dubious, it cannot be denied that there is a human cost – and therefore a broader organisational impact – to reorganising teams.

Those of us who have been through restructures, helped lead them, or witnessed them from the side, would struggle to deny the following:

  • The goal of an organisation redesign may be hard to get behind (e.g. a leader ‘putting their stamp’ on the organisation or a Board seeking to drain cost)
  • They’re often done too casually
  • The broader uncertainty driven by the process can stifle business decision-making
  • The long-term cost can be lost productivity and cynicism

A lot of literature focuses on how individual employees can deal with the emotional side of being subject to a reorganisation.  Whilst this is valuable, it is pointed at those who have limited control – and are merely being asked to ride out the change curve.  

Much of that directed at leaders includes broad advice about offering empowerment and support, fostering collaboration, showing empathy and compassion.  We wanted to add to this with something really practical.  So, if you’re a leader who is initiating organisation design (or being asked to), here are some principles that might help.

Principle 1: Choose wisely.  Even if they’re well run, restructures can be damaging

Recent academic research on repetitive reorganisations, uncertainty and change fatigue has highlighted the long shadow of restructures.  This study within a major UK bank showed that people’s reaction to organisational redesigns is driven less by their own perception of whether prior ones have succeeded, but rather by the number of prior reorganisations they have personally experienced and the impact of these changes on their workload and sense of certainty.  In other words, it matters more to employees that previous restructures happened at all than whether they actually worked.

Whilst leaders are often aware of (and accept) the temporary transition cost, the inherent and lasting negative impact on employees can often be underplayed.  The data suggests that “each time you plan a new major organizational change, change fatigue among personnel increases, resulting in decreasing chances of success”.

This speaks to the long-term structural cost of reorganisation. The first principle of leading through a restructure should be to weigh up your expected gains against the broader impact of the change on workload and uncertainty, and be prepared to minimise this through communication and participation throughout the process and beyond.  Better yet, taking a continuous improvement approach to your team set up (regular retrospectives, tweaks in ways of working or role clarity) can help you to avoid the ‘big bang’ of a wholescale reorganisation.

Principle 2: Proceed with care.  Organisation design is an emotional process

Although most end-to-end restructures will be steeped in strategy, business language and PowerPoint, organisation design is a deeply psychological exercise.  To bring this to life, we can take a look at David Rock’s SCARF model. This identified five social domains that are key drivers of human behaviour, which are:

  • Status: How you see yourself and how others see you.
  • Certainty: How confident you can be of the future.
  • Autonomy: How much control you have over your life.
  • Relatedness: How connected you feel to others.
  • Fairness: How reasonable you feel decisions involving you have been.

According to Rock’s research, these domains activate the same threat and reward responses in our brain that we rely on for physical survival.

It’s clear that all these hardwired needs might be triggered in an organisation design process.  During a restructure, many people may become less concerned about doing a good job than showing that they are doing an essential job.    They may be wondering: Will this change affect my role? When will I know the outcome? Can I influence the change?  Am I being included in the decisions?  Does the impact on myself and my colleagues feel reasonable?    

The stress, fear or anxiety that are driven by such questions can trigger an overwhelming or disproportionate response to a stimuli, in which the feeling brain takes over the thinking brain.  So, be conscious of how your teams might be feeling and do not assume that they can be dragged through a change curve with just a little more persuasion.  The guide below (click to download) might help you to navigate this.

Finally, when involving or communicating with your teams, appealing to the ‘logic’ behind the restructure will do little to bring people with you. Try speak to the emotional side of the change by sharing what has motivated you personally or how you hope work will feel differently off the back of it.

NeedWhat to doWhat to say
Status Our relative importance to others– Be mindful of people’s sense of personal worth
– Provide opportunities for individuals to shine
– Communicate with positivity
– Involve people in decision making
– “I’d love your perspective on this”
– “What holds you back from doing your best work in this team?”
Certainty Our ability to predict the future– Own what you do and don’t know
– Paint a picture of what the future holds
– Provide clear and honest communication
– “I don’t have all the answers right now, but what I can say is…”
– “This is what I’m hoping to achieve”. 
– “This is when you’ll hear next from me about this”
– “My next steps are…”
Autonomy Our sense of control– Allow people choices and decision-making rights
– Be clear about day to day accountability – what is / isn’t impacted
– “What this does not change is….”
– “What I need your input on is this…”  
Relatedness Our sense of safety with others– Help connect your team throughout the process
– Bring diversity of thought to the process
– Maintain regular 1:1s and social events
– “How are you feeling at work?”
– “This process is hard on us all.  Lets go and have some fun”    
Fairness How we perceive exchanges between people to be– Provide clear expectations and ground rules
– Be mindful of fairness and equity in your decision-making (e.g. around who to involve)
– Allow groups to create their own rules
– “Whilst I’ll make the final decisions, I want to hear from everyone”
– “Here’s what we need to achieve – help me figure out how”
– “What might be my own blindspots here…?”

Principle 3: Be realistic.  Restructures alone can solve very little.

Unfortunately, most reorganisations end in a great fanfare of announcements, once someone has figured out how to move a­­­ctivity, roles and people around.   But when it comes to improving team outcomes, this is really when the work starts.   As we’ve shared before, however well-intentioned your new org chart is, it will not stand alone as the basis on which work gets done in future (does anyone use their job description or org chart to help them navigate their jobs these days?).   

To make a meaningful impact in your team performance, you need to go through the hard yards to actually make change happen.  This means working to improve the nature of your team’s interactions, getting clear on how people meet and come together to get work done, or refining how decisions should flow between teams or roles.   You’ll also need to be clear about the behaviours that will underpin working in the new way, and be explicit about this expectation.

After all, implementation is where the value lies.  As you progress, you should be spearheading opportunities to test and learn, giving the space for your teams to spot any teething problems and develop appropriate solutions.   Whilst the end result should be broadly in line with your original goal, it’s unlikely to operate exactly as you imagined in practice.

So, don’t expect too much from a new structure alone.  Take the opportunity to reset on the way you lead, how your team works and what it feels like to be in it.

About Kindred

Need some help…? Changing how an organisation works isn’t easy. Sometimes you know what needs to be different, but don’t know how to make it happen.   Kindred helps leaders and teams to get unstuck by designing the structures, developing the practices and nurturing the mindsets for people to do their best work.

Share this article