Corporate Restructuring: Musical Chairs, Anyone?

Ron Ashkenas says that reorganisation or corporate restructuring is often perceived as musical chairs by people in the workplace, with the end result being less people!

People fear the words restructure or reorganisation. I like the analogy Ron Ashkenas uses when he says that reorganisation or corporate restructuring is often perceived as musical chairs by people in the workplace, with the end result being less people! Employees rightfully fear that this implication, combined with the loss of key talent, will make getting the job done a whole lot harder.

However, there are other undesirable side effects of a corporate restructure.

Whenever the organisation is restructured it disrupts the existing relationships, informal networks and levels of trust with managers which then take time to rebuild within the new structure.

According to a Right Management global study there are some foundational elements that in combination, deliver sustainable business results. I concur with their findings that these elements include:

• A “fit for purpose” structure;
• People systems and processes that drive the right behaviours;
• Capable leadership; and
• A positive culture and values set.

Looking at structure in isolation is only seeing part of the organisational effectiveness equation. How can leaders avoid this trap?

Ron Ashkenas suggests two insightful questions for leaders who are considering reorganising:

1. What is the problem you are trying to solve?

Undertaking some diagnostics to discover the root causes of problems will bring clarity to why reorganisation may (or may not) be feasible.

2. Is reorganisation the only possible solution?

As I pointed out above, structure alone will not yield the business results you seek. A solution-oriented rather than single-dimension approach needs to be considered.

I am interested in hearing what impact continual reorganisation or restructure has on productivity and employee engagement in your workplace?

Bev Frowen
Senior Associate

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