OVERVIEW
We trained hard. But is seemed that every
time we were beginning to form into teams, we would be reorganised. I was to
learn later in life that we tend to meet any new situation by reorganising. And
what a wonderful method it can be for creating the illusion of progress while
producing confusion, inefficiency, and demoralisation.
Gaius Petronius Arbiter, The Satyricon, 1st century
AD
These words spoken two millennia ago might be very familiar to
some of you. They certainly are to us, and we believe they are as insightful now
as they were then. However, even though these words have been much quoted,
organizations do not necessarily take any notice of them!
Although some managers are now getting this process right, most
people’s experience of restructuring is negative. People often roll their eyes
and say ‘Not again’, ‘It failed’, ‘Why didn’t they manage it better?’, and ‘Why
can’t they leave us to just get on with the job?’
Restructuring as a theme for change might seem a little strange
because restructuring as a key strategic objective is not particularly
meaningful. Surely we should be looking at the reasons behind the change. There
are a number of important points here:
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It seems that restructuring becomes the solution to a
variety of organizational issues, and in that sense we need to look at the
restructuring process itself as it impacts on so many people’s lives.
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Given that managers and staff are restructured so often, it
is important to understand the dynamics of restructuring, what typically goes
wrong and what a good process looks like.
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In our view restructuring should be the last option
considered by management rather than the first option. It is often a method for
not addressing the organizational issues that it seeks to resolve.
This chapter looks at:
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the reasons for restructuring;
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the restructuring processes:
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strategic review and reasons for change;
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critical success factors, design options and risk
assessment;
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learnings from previous projects and best practice;
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project planning and project implementation;
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monitoring and review;
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restructuring from an individual change perspective – the
special case of redundancy;
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enabling teams to address organizational
change.
In the UK the Chartered Institute of Personnel and Development
(CIPD) is running an ongoing research project ‘Organising for Success in the
21st century’ (www.cipd.org.uk) looking at current and future themes of
restructuring in organizations today. It stresses the importance to companies of
this process:
[W]hen DuPont announced its reorganisation in February 2002,
its stock price rose 12%, putting a valuation on the new organisation design of
$7 billion (4.5 billion). Less fortunate was the reception of Proctor and
Gamble’s … launched in 1999 by the company’s new
chief executive, Durk Jager, this reorganisation had a $1.9 billion (1.2
billion) budget over six years. Within 18 months, the perceived difficulties
… had cost Jager his job.
On a macro level, the survey found that during the 1990s the
top 50 UK companies moved from having on average one major reorganization every
five years to having one every three years.
On a micro level, individual managers had personally experienced seven
reorganizations within their organizations. Not all of the seven were major
organization-wide change, some were more local. Nonetheless managers encountered
various challenges as a result: managing the changes within themselves, managing
the changes within their staff, ensuring that both large-scale and minor changes
were aligned to the wider organizational strategies, and last but by no means
least, delivering on business as usual and ensuring staff were motivated to
deliver on business as usual.