Companies should view reorganization as a routine practice essential to remain competitive and keep pace with technological change and disruption. Reorganization doesn’t have to be an overwhelming undertaking, and, in fact, it can be quite rewarding for a company and its employees—especially if approached in a methodical way. Companies should think about and execute reorganizations to become much more agile and to set themselves up for success in the face of disruption.
Reorganization can be a scary word for people at any level of a company, whether you’re an executive or a manager or an employee. But some see reorganization as a necessary evil. Reorganization is a way of life in today’s corporate environment. There’s unprecedented disruption in the way that companies are working with higher requirements for things like analytics, consumer touchpoints, and complex and remote work.
There used to be a joke at IBM that the company acronym stood for “I’m By Myself.” The software giant was once a model for telecommuting, saving significant operational costs by allowing many employees to work from home. But IBM recently gave thousands of its remote employees an ultimatum: Return to the office or find a new job.
Remote work policies were developed for practical reasons. Working remotely is a relatively new concept that didn’t take hold easily. The traditional office structure called for bodies in chairs to promote a sense of productivity.
The initial problem always was that many people on the management side assumed that if they weren’t watching you, you weren’t working. Even when it might have made perfect sense for people to work away from the office, they didn’t want you to do it because they figured you were just goofing around.
There’s also a really big shift in the underlying demographics and expectations of the workforce. Most companies these days are conducting a pretty big reorganization every couple of years, and some companies have actually stopped viewing it as an event in and of itself. Instead they’ve started to view it as part of how they evolve and do business. There are big benefits to reexamining the way you organize to get work done beyond just cost savings. There are ways to free up resources to invest in new capabilities and make things faster and more agile.
We’re seeing—because of the pace of change in the market and a lot of turbulence caused by globalization, technology, hypercompetition, mergers and acquisitions, and regulation and deregulation—it’s getting harder and harder to stay competitive if you don’t reorganize fairly frequently. Some companies do continue to see it as a necessary evil because every time they reorganize, it’s superdisruptive.
Many companies experience not only a lot of distraction and disruption but also, in the end, after all that work, they feel like they didn’t get all the objectives out of the reorganization that they had hoped for. The success rate is actually pretty low.
Only about a quarter of reorganizations are deemed successful by the companies as they look back on them. Of the unsuccessful reorganizations, most of the failed attempts actually unwound a number of the changes they had made because they weren’t working. A lot of this is because they’re doing it wrong. The fear of doing a reorganization actually contributes to the problem. Many of these companies are waiting until the problem is so dire and so urgent that they can’t possibly wait anymore.
Then they’re just dealing with the fires and the problems that are such a burning platform that, by the time they’re done, they’ve missed a number of opportunities right in front of them. One of the biggest success factors that we’ve seen is design for the future. Design for where you’re headed, not for the problems of the past. You need to fix the problems, of course. But if you only fix the problems, by the time you’re done with your reorganization, you’ll already need to be doing another one.
The switch to telecommuting began with the growth of Silicon Valley, where California’s notorious traffic meant workers spent a lot of wasted time sitting behind the wheel. Executives realized that if they let workers stay home, they could recapture lost time and boost productivity while saving money on office space.
Ironically, it was Silicon Valley that first began pushing back against the idea of working remotely. Google, for example, is known for offering generous employee perks such as catered dinners and in-house child care.
The initial problem always was that many people on the management side assumed that if they weren’t watching you, you weren’t working. The point of that was to keep people at work. The reason you could bring your dog to work was so that you don’t have to go home and let her out and feed her.
Yahoo CEO Marissa Mayer also made headlines when she ended the company’s remote work policy in 2013. The problem here was really this kind of one-size-fits-all thinking. Is it a good thing or a bad thing? The answer is, it depends.
Some of the things that you might change in your organization would be under any circumstances pretty massively disruptive. But there are a lot of other things that don’t need to be disruptive, that can feel fluid. A natural evolution like this is just part of working differently and better, and for the people who have to change some aspect of how they work, it doesn’t feel that different. So getting this basic platform right, of the stable things that won’t need to change that often, getting that right can make all the other changes a lot easier. The analogy I often use is a smartphone. If you were to try to hard wire in every possible capability, what you’d end up doing is saying, “I need my smartphone to have every possible functionality and capability built into the hardware and operating system.”
Even if you got it exactly right—you might get your brand-new smartphone and it does everything you ever dreamed you wanted it to do—then two weeks later, Shannon comes up to me and says, “Hey, did you hear about this thing called Uber? It’s awesome. I just say I want a car, and somebody comes and picks me up. It’s great.”
And I say, “I want Uber.” Now that I’ve hard wired everything into the smartphone, I have to design a whole new phone if I want that functionality. Whereas a smartphone that’s left huge areas of functionality completely blank, open, to be designed, to be determined for the future, there’s still a platform. There’s still hardware and an operating system that doesn’t change very frequently. But now I can just download the app. And it’s not hard. It doesn’t feel disruptive at all. It feels great. I download an app and then I can just start using it. Organizations need to start building themselves like that. The minimum spec hardware and operating system on which I can apply dynamic capabilities. In some ways, a natural fluid reorganization would be deleting one app and adding a new one.
Folks are rightly so protective of making sure that they don’t make big cuts or shake things up in what are the core growth-driving and revenue-driving areas of the business. Oftentimes those areas of the business have gotten a bit of a free pass when you’re looking at organizational change, because people are fearful of rocking the boat. Because the pace of change has been so fast in business and in the consumer and retail sectors specifically, a lot has changed for those functions. They’re feeling overburdened and overworked and probably not as effective as they should be on some of the newer areas and new capabilities.
Leaders naturally equate the size of their empire with how much power and decision authority they should have, and the size of their empire is often based on historic success. When you ask people where they want to allocate resources, they usually want to allocate them back to themselves. The person in the new business that’s still small—it’s where all the growth opportunity is, where all the innovation is, where in the next five years the whole market is going to go. Even if you can see it coming, even if you had a crystal ball and you knew that, it would be very hard in a current organization that isn’t playing by the new rules. If they’re playing by the old rules, even if they knew, they would have a hard time getting resources because all the authority to make decisions about resources sits where the resources already are.
That is what can be so powerful about undertaking a holistic look at your organization. When you do take those cross-functional, cross-business-unit lenses, you can make those shifts, and it can be an incredible moment for an organization to line up with where the puck is going. It also helps to be aware of some of the conventions and orthodoxies that you are carrying with you. Companies don’t always have the self-awareness of what their own biases are. Most of those biases are toward what’s made them successful historically.
These are the companies that, if they can’t get past that, rather than disrupt themselves and continue to be at the top of their game, they’re going to be disrupted by somebody else. This has happened; this isn’t new. It’s just becoming a bigger problem as the pace of change accelerates.
One way to come up with ideas, whether they’re good ideas or bad ideas, is to look around you, look at what competitors are doing. Everyone loves to hate on benchmarks, and I can understand where that comes from. There are people who have deep scars from watching benchmarks get misused and from trying to compare one company to another in a way that they aren’t similar.
The broader point is, get data and information and case examples and anecdotes and benchmarks. Get all that to inform your thinking, to open your thinking, to ask the right questions. But don’t let the benchmark make the decision. Don’t look at a best practice and feel like you should copy it just because somebody said it was a best practice. Use it to inspire you, inform you, educate you.
A problem-solving meeting should have a small team of people doing real work. You should never have a problem-solving meeting that’s more than six to ten people. If it’s a decision-making meeting, you need to make sure that you’re spending almost all your time debating and discussing the decision. It’s important not only to list the decisions you’re making but also to list who the decision makers are, because it should almost never be everyone in the room.
It’s OK to have 30 people in the room, but you shouldn’t have 30 decision makers. You shouldn’t even have ten decision makers. You should have two or three. Everyone else in the room is either there to inform them and advise them, or just to hear the discussion because they’re going to have to go execute it and it’s a lot more efficient to not have to translate.
If you have three decision makers, all three better show up, and if they don’t, you should cancel the meeting. If they feel like they don’t need a meeting to make the decision, then cancel the meeting. This sounds very basic, but almost nobody does this.
Ask someone what their job is, what value they deliver. Let’s say they work on an important report that comes out every week—who uses the report, how do they use it, and what would the problem be if suddenly we weren’t able to deliver the report. They should be able to answer. If it were me, and I were doing management by walking around, I would ask, “Who is the one person who most benefits from your report?” Then I would go talk to that person, ask them, and see if the answers match. I have had situations where I’ve asked that question, and the person says, “This report is great; it delivers a ton of value.” And I’ve had situations where the person says, “I delete that every time I get it; I never read that report.”
The reason Office Space is so funny and such a cult classic is because it is so true in so many ways. You’ve probably had many Dilbert moments, where you just can’t believe what you’re seeing. But it’s true. This stuff really happens. They’re often really good, smart people. These are things that evolve slowly over time, and things just get disconnected. It just ends up in a place that’s kind of crazy. You don’t know how this happened.
For companies that have been reorganizing poorly for a long time, haven’t followed any of these rules, fundamentally don’t have clear roles, and have a bunch of problems—usually the first one is somewhat painful, or at least hard. I don’t know if painful is the right word, it’s hard. If you get it right once, you can start allowing your organization to reorganize more incrementally, fluidly, and easily in a way that’s not painful and not even hard.
It’s actually quite easy and natural. But if your starting point is really bad, then the first one usually is somewhat of a heavy lift. To go back to this idea, once you get it right the first time and have built that stable backbone upon which you can then overlay much more fluid and dynamic capabilities: is this a place you would recommend for someone else to work, is it easy to get things done, how energized are you to come into work every day.
The whole feeling of a place when the answer is, “It is easy to get things done, and I love being at work. I’m hugely energized when I’m here. I would totally recommend this place”—there is a buzz and an electricity that’s pretty remarkable and pretty special. If you get the reorganization right, you can help it to feel that way.
It’s hard to do an effective reorganization without at least some moments of pain. Typically, what you’re trying to do is change the way the organization works. An organization is a bunch of people who have feelings, right? And legacies. No pain, no gain is probably more apropos for me, rather than when folks avoid painful decisions—they usually just prolong it, or drag out the agony. That said, I think you can manage it in a humane way.
If you do a good job, you might have some pain in the beginning associated with change. Most people still don’t love change, but you emerge on the other side with an organization that is happier and has less pain than it started with.
IBM canceled its remote work policy for the sake of innovation. IBM is switching to a business methodology known as agile management, which necessitates the end of telecommuting. Agile management emphasizes highly flexible cooperation, face-to-face communication and daily interaction as keys to fostering innovation.
IBM has invested in is an alternative way of doing projects that involves collaboration, where the idea is you really need people together in order for this to work. That doesn’t mean it doesn’t make sense for other people in other organizations to work from home. The boundaries on that are always changing.
Medicine and plumbing, for example, were fields once thought of as strictly hands-on. A plumber couldn’t unclog a sink remotely any more than a doctor could listen to a patient’s heartbeat over the phone. But advancing technology has changed that. Now, a plumber or a doctor can videoconference with a client to help solve certain problems.
IBM is embracing agile project management because there is a mountain of evidence that shows traditional methods are ineffective. The old way of project management was very top-down. Managers handed a group of employees a specific directive, a set budget and a fast deadline. Under agile project management, the parameters are far more flexible and teams are self-regulating.
Yes, but what about fairness? With its global reach and reputation, IBM’s change of heart about working remotely is likely to tip off a trend of follow the leader. Most companies are very nervous doing things they feel are out of step with everybody else. For a long time, the way to get ahead in the corporate world was just to copy what other big companies or leading companies were doing, and that looked like you were doing best practices. But best practices around working from home are all over the map, which makes it harder for companies to determine what works for them.
A harder problem to solve is the question of fairness. Within any company are jobs that lend themselves to working remotely, and jobs that don’t. So, how do you create parity for those distinct groups? Most companies have had historically a one-size-fits-all model of managing people. We’ve got policies for everybody, and we want to treat everybody equally because we’re all in this together. How are you going to manage to treat two different groups of employees differently when your whole organization has been based around treating everybody the same? Actually, a lot of employment law is based on that.
It’s unclear whether the policy change will reap greater profits. It’s tough to ascertain how IBM’s change will affect the company’s bottom line. The evidence correlating profits to telecommuting is never clear, so those in the C-suite will have to make educated guesses.
But one thing is clear: A number of IBM remote employees are trying to figure out how to rearrange their lives in order to return to the office. Many may not find it feasible and will search for work elsewhere. In fairness to the company, they aren’t doing what a lot of companies did, which is just firing everybody and bringing new people in. IBM has been pretty good about finding innovative ways to hang on to their employees. The takeaway is IBM’s shift in methodology, not workplace policy.
Most of us are busy at work, busy in our social lives and – sometimes – too busy to even get a good night’s sleep. The amount of sleep the average person logs each night has been steadily decreasing over the past century, with the average American now getting just six-and-a-half hours sleep a night during a typical five-day work week. Chances are that you fall into this average, and find yourself feeling stressed at least some of the time as a direct result of the pressures of time and the amount you have to do.
48% of Americans say stress has a negative impact on both their personal and professional lives. Additionally, 42% admit to not doing enough to manage their stress, while a worrying 20% of Americans say they never engage in activity to help relieve the stress they experience. However, studies show that taking just 15 minutes each day to mindfully meditate can help subdue rising stress and anxiety, and the good news is that it’s easy enough to practice it at work.
Maybe you think that you absolutely don’t have time to meditate at work, or maybe you’re sceptic of the benefits of mindfully meditating for such a short space of time in the midst of your busy office environment. But, no matter how busy you are, making time for meditation will have a positive impact on both your productivity levels and your happiness. You can begin by practicing the art of mindful drinking with your water, before learning how to complete a ten-minute body scan at your desk, which is designed to enable you to effectively get in touch with your body, let go of demands, and release pent-up emotions.
The idea of having to work back in the office is the tip of the iceberg. It’s just a manifestation of bigger change. Agile management isn’t a revolutionary piece of technology but an idea, an operational value system. It has a proven track record for innovation. However, it could have an unintended cost when it comes to the quality of life for employees.
The old approach of doing projects was quite predictable, and it made your life as an employee or as a manager overseeing it much more predictable. Now, if the process is unpredictable and you’re a manager trying to watch this thing, and you’ve got the finance guys still pestering you for the same level of accountability, and you’ve got employees who can’t organize their life around the agile product development cycle, what’s going to happen? What we know in the past is that family has yielded to corporate demands, and those demands are likely to become more unpredictable as we move down the pike.