Organizational Change

A large portion of my research has been focused on what happens to a company and its employees when the leadership all of a sudden decides to implement a reorg and change the fundamental structure of the organization.  Why does leadership choose to implement a matrix structure?  How do they go about preparing for such a massive shift in dynamics?  Well, I have found that normally, these types of changes at companies usually get short changed by the leadership.  Surprisingly, these changes are often based on a leader’s past experience.  If a CEO has had a good experience at company X with a matrixed structure, then they will bring that experience with them to company Y and start lobbying for the same organizational structure to be implemented at company Y, even though company Y may be half the size of company X and it doesn’t make any sense to invest in the change a this particular time.

 Ron Ashkenas recently blogged about the challenges of organizational change.  He mentioned that leaders first inclination when sales drop or performance is not what it should be is to implement a reorg and shift people around.  Ron advocates looking at the existing organization and working within the current structure.   I’ve been at a few companies where the leadership gets spooked and they do not even conduct cursory analysis to see if the managers were setting realistic goals for their departments or teams.

This leads to making sure that your organizational structure is aligned with the company’s strategy.  In this day and age, corporate strategies are changing rapidly.  It is management and leaderships responsibility to keep the organization moving forward and anticipate those changes.  It is even more important for leadership to conduct a thorough analysis before investing resources in a poorly thought out change plan.

Leaders can end up wasting more money executing a poorly thought out organizational change than they would have saved just by thinking about the organization’s goals and objectives and aligning their underlying strategies with the goals and objectives.  Changing the company’s organizational structure is not a panacea for all that ails and leaders need to start realizing that planning and analysis is key to establishing the ground work for a successful change.