During uncertain or rapidly changing times, many businesses consider undergoing a reorganisation. Goals typically include streamlining the business for efficiency, cutting costs, successfully implementing new technology and innovations, and tearing up old processes that limit thinking.
Two-thirds of reorgs produce a level of performance improvement that unlocks value (Harvard Business Review). Done right, a reorganisation can result in a more strategic, forward-thinking approach, with better internal processes and motivated staff who are empowered to optimise their talent in their roles.
But there are cons too, and many factors to take into account: never more so than in the context of the post-pandemic world when businesses also need to consider the impact of The Great Resignation, and engaging new teams and discovering their skills when they’re working remotely.
Even the most well-planned and structured reorganisation involves a great deal of change and upheaval to implement. So what are the advantages of pressing ahead?
Potential pros of a reorg
Gaining a competitive edge
A properly implemented reorganisation can place your company above competitors who are choosing to stay still. A reorg can strategically position your organisation for growth, adding new clients, and expanding into other markets. But it’s worth noting that this competitive edge can only be retained if you continue to make the right changes and are always prepared to innovate. Your initial reorganisation is just the start of an ongoing process. As former Ernst & Young COO, John Ferraro, said: “Every company today is being disrupted and so must frequently reorganise to keep up with the incredible pace of change. Those that can do this well will thrive in the current environment and be tomorrow’s winners.”
Increased employee satisfaction
The initial announcement of a period of big changes can cause alarm or uncertainty amongst employees about what it means for the future of their roles and job security. But a reorg can actually mean smarter working, more effective use of your employees’ talents, and a financially robust business, all of which help with retention. Early, transparent communication is key to getting your employees on board by providing reassurance and driving important changes for your business.
Reduced operational costs
As your business has developed over time, it’s likely that processes may have become inefficient, or that new technology is available which would increase productivity. Simplifying hierarchy and eliminating unnecessary bureaucracy can open lines of communication and remove barriers to productivity. Outsourcing is a popular solution for cost savings as it can often be cheaper than in-house labour. A reorganisation can identify where outsourcing roles can save money, and the key roles that are essential to remain in-house for maximum efficiency.
An agile, future-proof business
For a dynamic business, capable of evolution, you need a flexible approach to your processes, people, tech and strategy. A reorganisation is a great opportunity to problem-solve your company’s weaknesses – such as unbalanced workloads and inefficient processes – and tackle them from the ground up to create a stable, effective framework that enhances overall performance. It’s also a great way of converting your employees to a change mindset, as your business will constantly need to evolve to stay future-proof.
More effective teams
Implementing better communication technology and practices can have a huge impact on your teams. From building strong relationships between colleagues and enhancing your culture, to helping cross-team groups work together efficiently.
Potential cons of a reorg
When you say ‘reorganisation’ employees hear ‘redundancies’
Regardless of the actual strategy behind your reorg, many employees – due to previous experiences and general perceptions of reorganisations – will immediately think of job losses. This could include some of your most highly skilled, valued workers who may respond by getting new jobs. Transparent communication is crucial so that employees aren’t reading between the lines and rumours don’t spread. Rumours can undermine the valuable motivation behind your reorganisation and significantly lower staff morale and productivity.
Temporary reduction in productivity
As new processes and technology are implemented, and employees adjust to the new demands and challenges of their roles, you may see a drop in productivity. The communication of your aims in the reorganisation is essential. You need to see the whole process through in a smart, swift way, not allowing any initial negative employee reactions to derail it. It’s natural that the instinctive response could be quite resistant and unenthusiastic: clearly communicating the positives of the reorg and putting a strong emphasis on the benefits employees are going to directly experience will help.
Cash flow issues
A half-hearted reorganisation stands little chance of success. So it pays to assess very carefully whether you’ve got the funds to implement your reorganisation properly. Don’t undertake your reorg until you have this in place.
Siloed teams who are not aligned with your strategy
If, like many companies, you have siloed teams in your organisation, they may not be aligned with wider company strategy, focusing instead on the concerns of their own team. They could view changes that come as part of the reorg as obstructive to their traditional way of operating, and may not be on board to help make it happen. A reorg that is purely dictated from the top is less likely to be successful – certainly in terms of employee satisfaction and productivity. You need everyone to be on board, with a clear understanding of the aims and benefits of the reorg – particularly how it will benefit people on those teams themselves.
How Kalido can help
Kalido is an ideal solution for the key factors of a successful reorganisation.
Single source collaboration
Kalido has all the tools you need on one platform to make clear, transparent communication easy. The versatile chat function on Kalido means that conversations can include your entire organisation, or be segmented on demand. As well as communicating key messages about the reorganisation, the chat function means your employees can support each other directly, and build communities based on shared interests. It’s also a seamless way to incorporate people in newly outsourced roles to your company communications and make them feel like a properly integrated part of your business.
Powerful alumni networks
Creating an alumni network on Kalido is a natural extension of your internal talent marketplace. You can harness your attrition rate by keeping in touch with people who have valuable skills and connections. It also lets you build long-term value through recommendations from your alumni, and introductions to useful people and organisations.
Optimised internal talent
Do you truly know the skills that you have internally? Or are you making unnecessary extra hires? Do you have the right people in the right roles? A reorg can help with all of these things. And so can Kalido, which has been designed to transform a structured command and control approach into a liquid, agile workforce. Our powerful AI can revolutionise your internal recruitment and deployment through matching employees to the right teams, projects and roles, fast.
In fact, with the right talent in the right roles leading to greater productivity, higher employee satisfaction and an agile, robust business, you might need to ask if there’s any need to do a full company reorganisation at all?