Chop chop when will the restructure stop?!

IMG_8911 copy.jpgIt seems that almost every day the Australian Financial Review is reporting on a major Company reorganisation with each newly appointed CEO routinely restructuring the organisation on the way in and then again after a few years.

In Australia this problem is exacerbated with the average CEO tenure now below 5 years and 30% of CEO’s in the top 200 fail to last 3 years. As a result you can see how some organisations restructure every year.

The conflicting structural thesis to centralise for cost control or decentralise for speed of decision making, to be customer centric or product centric, manage with a disruptive business environment or manage efficiently within a stable environment or my favourite “to break down silos” are often used to justify a major change. Unfortunately most (two thirds based on Bain & Co study) fail to deliver any meaningful result.

Should the Board be concerned about this trend? They most certainly should be very, very concerned. The damage caused can be very difficult to repair and include:

  • Protracted distraction of employees as they jockey for position. They are not focused on the customer, market and competitor.
  • Breaking and reforming of operational bonds within the organisation means it can take up to 18 months to settle down into a fully functioning operational rhythm.
  • Weak handover protocols mean that important controls are broken and corporate knowledge is permanently lost. This can manifest itself in significant audit items being raised.
  • Learning energy is spent patching the organisation back together rather than the higher value work of improving service, product etc.
  • Scarce financial capital is consumed for no return.
  • Employee engagement crashes with focus on self-preservation and self-interest. This can become a long term problem rather than a transitional one (as it is often reported).

If a restructure happens once no big deal (as long as it is a true solution to a well understood problem) but if it happens often organisations are unlikely to get better they just get different.

Boards and their executive team are better served by focusing their energy on:

  1. CEO and Executive talent development to reduce disruption of leadership changeover
  2. Coherent and ongoing strategy development and execution rather than lurching from one position to anonther.
  3. Clarity of team and individual purpose to achieve better alignment
  4. Building and maintaining a deep learning, collaborative and performance culture so each employee is able to deal with whatever is thrown at them.
  5. Sufficient flexibility in the performance management framework to support the “best decision in the moment” rather than a fixed set of objectives.
  6. Internal protocols that are fit for the conditions.
  7. Replacing people when needed rather than “restructuring them out” retaining a stable organisation structure.
  8. Create effective metrics and board reporting to ensure the 7 items above being actively achieved.

In summary, organisation restructuring is a lever that should be used sparingly as the damage it causes often exceeds the problem purported to be solved. Focus on the conditions within the organisation are more likely to yield performance results.

Advertisements
Chop chop when will the restructure stop?!

Protect your PURPOSE in a CI transformation

IMG_3691 copyHave you ever led a Continuous Improvement transformation (CI), achieved considerable early success only to see it go off track and fail? If not then you haven’t lived!

From my experience there are 4 categories of causes:

  1. The intervention team lost sight of its purpose and therefore shifted its posture
  2. The intervention team failed to morph as the organisation developed its CI abilities
  3. Executive interest was lost or lost the executive.
  4. The sustaining systems of the organisation were not treated to effectively support the CI transformation.

In this article I will be dealing with the intervention team losing sight of its purpose.

If the organisation is shooting for true CI then the intervention team’s purpose is likely to be something like:

“To be the catalyst, coach and mentor to initiate and embed CI in the organisation so that it delivers the required business value in a self-sustaining way”

After intervening in  about 3 locations  the team will see a few patterns emerging and an opportunity to make changes to the approach. This, of course, should be encouraged. We should all be seeking to find better ways. The problem starts when those changes are inconsistent with the purpose of the intervention (purpose drift).

By way of example. The training modules for a particular program were designed to be a deep discovery and learning experience. This enabled participants to gain a better appreciation and integration of the learning into their daily work practices. This was consistent with the purpose and the learning posture of that intervention. It was very successful.

After the 3 cycles it was decided to simplify the approach to save time and codify the training into detailed manuals so that a general trainer could recite the material. This saved time and cost of implementation (or so they thought). What occurred here was a drift in purpose away from being a catalyst to embed an improvement system to being an efficient delivery of information. A significant part of the learning posture was lost and the meaning of that training diminished. The recovery work to achieve a successful implementation far exceeded any perceived time and cost saving in the training.

Things to consider to prevent Purpose Drift:

  1. Will the change being considered further the purpose or compromise it?
  2. Be alert to attempts to be more efficient in delivery at the expense of effectiveness of take up.
  3. Each “client” assignment must start where the client is at not where the intervention team has evolved to.
  4. Don’t get too smart. What you have learnt may be perceived as arrogant and damage the long term goal.
  5. Avoid the complacency of success. You should remain as alert and attentive in your next assignment as the first. You owe it to your new client team.

 

In summary, protect your purpose and hold your learning posture. To do otherwise will result in an intervention team that is mechanistic rather than a catalyst for transformation.

Protect your PURPOSE in a CI transformation