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Posted: August 01, 2011

Let’s reorganize!

AKA, the illusion of progress

Todd Ordal

Do something! This is the feeling that all of us have had in leadership roles - at some point, you're tempted to reorganize to get better results.

Unfortunately, restructuring the company is often seen as a panacea that will solve all current problems. It plays into our desire to control and fix without the heavy lifting (e.g., strategic thinking, identifying expectations, performance management, coaching, etc.). Oh sure, restructuring is painful, but it's relatively quick and allows us a sense of control.

Restructuring is often a shortcut for leadership and a very poor proxy for developing sound strategy. Frequent casting about for a structure that will allow you to finally catch your competition, pump up revenue or stop losses is most often a signal of failed strategy and a leader who is action-oriented but perhaps a bit misguided. The question "How should we be organized to execute our strategy?" is preferable to the statement "We're failing; let's reorganize." Strategy, not failed results, should drive structure.

This quote is often attributed to Petronius (210 B.C.), an arbiter in the court of Nero: "We trained hard ... but it seemed that every time we were beginning to form up into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization."

Reorganizing your team structure and job responsibilities can be very effective in some situations. It is, unfortunately, a blunt tool often only pulled out when the wheels fall off. Three questions to ask yourself before you contemplate shaking up the team: 1) Am I reorganizing to better execute on our strategy or because I really don't have a strategy? 2) Will my customers be better or worse off as a result of this change? 3) What other hard decisions might I be avoiding by reorganizing? (Several years ago, I watched a CEO enact a painful companywide reorganization because he had one bad apple in a senior role that he didn't want to deal with.)

In tough times, it's natural to want to do something quickly, but restructuring often drags down the organization, torments our employees, kills culture and confuses our customers. The next time results are below expectations; think hard about where the problem lies before pulling out the organizational chart and an eraser!

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Todd Ordal is President of Applied Strategy LLC. Todd helps CEOs achieve better financial results, become more effective leaders and sleep easier at night. He speaks, writes, consults and advises on issues of strategy and leadership. Todd is a former CEO and has led teams as large as 7,000. Follow Todd on Twitter here. You can also find Todd at http://www.appliedstrategy.info,  303-527-0417 or todd@appliedstrategy.info

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