Why NOW is the Best Time to do an Organizational Structure Change

05/27/2020

Last Updated on October 6, 2022

When in a crisis or time of exponential change, a company has two directions it can go:

Stay status quo – panic and make irrational decisions; or,

Create an impetus for change – listen, think, and reinvent.

The best time to do an organizational structure change to ensure it aligns with your overall strategy is during a time of great change—which is the case for many companies right now.

With the COVID-19 outbreak, every company has been affected to some degree—some have shut their doors, some have turned to employee layoffs or furloughs, and many have had to eliminate discretionary spending. Others have experienced the opposite effect and are working to keep up with increased demand.

The common scenario for all businesses is that each has had to adapt and change to some degree the way in which they operate—others better than some. As I have said to many of my clients and team members over the years, “dysfunction creates opportunity.”

Let’s be honest, every company is in some form of dysfunction now and most do not like to change. However, now is the time to transform your organizational structure to effectively and efficiently operate in the days, weeks, months and years ahead in this “new normal.”

So what can your company be doing now to kickstart an organizational structure redesign and be one step ahead of the competition?

Create the Urgency

When I ask an executive “Why are you changing”, I get many answers. “We need to cut costs” or “We need to be more efficient.” Sure, these answers are usually true, but they do not pinpoint the “why” behind their need to change.

As change guru John Kotter highlights in his 8-Step Process for Leading Change, successful companies create a sense of urgency statement “that communicates the importance of acting immediately.” The urgency could be centered around customer retention, revenue loss, or even regulatory measures. As mentioned by leading change expert, Daryl Conner, in his book, Managing at the Speed of Change, developing a burning platform is a critical component to highlight the urgency. Start with identifying the real problem and the “why” of the change, then understand the organizational pain points and begin to develop value propositions across departments to anchor to.

An ideal time to review the current state of your organizational structure to ensure it aligns with your overall strategy is during a time of great change.

Reach for the Stars (You Already Have)

Assess your existing talent by developing a simple, yet effective criteria-driven process enabling you to navigate and find the best leaders focused on accomplishing your future-state organizational goals.

Align this selection process to strategic business objectives, company drivers, and business (the “what”) and cultural (the “how”) results-driven employee behaviors. In the season of sports drafts like the NFL and NBA Drafts, use this as your draft board when selecting your “dream team.”

Flatten the Curve…sort of

Look at your span of control across your organization. Identify the number of 1:1 and 1:2 reporting relationship ratios (manager to number of subordinate(s)) and challenge yourself if they all need to be there. Moving to a wider span of control will provide managers opportunities and autonomy to be more productive, innovative, decisive, and shift their focus to more strategic endeavors. Start small by increasing span across your strongest leaders, thus rewarding them.

Don’t Hire for Need. Do Hire the Best.

As companies grow and improve their organizational structure, recruiting remains a critical component. Companies at times focus on quantity (resumes and skills ONLY) versus quality (resume, skills, behaviors, and fit) of candidates.

Assess your recruiting practices to ensure candidate identification, upfront screening, and interview processes are aligned with your short- and long-term vision. By increasing the number of employees at all levels that touch the recruiting process, you will have more data to fill in “rockstars” and will structure that perfect organization.

Measure Organizational Performance

When organizations are transformed with “dream teams” in place, it is important to create goals and incentives for employees and departments to ensure your organization remains flat yet highly productive.

Determine what is most important to measure: How well is the department managing span of control? How has the investment of your organizational effectiveness change returned financially year over year? Use these measures to ensure changes stick and accountability is created across all departments.

I will leave you with this—when watching the White House Coronavirus Task Force press conference on April 8, 2020 provide an update to Americans regarding the COVID-19 situation, the now famous Dr. Deborah Birx addressed viewers about the importance of behavioral change. To paraphrase, she said, “It is important to point out how important behavioral change is and how amazing Americans are at adapting to those changes.”

To be frank, everyone in the world has had to change behavior to get through such an unprecedented crisis. What a better trigger for companies to change as well and use this time as a call to action. Listen to your doctor!

By Jeff Schar

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Everyone in the world has had to change behavior to get through such an unprecedented crisis. What a better trigger for companies to change as well and use this time as a call to action.