Reorganization is the drug of choice in many workplaces, and it isn't hard to see why. Take an organization of people, put someone in a leadership position, and introduce a confusing, far-reaching, ill-defined problem. The leader, feeling the need to live up to his or her title, quickly realizes that the problem is bigger than any one person. If the problem arose in the current state of things, a new future state is needed to solve it. After all, it was Albert Einstein who said that "we cannot solve our problems with the same thinking we used when we created them." How can you argue with Einstein?
And so, the pressure to involve the group, to improve the system, and just to do something leader-like combine, naturally drawing the well-meaning leader to take action on the system. Let's look to the organizational chart! We will see how things look, and where we can make improvements. To make the lure of the drug even stronger, a line of impressively-credentialed internal and external consultants is standing by to help. Any of them is happy to offer expert insight into possible changes. Whether or not their help is used, their existence lends credibility to the strategy.
Credible it is! It's logical, it feels natural, and it's much more comfortable than sitting around doing nothing. But there is a terrible, fatal flaw with "the reorg" hiding in plain sight: The org chart has nothing to do with reality. Making changes to a human system based upon an org chart is like planning a drive through Los Angeles by consulting a map of Paris, drawn on a cocktail napkin, by a fifth grader.
Consider its history. The org chart is a leftover from long before today's information age. The first one is believed to have been drawn in the mid 1850s by a railroad superintendent named Daniel McCallum to optimize track construction over long distances. Back then, the organization was top-down and hierarchical. Each worker was a point in the process, and higher-level individuals had broader views of the systems than their subordinates within them.
Today's information age workplace is completely different; Therein lies the problem. Consider the following picture: an org chart on the left, today's reality on the right.
Both images display an overall manager with three supervisors, managing three subordinates each. But the "org chart" completely misses all of the other communication links within the organization and outside of it, which together comprise the majority of information movement.
There's a parallel here. Those of sufficient age may recall the popularity of the "telephone tree," a prior generation's tool for information transfer to parents of schoolchildren. Each parent was assigned a position in the tree. When a piece of information -- such as a snow-day cancellation -- needed to be quickly disseminated to everyone, you would receive a call from your "superior" in the tree, and then you would call your "subordinates" with the update. Each person would make only a few calls, and the information would cascade quickly down the hierarchy.
If this doesn't sound familiar to you, it's because some years ago e-mail killed the telephone tree. With e-mail, any group member can disseminate information instantly, to some or all of the others, with the click of a button. One parent schedules a pizza party for everyone; another asks half the group for help with fundraising; Four individuals living in the same neighborhood collaborate to arrange a carpool. This new method of communication was adopted rapidly, because it was easier. It rendered the phone-tree obsolete.
Perhaps a few schools keep the phone-tree around today. But if you were to attempt to understand a group of parents by studying the phone tree, you would be missing most of the story.
That is precisely what an org-chart-based reorganization does. Reorganizers study an obsolete, inaccurate, non-representative, infrequently-used map of a system, and then implement a set of changes to that system based upon the conclusions drawn from the faulty map. In other words, they review the left half of the figure above, and use it to make changes to the right half. Then, in what is perhaps the most insidious step of all, they redraw the inaccurate map -- the new org chart -- based upon the expected results of the changes, rather than upon the reality of the new situation.
To really understand this, consider a situation in which two individuals are removed from the organization. As you can see below, the org chart fails completely in its purpose of adequately representing the real impact to the crystalline network of this change. And yet, the "new org chart" in this scenario will be drawn exactly as it is shown on the left, with the removal of two "boxes." It will be used going forward as the basis for understanding the system, regardless of what happens in real life.
What happens in real life is decidedly different! Person two and person four, for example, are both members of Person one's staff. Previously, they had little direct contact, and no direct link. But somehow, Person 10 had become a de facto interface between the heads of two departments. When Person 10 departs, this link will be one of more than fifteen broken links in the figure. The looming chaos is completely hidden by the false sense of order implied by the org chart.
Most of us have who have been a part of an organizational change have experienced this phenomenon. A seemingly insignificant person retires, for example, and the resultant confusion takes months to sort itself out. Conversely, a manager with an important title changes jobs, and nobody seems to notice.
The lesson is clear: No matter how long and hard the org chart is studied, changes to it produce shock waves and impacts that differ wildly from predictions. This is not at all surprising when you realize that the predictions were based upon a faulty map. And yet, for some reason, we keep repeating the same behavior.
Sure, an org chart may be useful for defining reporting relationships, assigning responsibility for the completion of annual performance reviews, and for articulating the path of flow for top-down informational bulletins that require live delivery from management. But the next time you're planning on making wholesale, system wide changes based upon your org chart, I strongly suggest that you stop, think again, and find a different solution to your problem.
LA is a big city, and that fifth grader's map of Paris isn't going to keep you from getting lost.
Follow Edward Muzio on Twitter: www.twitter.com/edmuzio
The solution is relatively straightforward: what gets rewarded is what gets done.
Simple does not mean easy. The "reward" isn't always what the organization thinks it is, and the person doing the rewarding may not be the boss. Every person in the organization is demonstrating the exact behaviors that the executive culture rewards.
Reorgs move the problem, but if the problem is structural--say, your compensation system rewards heroes, but executives extoll teamwork--money talks and b.s. walks.
Yet in places like Finance or Sales, there are many 10 year young guns that started just out of school that are progressing nicely. Someone someplace is cultivating them and they are moving up the ladder. And having worked with many of them about half are worth a damn.
I guess the problem I see is our senior staff all has it's favorites, and for the last decade we have had Engineers and Accountants in charge.
Also speaking only from my little corner of the world, what is a reward? I see people that do just enough and people that put in a full 9 hours a day and everyone gets 2.75% increase every year. It does not take long to loose that drive to excel when the carrot is never rewarded.
When a company is in trouble the first action is a management "reorganization" often coupled with a scapegoating session. Focus groups and more meetings to deal with the crisis. Next is a reduction in force typically at the worker level.
As a company grows it's management becomes evermore detached from it's workforce, customers and the people actually producing the product. Managers are "career focused" instead of "company focused".
I remember once, speaking with the manager of a 5 Billion dollar factory. He told me he made a point of spending at least two hours a week on the factory floor, with the workers, no other managers or supervisors around. He said he learned more in that two hours than he learned in 3/4 of his management meetings. He also built a relationship with his workers actually building product.
Managers need to actually experience what it's like being a customer. What it's like actually making your product. Unfortunetly to many managers consider that "below" themselves.
Management should understand the flow of communication within an organization. So often, flow charts over-simplify complicated situations and procedures, that when the outcome differs from what was expected, Management is surprised, points fingers and everyone panics.
In reality, things are never as cut and dry as a nice, ordered flow chart. A false sense of certainty leads to chaos. Once Management understands this, life will be less stressful for those who must work under them.