What is the shelf-life of an organizational design? In my experience, about two years or so. Wait longer than that, and just like a loaf of bread, your organizational design will get stiff and moldy. To some, that may seem aggressive. After all, reorganizations are very disruptive, and the benefits must outweigh the costs. I’ll defend my answer, but let’s first look at the big picture.

What is the purpose of an organization?

Organizations exist because we believe that together, we can achieve more than we can on our own. It’s the old axiom: “the whole is greater than the sum of its parts.” If you don’t believe that, then you might be better off working for yourself than in an organization. Leaders have a responsibility to maximize the value that an organization can produce. Reorganizing is one way to maximize organizational potential.

Why reorganize?

As previously stated, reorganizations are very disruptive. So, why do them at all? You may look at your current organizational design and conclude that it is, in-fact, perfect the way it is. If that’s the case, then congratulations, you’ve done it! Even such, it will still only last about two years. Here’s why: Things change. The quality of an organizational design is a point-in-time evaluation. The same design that looks great today won’t look good in a few years because the world changes and our organizations must change too.

1. People change: Sometimes key people leave the organization. Even more often, people within your organization change. Sometimes, key people outgrow their current roles and you need to find them new challenges. This is a good problem to have, because it means you are developing your talent, but it creates a burden for the leader.
2. Strategies change: Your organization might be well-aligned to current business strategies, but how often do those change? Well since our world is ever-changing, it’s prudent for businesses to constantly evaluate their strategies, and it’s appropriate for organizations within the business to adapt accordingly.
3. Best-practices change: I’ve been around long enough to experience the influence of many evolving industry best practices for organizational design. I’ve experienced outsourcing, insourcing, matrixed, dedicated, waterfall, agile, bimodal, and product influences on organizational design. To be clear, this isn’t just about keeping with the hottest trends. Leaders should look externally to challenge their thinking and constantly learn. Not every trend is relevant, but leaders should learn about them anyway.

People, strategies, and best-practices all change fast enough to warrant a significant organizational redesign every two years or so. Now that you know why you should redesign your organization, how do you do it?

How to reorg

There is a stressful period of time between when you decide that you need to reorg and when you actually implement it. This time is usually filled with secret closed-door meetings. I don’t love this, but it’s necessary. When you are ideating on how to reorg, you have to keep it quiet and only involve core people that need to be a part of vetting and improving the reorg concept. Once you start down this path, it’s best to drive the process hard, and finish it as soon as possible. Secrets don’t stay secrets forever, so time isn’t on your side.

I like to iterate between one-on-one discussions and group discussions, making my rounds until I have solid confidence in the reorg design. This probably goes without saying, but definitely include human resources, your boss, some of your peers, and some of your direct reports in this process. This is not a solo task. You need a variety of perspectives.

Some approach a reorg with a blank sheet of paper, drawing out the ideal functional structure in concept without any names in it. While that doesn’t get you all the way there, it’s good to make sure your design makes sense independently of the people filling the roles. Then, start populating the chart with names. A successful organizational design not only looks good on paper, but it also simultaneously supports the career development of your leaders and individual team members. That’s pretty hard to do, but when you can make it happen, you feel like the planets have aligned and you get really excited about the change.

How to communicate

Once the design is finalized, it’s go-time. First, it’s time to extend the circle of trust to those who are directly impacted by the change but weren’t necessarily a part of designing it. That can be done one-on-one or in a group. As soon as you’ve made your rounds there, go public. Again, you don’t want a reorg to get communicated through the grapevine. Hold a town hall and send out an email to the department right away. The communication should be clear, simple, and direct.

One of the reasons this method of communication is so important is because organizations really struggle in times of ambiguity or limbo. If people get the sense that a reorg is coming, but it takes a long time to materialize, that hurts productivity and morale.

For my readers that are considering a reorg, I hope this helps clarify the path for success. For my readers that are on my team and just got reorganized by me, thank you for your patience and support!

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