Myths of culture development:
Reorganization develops company culture
Reorganization is very popular
Reorganization is a very popular tool in business, to react to market research and/or solve internal problems. A study by McKinsey revealed that 60% of participating leaders took part in a reorganization process in the last two years. A further 25% experienced reorganization in the previous three years.
There are multiple possible causes for reorganization:
- new strategies (supposedly) require new structures
- non-satisfactory success should be compensated
- a change in staff in important decision making positions
- cooperation across organizational borders does not function well anymore
- functional organizations are substituted by divisional organizations or matrix organizations, to improve effectiveness and/or efficiency
- etc.
The unattractive world of reorganization
The experience with projects of reorganization are sobering however. Few leaders experience success in these kind of projects, as identified by the above mentioned piece of research (an experience we share).
Why is this the case?
Our hypothesis: Important modes of action of corporate culture have not been taken into account. Reorganizations have little, if any, impact on corporate culture, which may even unconsciously-actively torpedo the good intentions of a reorganization.
When a reorganization is implemented, much changes for the people in an organization:
- a new supervisor
- a change of department with new colleagues
- a merger of teams
- a different thematic focus of the job
- change of role
- well practiced processes are now done differently
- or you even find yourself in a new area, for example when data mining is moved from IT to marketing
This brings individual and collective more or less comprehensive changes to which people, but also the organization as a whole, react with their behavior.
The reorganization dilemma
If other behaviors are necessary for these structural changes in order to live the structural and/or process organization in such a way that it can have an effect, the calculation is often made without the host - in this case without the people as the bearers of this change. The people in an organization shape the culture, i.e. the collectively common, patterned and often unconscious behavior. Beyond individual behaviors, every organization shapes specific patterns that have formed over time for good reasons. Reorganizations often seek to change these very patterns.
For example, if one is not used to giving critical feedback to the neighboring department, perhaps because past experience has shown that this turns out to be to one's own disadvantage, a reorganization will change this behavior only to a limited extent, if at all. On the contrary, organizational changes can trigger feelings of uncertainty among managers and employees. This insecurity can then actually reinforce existing patterns - which in turn can lead to even less sharing of information that might actually be helpful to the neighboring department. As a result, it can then become very tedious and stressful for everyone involved if the goals of the reorganization and/or the organization are not achieved. Impatience can then lead to pressure and, with a bit of bad luck, the unwanted phenomena are further intensified.
A cultural way out of the misery
If a - necessary and well-founded - reorganization is to be successful, we believe it is essential to develop the culture along with it.
If the controlling automatic patterns of the organization remain unchanged during a reorganization, the reorganization will not achieve what it is supposed to achieve. Accompanying cultural development can resolve the reorganization dilemma. This requires:
- a collective awareness of the current culture
- a shared vision of where the culture is headed
- a shared understanding of how the journey to the target image will be organized
- a reasonable and emotionally intelligent way of dealing with inevitable setbacks and the frustration that comes with them
- an integration of culture development into everyday life to facilitate an agile iterative process
A conclusion
The level of culture must be included in reorganization considerations if reorganizations are to be effective. Cultural development is ideally integrated early in strategic or structural change considerations. Learn more about this here or contact us, we will be happy to advise you.
