Reorgs are futile: don't waste your time

After last weeks highly anticipated reorganization, the reality will have begun to sink in for many Microsoft employees this week.

"Who has power?, can I make this decision?, do I like my new boss?, do I want to stay here in the short or long term?"; are many of the questions employees will be asking. 

Steve Ballmer made a critical mistake last week, he failed to announce compensation changes that reinforce the collaboration he is seeking from his new strategy.  Read what I told Fast Company.

I am not a fan of reorganizations, because the design and execution is often flawed.  They generally don't work, demoralize teams, confuse customers and waste hours of leadership and employee time.  

Here are the top six mistakes leaders make when reorganizing:

  • Excessive focus on organization charts
  • Building an organization around one leader, then pretending they didn't
  • Creating an organization structure that doesn't scale
  • Ignoring how compensation and goal setting reinforces the behavioral changes required.
  • Failure to involve the right people in the design and talent assessment phase
  • Assuming you can send an email announcing the changes and you are done

Steve Ballmer is driving gargantuan change by removing the mini-ceo roles and creating one massive 100,000 person functional company at Microsoft.  It will require leaders role modeling behaviors for the whole organization.  Was the Surface price cut the first of those decisions under the new reorganization? If so, it would have required significant collaboration between three of the executives who report to Ballmer.  Read what I shared with the E-Commerce Times.

What will the first company wide Microsoft strategic choice be that optimizes for Microsoft, rather than the team or individual needs? That will be the test if the reorganization has worked.  

When you consider reorganizing your business ask yourself these three questions:

  1. How exactly will a reorganization accelerate your business results?
  2. Does this fit into your business and leadership plan for the next three years?
  3. How will you know you have succeeded?

If you can answer these three questions and avoid the common mistakes you will avoid an exercise in futility.