A Behind The Scenes Look At How Org Changes Happen and Common Mistakes (Part I)
Leaders reorganize people and teams to support new initiatives, accelerate lagging projects, or (sometimes) to satisfy someone’s ego. Reorgs and team shuffles are happening more frequently due to the focus on labor efficiency and GenAI-driven shifts in priorities. This week, let’s take a look at how reorgs come about and what that means for leaders managing through the change.
Where does it come from? Who decides to do a reorg?
Reorgs sometimes feel out of the blue. You’re working hard towards your deliverable, and then out of nowhere, there’s an announcement of a reorg. How did this get started? Where or who did it come from?
There are usually three reasons why reorgs happen: strategy shifts, people changes, and bad execution. Let’s look at each in more detail.
Strategy-driven reorgs are the most common and frequent. The underlying reason is that the executives and leaders want to increase the resources on a particular project or reduce staffing on projects that are no longer delivering value. A manager, director, or VP goes through a series of official forums (e.g. reviews, annual planning) and informal conversations (e.g. 1:1) to get a new initiative green-lit. That comes with a shuffling of resources, and people move accordingly. It’s not just about the number of people on a project. The new project may call for a different combination of skillsets. A new team is created pulling from different areas of the company. Ambitious leaders may voluntarily move to high-investment growth areas, bringing their best people with them. Strategy-driven reorgs tend to be the most visible. The conversations are happening in broader forums across months and quarters. The logic and reasoning are often broadly shared.
Then, in a very different vein, there are people-driven reorgs. These reorgs are usually initiated by the manager or the skip level of an individual. Common reasons include:
A senior leader is leaving, and the role is not being backfilled. Therefore, teams need to reshuffle to maintain reasonable spans of control for the remaining managers.
A new leader is promoted. The scopes are shuffled to support this person’s promotion.
There is a clash of working styles between key collaborators. People are moved around in an effort to reduce friction.
Due to the nature of people-driven changes, they tend to be abrupt and opaque. It happens more “out of the blue” because departures have at best a two-week notice, and promotions happen over a few weeks. One may also never get the “real reason” behind people-driven changes, partly to protect a person’s reputation and privacy.
Finally, there are failure-driven reorgs. These occur because a team is underperforming or a project is not meeting important goals. The root causes for the failure may vary — skillset mismatch, failure of leadership, insufficient resources, unrealistic expectations, or force of nature. Depending on the root cause, a reorg is initiated by the sponsoring executive or senior leader to try to address the issue and revive the project. Depending on the company culture, this could be more visible (e.g. failures are foreseen and discussed in public forums) or invisible (e.g. a decision is made in private, small groups).
Knowing the primary driver of a reorg helps you understand how to make sense of the change. More importantly, it is the backdrop that shapes the constraints you’ll encounter in getting questions answered, how logical (or not) it may feel, and what your best choices may be moving forward. We’ll discuss common scenarios in part II next week.
Who decides the new structure? How is it done?
The process of designing a new organization is done from the higher levels downwards. With some form of a goal in mind (e.g. accelerate this project, solve for this person’s departure), a small group of key decision-makers takes a first pass at the new structure.
In more top-down organizations, this is more prescriptive. They will “hash it out” among themselves. In more collaborative cultures, more people are consulted and more discussions about pros and cons take place. In either scenario, having a close relationship with one of the key decision-makers means that you will hear about it earlier and/or end up with a more beneficial position after the re-org.
After the first pass is done, it is shared with the next level of managers. Often, more impacted teams are involved earlier. People who hold outsized influence are consulted earlier. Over the next few weeks, in a series of closed-door discussions, the new structure takes form. This is also the time when “horsetrading” happens, resulting in structures that don’t “make logical sense”. More on this next week.
As the reorg conversation moves down the management chain, less and less is up for debate. When it reaches first-line managers, it is often more informative than a true collaborative process. This mirrors the difference in power dynamics, context level, and scope of work between the executives and managers. With small startups or highly empowered cultures, the debates may move further down the management chain.
Often, there’s some aspect of the reorg that just doesn’t make sense to you. Why is this person leading this project? How did this team get moved here? Who is involved, what information is considered, and the timing of that consideration make the difference between a great and a bad reorg. We’ll talk about common mistakes leaders make and how to address common confusions from teams next week in part II.
Yue’s Coaching Corner
Last week, I attended a five-day training on Integral Coaching with New Ventures West in San Francisco. Integral Coaching is a specific form of coaching that draws upon the wisdom of the head, heart, and body to transform your leadership. It focuses not just on the skills, but on unlocking new ways of thinking and being that support lasting change.
If you’re interested in being an early client with me (reduced rates!) or my fellow coaches in the program, please drop me a note at yuezhao.coach@gmail.com.
The Sept cohort of The Uncommon Executive Leadership Accelerator is now open! The 8-week program incorporates time-tested curriculum, group coaching, and community to support aspiring executives to transform from “high-performer” to “inspirational leader”. Learn more and apply here.
How does the “rollout” happen?
Executives will initiate the reorg, and the discussions will slowly trickle down over weeks. At a certain level, managers are no longer included in the discussions. Even if the reorg is initiated at a Director level, it’ll travel upwards first before going downwards. Once the new structure is finalized, the official communication happens.
Sometimes, documents like this get created in large organizations to manage the sequence of conversations:
In this illustrated example, this reorg primarily affects engineering. As such, the discussions travel further down the management chain to directors of engineering. In contrast, sales directors are informed. In addition, it highlights a timing difference — engineering directors are consulted first in mid-June before the Directors of Sales. Finally, information access varies. VPs and above have all the details, while those who are consulted get only “need to know” information access.
There are, of course, always exceptions. Sometimes, a team that’s more highly affected will be consulted or informed sooner. Sometimes, function is not the factor that changes who is consulted or informed. In smaller organizations, the process may be a lot less formal and (frequently) not well orchestrated. While the example oversimplifies often complex scenarios, it highlights the critical distinctions in how the communication is rolled out.
For the actual communication, there are usually three phases:
All people managers are informed on key talking points: why the reorg is happening, what will change, and by when. Managers often get more details about their own team and peer teams, and less about changes outside their immediate scope.
Broad(er) announcement is made in a public channel. Depending on the scope of the reorg, it can be an email that goes out to the entire company, or an email a Director sends to his direct reports.
Managers have 1:1s with impacted members and/or host broader group Q&A sessions. Sometimes, these 1:1s happen “early” before the broader announcement for those who are more negatively impacted or are more trusted members of the team.
A well-orchestrated communication involving many people and multiple communication channels in a large organization is quite an endeavor. At Meta, I once received a 20-page communications plan (that links to other documents and plans for specific teams and functions).
After the broader communications, the critical path shifts to the managers. How much do you share? What if you don’t know why something is a certain way? How quickly do you “move on” to business as usual? Stay tuned for next week!
That’s all folks! See you next week at 3:14pm.
Yue
More On Leading Through Change & Uncertainty
-
Something i am facing myself… 😌