Reorg governance – there is none!

Why is it that most mergers, reorganizations and downsizings fail to generate their anticipated full value? The main reason is a lack of good governance derails them. Employees lose confidence in leaders during the process and disengage. In particular, losing the trust of middle management is the most corrosive risk and can lead to passive-aggressive blocking in the extreme.

There are multiple fundamental challenges and many pitfalls to avoid. Senior leaders are generally afraid of involving lower-level managers in a change process for fear that they will either leave, or not be objective and act only in their self-interest. Most executives don’t have much experience making big organizational changes. And finally, there are no codified standards for how reorganizations or PMI should be conducted. Each leader does it their own way. Some may have the experience and know what good looks like. Most do not.

There are however a few pragmatic steps to ensure good organizational change governance. First, lower-level managers and subject matter experts must be involved to ensure good decisions and management buy-in for smooth implementation. This can be done without losing talent or dysfunctional gaming of participants if decisions are based on fact and made in groups. The group element keeps participants honest and aligned on the company’s interests.

Second, it is helpful to look at all decisions, communications and signalling from the perspective of a normal mid-level manager. If you lose the battle for middle management’s hearts & minds, you will lose the war. The simple process of putting ones-self in their shoes is key to implementing governance processes and communications that avoid risk. This is where high EQ helps.

Finally, Humatica has codified processes for implementing large-scale organizational change. This governance framework ensures that the right topics are addressed by the right people at the right time, in the right sequence and in the right forum; to master rapid, collaborative transformation. Using a well-structured governance process leverages experience gained through hundreds of successful reorganizations to avoid the risks which normally derail the best laid value growth plans.

This article was originally published as the Humatica Corner in Real Deals magazine.