No Faster Way to Tank Culture than with a Poorly Managed Reorg

Restructuring is something almost every leader will do. Yet it is consistently botched and mismanaged. Trust is compromised and employees are left confused about why decisions were made. Sometimes they’re even left to figure out what it means for them on their own, even as they receive vague messages and high-level talking points from leaders about how the reorg will benefit the organization moving forward.

It is as if leaders think they can quickly execute the reorganization, then fix the culture later. What they fail to understand is that the way they manage the reorg IS the culture. Culture is manifested through actions, especially the actions that impact peoples lives and responsibilities. You can’t f*ck up a reorg and fix it with a movie night. If you want a culture of integrity, love, and hard work, for example, you darn well better make sure the reorg exemplifies those culture aspirations. There is simply no faster way to tank your culture than with a poorly managed restructuring.

Beyond the big mistake of simply underestimating its importance, there are a few other simple reasons that restructuring is so often mishandled. First, doing it well is time consuming. It requires a real investment of time and resources. The other is that it inevitably involves some difficult 1:1 conversations—something we all tend to fear and that some leaders avoid like it’s the “COVID summer” of 2020.

No wonder the typical restructuring process involves a leader or leaders making decisions behind closed doors, communicating them in one fell swoop, assuming people understood the plan (even though it took them days and most likely weeks to figure it out themselves), and then moving on as quickly as possible as if it never happened… then wondering why there turns out to be a “culture” problem. NOT good leadership.

Follow These Five Steps

Fortunately there is a better way, and it’s not actually all that crazy difficult. Here are the steps we typically recommend to leaders preparing to lead a basic reorganization process:

  1. Establish and communicate a window of time.

    Talk to the whole group first. Inform the team that some changes are coming. Let them know why. Tell them this before the actual and specific decisions have been made. Acknowledge that sharing this information introduces a period of uncertainty, and share a backstop date by which this uncertainty will be resolved. Explain that you are willing to live with this uncertainty for a period of time because it will allow for new conversations and the exploration of new possibilities that will lead to a better outcome for everyone. After all, uncertainty is a healthy place to visit but a terrible place to live. Let people know that by engaging them in the process, you are hoping to get to an outcome that is positive for as many people as possible, while also reminding them that ultimately it is your responsibility as a leader to make hard decisions that are best for the organization. Thirty, sixty, or ninety days are all reasonable options for defining this time period, depending on the context.

  2. Talk to everyone in the impacted group or groups before decisions are made.

    Sometimes the most important decision a leader can make is to not decide (yet). Once the window for change is introduced, peoples’ wheels will be turning. Have a series of 1:1s in which you hear them out. What would they ideally want? How are they thinking about their next steps? What ideas do they have? At this point, you (the leader) likely already have some strong hypotheses. These conversations may validate them, or may change them for the better. They also may reveal some valuable new insights that change the scope of the problem. (Lo and behold I was losing sleep over potentially letting Casey go and turns out he’s planning to go back to school anyway!) Not to mention, there is the undeniable benefit of everyone feeling heard and included in the process. Conversations like these can also be an opportunity to reassure your retention priorities, and give you a good sense of how many conversations are actually going to be hard in round 2—usually it’s fewer than we think!

  3. Make decisions.

    Combine your hypotheses with new information gained through the 1:1 meetings to make decisions. Sometimes the answers coming out of the meeting cycle will be obvious. Other times there will be new details to work through, information to track down, or new ideas to think through. Sometimes you’ll want to talk to someone again (or multiple times) to see if they would be willing to accept a particular outcome.

  4. Share the decisions 1:1 with those who are most impacted.

    Here, you hold a second round of 1:1s, focusing on those individuals who will be most impacted, or who you know will be most likely to react emotionally even if they are not personally very affected. These conversations usually include a mix of people who will perceive themselves as “winners” and “losers” in the change. Where you have to deliver bad news, cut right to the chase and stick to the facts. Don’t try to tell the person how they should or shouldn’t feel, and treat them with dignity and respect throughout.

  5. Finally, communicate the decisions clearly and directly to the whole team.

    No need for a long preamble or lengthy talking points at this point. Cut to the chase and tell the team where you landed and why. “As you know, I’ve been considering some important decisions about how we move forward. We began this process three months ago, and I want to share those decisions with you today…” Thank them for how they engaged in the process, and include a date when the changes will actually take effect. Leave time for Q&A, and anticipate the questions the team will have about these decisions, especially the “Why?” and “What does this mean for me?” Equip people with the information they need to feel confident fielding questions from others. Accepting change is much easier if I have a clear and logical reason to share with people in my family and network, understand the details, and was treated like a smart and thoughtful human being throughout the restructuring process.

After the decisions take effect, keep talking about it. Leaders often blow past this step, hoping to move quickly past any difficult feelings, but it’s important that you keep creating space for discussion and Q&A. Ask the team, “How is it going so far?” and “What new questions or confusion is emerging?” Remind them why the decisions were made. Don’t make it a taboo subject. If you create space for the questions to surface and tension to be released, it will be. After a few weeks, check back in 1:1 with the people who were most impacted to see how things are going.

Actions Create Culture

This process will obviously need to be adjusted to the context—the size of the organization, the magnitude of the restructuring, the tenure of the leader, and more. No matter the context, we have found this process to be effective if for no other reason than it reflects the cultures most leaders genuinely want to see in their organizations: cultures in which people’s ideas and voices are heard, hard decisions are made for the good of the mission, and people are treated with care and empathy.

When leaders model the culture they want and their actions and words align, that culture manifests. This is true with the day-to-day, but it’s even more true with the hard stuff. Thus, a reorg or restructuring is a tremendous culture-building opportunity. Executing it in a way that models your culture aspirations is one of the more powerful things a leader can do in terms of creating the culture they want. Conversely, do it poorly, and no amount of free snacks or early Friday release days will save you.