Why do reorganizations fail so often?

Kenneth Smit editorial | 20-11-2015

Many reorganizations fail partially or completely. Why do major reorganizations fail so often? And what can we do about it?

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In recent years, headlines about mass layoffs have been commonplace. 5.000 employees here, 10.000 there, the waves of dismissals caused confidence in our economy to drop to an all-time low. However, many of these types of major reorganizations fail partially or completely. Most management and change managers argue that the organization shows resistance. However, is that true? Why do major reorganizations fail so often? And what can we do about it?

Failed reorganizations cost billions annually

Western European companies waste billions every year on reorganizations that fail. One in three reorganizations does not achieve the intended goals. In the Netherlands this is even 40%. This emerged from a large-scale study commissioned by Logica Management Consulting in 2008. The chance that things improved after 2008, when the crisis started, is very small. In short, it concerns billions. Astonishing!

The examples are countless. Take PostNL, for example, which has been reorganizing for years. In 2010 it was announced that the more than 11.000 postmen would be replaced by part-time employees and flexible workers. Reorganization is now also taking place at management level. The reorganizations have caused such chaos that PostNL was forced to halt the process. The plans need to be reworked. An extreme example perhaps, but it is a fact that things went wrong.

What goes wrong during reorganizations?

So what actually goes wrong? Is the lack of cooperation within the organization the problem? Or is it really the natural innate resistance that we as humans seem to have towards change? “Neither of them,” says professor Rob Blomme. He indicates that although changes always evoke reactions and emotions, this is fundamentally different from resistance. Change is a process that must be properly guided from start to finish.

Things mainly go wrong in the minds of the change managers. They have often been working on the process for months, if not years, and then finally decide to implement a certain reorganization. Perhaps desperately needed, but for the rest of the company it is a new and unknown fact. They have not, like change managers, been analyzing and planning for months.

What makes a change successful?

Successful change is indeed possible. During our Team Development training At Kenneth Smit we always identify the most important factors.

Empathy

It is crucial for a change manager to fully empathize with the employees who are subject to the reorganization. They are unfamiliar with the matter and may therefore see a change as a threat or at least as an uncertain factor. Empathy is then of great importance. So do not see uncertainty and defensive behavior as resistance, but as an opportunity to support your staff.

Workshop Leading

In addition to empathy, guidance is important. The employees feel uncertain about the changes and they need to be guided and reassured step by step.

Initiative and recognition

Changes can only be successful if they come from within. The employees will have to do it themselves. In short, the change manager has an important role to facilitate that employees can take initiative and participate in decision-making during a reorganization. Not like with PostNL. In addition, recognition should also be given for good ideas and initiatives. The Municipality of Tilburg, for example, like many other municipalities, has to make cuts and reorganize. Instead of just sending this as a message to the staff, various working groups have been set up with employees from all departments to think together about quick wins and innovations to save money. Employees' ideas are taken very seriously, as they have their 'feet in the clay' and can therefore better estimate what changes will result.

Common goal

DThe change manager also has the task of making the common goal clear to everyone. Not only that, he/she must create the feeling that everyone is fighting together for the same goal. In short, no individuality, no threat, but a challenge for the entire team.

Create a future

One of the main reasons for employee fear is uncertainty about the future. Whether one is allowed to stay or has to leave, the change manager must create a clear future where possible. Only then will employees sincerely work towards the goal and the future. Transparency and clarity are therefore of great importance throughout the entire process.

Business Improvement

Are your employees, strategies, current corporate culture and processes in balance? Of Business Improvement We look, among other things, at the current state of your organization and where you want to go.

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