Tuesday, June 29, 2010

Triggering a full reorganization

How often do you stir things up in your company? I was turn to this topic by a conversation I had about operational efficiency. I was thinking about how often you should look at what you are doing and look for ways to improve it. If you go by the Kaizen methodology, then you are doing this constantly... this works great for small changes but not for big ones. Full-on reorganizations can be triggered by traumatic events but the price you pay in organizational stress is great.
I recommend you are always on Kaizen mode; it is a great way to do business and life in general. But, how do you decide is the right time to do a full-on reorganization? The conditions I think could trigger a full reorganization are:
  • Financial results are not there for 3 quarters or more. You are underperforming and it is not the result of a disaster, and the recovery trend is not there.
  • You tried incremental enhancements and they are not having enough impact.
  • Your key decision processes are convoluted or ineffective.
  • Key players leave or arrive into your organization (for example, after a merger or acquisition).
  • Your market conditions have changed dramatically (new and strong competitors; new business models)
These are a few of the conditions; your individual reasons may vary and add to this list. If you decide that a reorganization is in order, just be careful to fix the issues with a holistic approach.

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