Friday, 12 July 2013

Reorganisations - the last refuge of the incompetent

There is one ritual that happens in all companies periodically without fail - an organisation restructuring. Old structures and divisions are thrown out of the window and new structures are announced. HR types take great pleasure in redrawing organisation charts, rewriting job descriptions and the like. Communication types have an orgasm designing communication packs and writing words like "restructuring to stimulate growth", "bringing the organisation closer to consumers" and such other waffle. CEOs like to stand up to the press and announce the change , to make up for lack of anything else to say about their companies. MIcrosoft did just that today, the trigger for this post. Steve Ballmer's version of the blah blah is "We are ready to take Microsoft in bold new directions". Balderdash. I have never seen a more futile activity than an organisation rejig. And yet companies do it all the time.

The pattern is all too predictable. If the current organisation is based on product lines, it will be made regional to "get closer to the consumers". If it is regional, it will be made based on product lines to globalise and take advantage of scale. People will be moved around in boxes on organisation charts. The new guys have to go on a round the world trip to familiarise themselves with their new responsibilities. Lots of presentations and power point charts. Every four years or so the charade is repeated.  None of this matters one iota to consumers and shareholders. The only gainers are probably the management consultants who make lots of money.

What a thorough waste of time and effort. Structures are important in organisations, but they matter less than you think. The primal instinct of marking territories and defending against invaders, is what structures are. Structures are boundaries where defences are erected , by petty minded egoistic manages who need to feel important. Much effort is actually expended in organisations in crossing structural boundaries. Seasoned operators build alliances and have informal channels through which they get things done.Formal structures matter little to the determined go getter.

The root of the problem is man's territorial instinct. Man likes to draw boundaries and defend everybody inside the boundary from everybody outside. Alpha males who inhabit the business world suffer from an acute affliction of this instinct. Chief Executives and Boards struggle to overcome this and get the entire organisation to operate seamlessly. Fat chance of that happening. In this quest, organisational restructuring is the placebo. The placebo is particularly touted by the HR function, as a magic cure, which gullible CEOs swallow all to easily.

If Microsoft's leaders think they can solve their fundamental problems and compete better with the likes of Google, by an organisational revamp, well, perhaps its time to write their obituary.

10 comments:

Asha said...


and they( microsoft) have glamorous designations like IT pro evangelist though i hear they are not preachers.

I don't know about these unless i read it here but one thing i know is every other corporate person has fancy designation adorning their calling card. The card of an HR head reads as talent aquisition head and every other person is VP( with due respects to all of them who have achieved through their hardwork)

So from now on i too have decided to redesignate myself from a homemaker or "Stay at home mom" to an Asset manager after all family is an asset and i manage it.

Ramesh said...

@Asha - Oh yes - all sorts of fancy designation abound in the business world.

I hereby designate you as Chief Executive - Travel Writers Guild of the World.

Sriram Khé said...

I would like to join that Travel Writers Guild of the World, even if only as a peon. Sounds like an exciting guild to be a part of. Ooooops, I ended that previous sentence with "of." Is that an automatic disqualification from the Guild? ;)

Years ago, when waiting for a connecting flight, I chatted with a suit-and-tie guy. He said he was a management consultant. I asked him what they did in his profession. He joked that they go to their clients' offices, gather together their managers and ask them what they do, and what they would do given certain scenarios. The consultant then uses all those responses, re-packages them, and presents as the plan. Collects the $$$.

I am sure there is more than a kernel of truth in that joke.

I doubt such a thing exists in the Travel Writers Guild of the World ;)

Ramesh said...

@sriram - I hereby appoint you as the chief peon in the Eugene offices of the Travel Writers Guild of the World (Notice the "of") :)

Of course, there is more than a kernel of truth in that joke. Suggest you swap those T shirts for a suit and a tie and spend a year doing what your airport acquaintance said. You'll have enough to go back to the Ticas for a while :):)

Shachi said...

The day I read this post, I got an email of yet another org change for our group. My org must have changed more than 100 times (literally) since I joined this group 6 years ago. And in my opinion, they are more disruptive than beneficial. As soon as Paul Otellini left, a series of org change announcements came in....wonder why?

It's one of the reasons I've stayed away from managing people. I find the technical ladder way more peaceful in that respect :).

Ramesh said...

@Shachi - Oh yes - Intel is famed for org changes all the time. Technical ladders are fine milady, but you are no techie - you are a warm, bubbly, gregarious young lady - so move to HR :):)

Sandhya Sriram said...

You know what Ramesh, there is a new species of so called homo sapiens that have taken over this long guarded territory of HR. they are called strategy consultants. You know who i am talking about here.

Their core competence > fancy powerpoints.

USP > inventing new english words that can catch the fancy the ear of the CEO

Suits and Stylish english, boast of contacts and industry spanning knowledge (wonder if they can quote one of teh contacts who actually benefitted)

Delivery > well who cares

Poor HR are now mere facilitators.

But also feel sometimes, any change does bring a bit of a recharge to teams. whether worth the money spent... hmmm... depends.

Ramesh said...

@Sandhya - yes; sack the strategy consultants. Unfortunately that's also the sort of crap I am peddling these days; so have to be careful what I wish :):)

Vishal said...

Completely agree, Ramesh! at the end of the day, it is people who need to perform and do their best irrespective of whom they are reporting and blah blah.

Ramesh said...

@Vishal - That's right. I think in today's business world, structure are mattering lesser and lesser and the informal network works more and more.

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