Never underestimate the importance of engaging your people as part of any organization change initiative, argues Paolo Moscuzza, or you might find your business’s hidden informal networks overpower the new structures you put in place.

“We trained hard, but it seemed that every time we were beginning to form into teams, we would be reorganised. I was to learn later in life that we tend to meet any new situation by reorganising, and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralisation.”

There’s something uncanny about reading this quote from the Roman knight and writer Caius Petronius in AD 66. Even 2000 years ago, the short-term impact of a reorganisation seems to have created the same emotions and questions of inefficiencies as it does today.

Informal structures
The human side of major reorganisations is becoming increasingly important as more and more unsuccessful change implementations hit the headlines and share prices.

One of the main reasons reorganisations falter is that human dynamics operate outside the new structure. Put simply, the structure may tell you about authority, but it doesn’t necessarily determine power or influence.

For example, a client working in the UK office of a global Japanese organisation wanted to find some information that was held in Japan. The organogram led him to two people who should have been able to help. But in reality, neither could. He later learnt that there was an unwritten way of getting the information which involved contacting another person who was unrelated to the process, but who had a historical connection. In a confused state he made contact and had an e-mail with the information the next day.

This illustrates the way that the informal structure can override the formal structure. People at work establish habits and norms. Individuals find ways of getting things done.

Confusingly, things that do not work well can become norms for individuals who stew in the comfort of knowing exactly what they won’t get and feel comfortable in that knowledge.

While authority is a direct product of structure, power is only partially a product of structure - influence can operate outside the structure. This asymmetry can impact on the design of the organisation with the new structure having one purpose and the informal forces creating different power dynamics that result in unintended decision-making processes, responsibilities and modes of affecting the decisions.

The ‘bosses’ authority to request something is not the same as the power to make it happen.

This can be most pronounced following a reorganisation (as people rely on the old way) but it can also be part of the fabric of an organisation. However, the key message is that creating a new structure will not necessarily create the desired behaviours and will often (especially if mismanaged) generate undesired behaviours which appear totally unrelated to anything.

These undesirable behaviours can derive from the anxieties that restructuring provokes. When the restructuring begins (or even when it’s announced) anxieties rise to the surface like lava in a volcano, creating heat and danger that no-one notices until it’s too late. The underlying cause of anxiety is often a perceived loss of authority, influence and power or status.

Egos and power
Designing structure involves egos and power games. Attribution theory can be effective for predicting how people will interpret the changes. In a nutshell, attribution theory indicates that events can be interpreted internally, ie “I came out of this better because I worked hard/am great” or externally, ie “I am worse off because it was all a set up/he never liked me.”

People who are pleased with the changes often find internal explanations and people who are disappointed come up with external explanations. Hence there are many messages, public and private discussions, emotions and even tantrums that result from the interpretations of changes to power.

A senior manager I coached recently said that he really did not care about the changes that were taking place in his organisation. He angrily described how he didn’t care what people thought of him and his silly new role. Silly was a term he used to describe a demotion packaged as a sideways move.

His response was to deliberately behave like a more junior person and not do things the new way, to make a point. Such sabotage behaviour is not uncommon. Although this form of unconscious sabotage is often temporary, it can damage and reduce productivity. And, in this case, it confirmed the decision to remove his authority rather than bring it into question.

There is no nice way to move someone backwards with a sideways title, but there’s scope for minimising the negative repercussions. After all, the way the design is managed and communicated does have an impact on the interpretation and willingness to support the changes.

Alleviating obstacles
Now that it’s fashionable to talk about the emotional side of change and expressions like ‘winning hearts and minds’ are popular, people do just that; they talk about the emotional side of change. A two-hour workshop that provides a basic understanding of the impact of change may be useful for a few. But many are left wondering what to do with the information.

There are many interventions that can support a reorganisation. One of the simplest involves taking measurements at various points during a change.

In one instance, we were supporting a global consultancy through the implementation of a significant restructuring programme. Data, which was collected over five days, identified two countries that would certainly sabotage the changes and the sabotages were clearly top-down. By the end of the following week, we had helped to put a remedial plan in place and the 14 day implementation began the following Monday. Although the plan did not fix all the problems, it eliminated and drastically reduced some of the greatest threats.

This illustrates how data can be used during a restructuring to identify and alleviate some of the obstacles to successful implementation. The confidentiality of the process ensured the accuracy of the data, which in turn, led to more focused interventions.

Grand designs
A new design can bring the potential for greater opportunities for some and disappointment and anger for others. The absence of genuine support and commitment can hinder, or in some cases, prevent the success of a new structure from achieving its strategic objectives.

The objective is not to have everyone on board, but to recognise and address the emotional rollercoaster that each individual is on. Investing in people is good business because efforts spent on winning your employees’ hearts, as well as minds, pay off.

In order to safeguard a design solution, it’s necessary to examine:

• The logic of the organisation design which deals with the cognitive based resistance (ie A does not want to relocate, B is angry because he needs to do more paperwork, C has more work to do, etc) to the new organisation design
• The emotions relating to the new organisation design
• The associated power issues
• We work with organisations to address these three issues in creating structures and identifying and challenging boards with the risks associated with proposed structures.

For more information, please contact paolo.moscuzza@erconsultants.co.uk

To read the full edition of Topics, please click here March 2006.