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Business Observer Thursday, Feb. 6, 2020 6 months ago

Company reorganizations: communication is crucial

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A look at 10 common pitfalls when communicating a reorganization — and how C-level executives can avoid the danger zone.
by: Traci McMillan Beach Contributing writer

When Michael and Beth Vivio bought Corporate Fitness Works 18 months ago, they were intentional about the kind of company they wanted to buy.

The St. Petersburg-based, C-level veterans, who had headed up organizations including Valpak, the Austin American-Statesman and Girl Scouts Bluebonnet Council, wanted a company that had opportunity to grow where they believed they could make an impact. But they also wanted a low-drama transition with Corporate Fitness, which did $16.2 million in revenue in 2018. “We’ve both done drama before,” Michael Vivio says.

Although they knew change was necessary in order to make an impact, they sought to enact “organized change” or “change with purpose” at their new company. The planning and intentional transparency paid off in business results, Michael Vivio says, with 8-10% increases on its employee engagement survey and a 300% increase over the previous year’s net promoter score.

Traci McMillan Beach

Achieving stellar results like that involves a careful approach to company changes, including workforce reorganizations, or reorgs. Although reorgs can be advantageous in aligning strengths, streamlining processes and bringing a fresh perspective, they are most well known for spurring discontent in a workforce. To be on the advantageous side, here are some key pitfalls to avoid:

  1. Lacking purpose. Always have a clear goal or mission in place — a reason for why you are reorganizing. This should be clear for employees, investors and customers. For the Vivios, they worked first on making sure the company’s mission was clear, to provide an end game of where they wanted to get to and a reason for change. 
  2. Making abrupt changes without due diligence. The Vivios spent several months learning the business and understanding individual processes. Michael Vivio notes that to bring their skills and perspective onto a train already moving, it required “a little bit of listening and humility,” which “enables you to learn more” and informs strategic decision making.
  3. Failing to secure buy-in from those who will lead the change. The Vivios found success in bringing key leaders into discussions early. Rather than mandating the direction, they presented the information and let the core group draw the same conclusions themselves. Taking the time to foster an environment of trust and approaching discussions with patience led to full embracement of the company’s direction. 
  4. Lacking confidence. Change is easier to get behind when leaders are confident and prepared. Ensure key leaders have a full understanding of the change and access to prepared messaging, reference materials and FAQs. 
  5. Late communication. It’s not necessary to have every little detail ironed out before communicating with the broader group. If you wait too long, inevitably, word will get out, and information will start cascading through water cooler gossip. Once the reorg plan is solidified, engage the workforce as quickly as possible through communications that clearly convey why the change is being made, what the timeline is and what can be expected. 
  6. Infrequent communication. An initial communication is a good start, but you must continue to engage with staff on a regular cadence. Whenever there is a change, “people look for a lack of consistency,” Michael Vivio says. “Communications constantly reinforce pieces of the overall story.” 
  7. Handling layoffs poorly. Some restructures create redundancies or eliminate lines of business, which makes layoffs necessary. Handling cuts all at once as opposed to piecemeal terminations can lessen the blow to morale. Communicate with affected personnel privately and compassionately. Once you’ve done so, communicate to the rest of the team that layoffs were made, and reassure them that their jobs are safe and their roles needed. 
  8. Lacking empathy. Consider your audience and what is important to them. It’s tempting to get caught up with the high level opportunity the reorg will create for the larger company, but employees won’t hear a word of what you’re saying until they understand what it means for their day-to-day. They want to know if they will have a job, how their roles and responsibilities will change, any reporting changes, cultural updates and process changes. Help employees feel secure, and avoid sending them to competitors by addressing the questions at the forefront of their minds.
  9. One-way communication. Avoid making the mistake of simply disseminating information from the top and hoping a quick Q&A during all-hands meetings will suffice in answering employee questions. Commit to engaging employees in an open and honest dialogue and providing them with a designated way to get additional questions answered. For instance, you could offer group town halls, round tables or anonymous surveys for employees to ask questions and provide feedback. The key here is answering all questions, even if the answer is, “We’re still working through these details” or “There’s a reason why we can’t share that information with you.”
  10. Neglecting customers. While it’s imperative to get employees on board, engaged and behind the plan, it’s also important to communicate changes to affected customers and stakeholders. Gather a list of customers that might be affected, and explain what the change will mean for them and why it is a positive adjustment to how they typically engage with your business.

Team restructures require a great deal of thought, planning, time and work. Remember why you’ve decided to reorganize your team, and commit to engaging with your workforce every step of the way. Ultimately, with a new structure, you want your key talent to feel secure in the redesigned organization. “If you do it right,” Michael Vivio says, “the team buys in.”

 

Traci McMillan Beach's company, Craft Impact, partners with C-Level execs to build communication strategies that engage top talent and customers during organizational change. To discuss how communications can boost retention and operational excellence at your evolving business, email [email protected].

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