What is a reorganization plan and how are they structured?
In this post, we’ll explore the difference between a business reorganization plan and other related business change plans, such as organizational restructuring and business transformation.
After that, we’ll examine a few tips and considerations to keep in mind when reorganizing your business.
Reorganization vs. Other Types of Organizational Change
In business, reorganization is often used interchangeably with terms such as restructuring, realignment, and reconfiguration. Though the terms are similar, there are technical distinctions.
- Reorganization and restructuring emphasize organizational changes that affect the company’s underlying structural archetype
- Reconfiguration programs are smaller-scale reorganization efforts, such as combining or splitting business units, which do not fundamentally alter the company’s underlying structure
- Realignment efforts focus on realigning business activities that have become misaligned with external conditions, such as the marketplace or customer expectations
- Transformation refers to major organizations that change an organization from the ground up
While one type of organizational change may be the main focus of an initiative, it is important to understand that one type of change may result in other changes.
In some cases, these additional changes will be part of the overall change plan. In others, they will come as a consequence of the original plan.
For instance, restructuring a business could easily affect the organizational culture, workflows, and business processes. When creating a plan, change managers may also choose to include other types of change plans, such as employee training programs and digital adoption programs.
The key takeaway: since reorganization plans will often have a ripple effect on other business areas, it is important to take those into account when creating a reorganization plan.
How to Create a Reorganization Plan
Here are a few steps and tips to help you design and execute a reorganization plan:
1. Understand the business impact
In the last section, we explained how important it is to understand the total impact that a change will have on the organization.
To gain that knowledge, use assessments before the actual planning stage.
Useful assessments include:
- Change readiness assessments
- Gap analyses
- Cost-benefit analyses
- Technology acceptance model questionnaires
- Business impact analyses
- SWOT analyses
- Organizational culture assessments
Naturally, the type and number of assessments you use will be determined by the proposed change. Not all of those covered above will be necessary, and there may be other useful ones that aren’t in this list.
2. Design the strategy and plan
The strategy represents the overall approach to implementing the reorganization.
Articulating that strategy in a single, concise statement can help stakeholders understand the project’s direction, its approach, and its ultimate goal. Also, a well-crafted strategic statement can act as a “north star” that will guide planning efforts.
Plans, in turn, will combine the strategic approach with the information gathered in the first step. The result: a roadmap that will guide the reorganization process.
It can be useful to research models of change management, such as Prosci’s ADKAR model or the Kotter 8-step model. These models provide a general roadmap that can be applied in a variety of organizational change situations, as we’ll see in the next step.
3. Execute the plan
One important point to keep in mind when executing a plan is that certain aspects of the plan must be executed sequentially. For instance, employees cannot accept new job roles unless they understand what change is occurring and why.
The ADKAR framework, mentioned above, advocates a sequential plan that focuses on:
- Building awareness of the need for change
- Cultivating a desire for change
- Providing employees with the knowledge and skills they need to change
- Giving employees the ability to demonstrate their abilities
- Reinforcing change over time
The original version of John Kotter’s 8-step change model also followed a step-by-step roadmap. Its next version, however, which was released in 2014, included steps that could be executed concurrently.
In today’s business world, agile approaches such as this are becoming more common, since they often generate better business outcomes, greater organizational resilience, and improved workforce agility.
4. Create a guiding coalition to lead the reorganization
As the saying goes, no battle plan survives first contact with the enemy – and the same can be said of any business initiative, including reorganization plans.
The importance of staying agile, as noted in the last step, can help change management teams respond more quickly to setbacks, accelerate the pace of change, increase employee engagement, and more.
One way to build agility into a business process or initiative – mentioned by Dr. Kotter, as well as other leading experts – is to create a cross-functional team that can operate outside of the existing business structure.
Characteristics of this team should include:
- A willingness to adapt and stay agile
- A common sense of purpose
- Active support for the proposed change
- The willingness to recruit others
- The ability to self-organize and stay motivated
In the case of a reorganization plan, this committee would adopt the core responsibilities of the change effort. These could include all of the steps covered above, including assessing change readiness, redesigning the organization’s structure, collaborating with business leaders and stakeholders, and managing the change project.