The Dreaded Re-org

"I just got off the phone with my new boss," she said.

"How many is this for you now," I asked, smirking a little?

"This is my third boss in two years. It's like this company's whole business model is doing re-orgs every few quarters!"

Sound familiar? The fabled corporate reorganization is so common it has become a regular bad joke in corporate culture.

Once in a while, reorganizing leaders, teams, and whole departments is necessary. Companies grow and evolve, adding people, integrating new technologies, and acquiring whole other companies that have to be synchronized. Sometimes wholesale organizational change is required.

But a reorganization is a dramatic move, one that can have a deleterious impact on teams' and individuals' morale and momentum. It should really only be used if no other means of alignment is possible.

Consider it akin to cosmetic vs emergency surgery. Occasionally, the health of the patient calls for decisive and dramatic action such as a surgical procedure. But if, instead, the patient becomes addicted to cosmetic surgery on a regular basis, favoring this dramatic action over the slow and steady improvement regimen of regular diet and exercise, we would consider this a pathology.

And it is just so with the corporate reorganization schemes. Having too many of these too often in your organization is a clear indication of a deeper problem.

Is Your Organization Internally or Externally Focused?

A few years back, Paul Graham, cofounder of the accelerator Y-Combinator, published a piece about startups being considered either default dead or default alive based on their metrics. It referenced a handy calculator created by Trevor Blackwell that illustrates the point beautifully in graphic form. Essentially, based on your current revenue, burn rate, and growth rate, you can determine whether or not your startup is headed generally "up and to the right," or stagnating and headed ultimately for failure.

I see a similar pattern within larger organizations. Instead of dead or alive, we can think of an organization as default focused inwardly or outwardly as a clear indication of the health of the organization.

An organization that is internally-focused is more likely to fail than their externally-focused competitors.

Let's look at some examples.

Examples of Internal Focus:

There are frequent reorganizations or people, teams, leaders, and departments.

Frequent re-organizations indicate that senior leaders have failed in their chief responsibility, namely to put the right people in charge of the right activities, and to organize departments in a way that allows them to maximize their strengths and resources to achieve strategic objectives. An occasional re-organization is OK, if it's really necessary. But seeing more than one or two in a decade is a sign that the focus of senior leaders is more on themselves and their roles and responsibilities than the needs of their customers or the changing dynamics of their markets.

Managers are debating and constantly changing the process.

Process is an unavoidable part of doing business. It takes the creative solutions to certain problems that have won out among alternative paths and codifies them into a set of rules or workflows. It's a form of automation without machinery. Having a good process to follow optimizes the cognitive workspace of the organization to focus on novel problems, rather than repeatedly solving the same old problems.

Therefore, when managers frequently struggle to align on a process, devolving into frequent arguments about it and changing it every few months or quarters, it is a good indication that the attention of the organization is more on the internal issues between leaders than on working together to deliver value to customers.

Teams are building internal systems that are not core to the business instead using bought, outsourced, or using open source systems.

Not invented here is described in Wikipedia as the tendency to avoid using tools, solutions, or methods that are imported from outside the company. These organizations tend to build their own versions of everything, from CRM tools to system components like authentication or email delivery, rather than leveraging outside-made systems and components that are purpose-built to solve their particular problems. This is another form of being too internally-focused.

Practitioners rarely exchange ideas with practitioners at other companies.

That you are reading this article stands as an example of looking outside of the organization for inspiration and ideas that are not currently within the knowledge, strengths, and resources of the group you work with. Organizations that are too inwardly-focused tend to apply the same Not Invented Here pathology, described above for tools and system components, in the domain of methodologies and ideas.

Departments hoard information about customers, procedures, or technologies.

Even inside an organization, whole departments can have an internally focused view, and avoid collaborating with other departments in the same organization. Sales hoards access to customers. Engineering or Security refuses to support tools bought in by other teams. UX claims a monopoly on customer and market research. This information hoarding breaks the trust that should be between departments, making it all but certain that the organization will be out of alignment.

These are just a few examples of the tendency for an organization to be default internally-focused, in essence at war with itself, rather than focusing outward on the needs of customers and the market.

Examples of External Focus:

Everyone is talking to customers regularly.

In outside-focused organizations, there is a relentless focus on the voice of the customer. Stop there. I am not talking about platitudes here. I mean they actually do it. The engineers have all had the experience of talking directly to at least one customer. The product managers and designers likely do it every week. If that level of customer access is happening, the design and development of products are more likely to result in outcomes customers love.

Teams are using and contributing to open source software.

No arguing about internal tools versus existing options. Engineers are using the well-established open source components that solve key problems every tech team has, for authentication, security, email, style guides, API calls, provisioning, and so on. No-one is saying, "Maybe we should build our own analytics dashboard," because that would be stupid. The outside focused organization has also solved hard technical problems and open sourced their components for other developers to enjoy. There is a regular and enthusiastic exchange of technical ideas and innovation between the engineers in the organization and the outside world.

There is an engineering, design, or product blog about how you work, and lots of public speaking.

The people doing the product development work in an outside focused organization are broadcasting their accomplishments to the wider practitioner communities. There is an engineering, product, and design blog where they are sharing their methods with the world. Folks are encouraged to give talks at conferences or organize technical meetups or other events. This illustrates to the world, and especially potential new hires, that this is an exciting place to work where quality is high and there is a clear path to advancement.

Treating recruitment as a marketing campaign.

Speaking of recruiting, bringing in new people is a first-class priority in building a company, at least as important as managing the people you already have, and probably even more. The process of getting hired at an outside focused firm is delightful. The HR folks treat adding new people to the company as a key part of successful culture. Making it easy to apply, to get notified of your status, and get your interviews scheduled, will leave candidates with a great impression of the brand and culture--even if they don't get the job!!

There is a clearly defined vision and strategy.

Finally, when the organization has a clearly defined vision of the future, and a specific and actionable strategy on how to get there, individuals and teams are able to align their work to the strategy. The vision should describe the impact the organization seeks to make out in the world, not inside the company. And the strategy needs to account for the landscape out there that must be traversed in order to achieve the vision.

Internal or External... It Starts at The Top

Is your organization default internally focused, or default externally focused? If your organization is internally focused, paradoxically, it's a good sign that senior leadership is the reverse: they are more focused on others than on themselves, more interested in micromanaging their teams and leaders than they are in developing their own leadership abilities.

But it's also possible that leadership is just unaware of the problem, and that by raising some of the issues above, you can start to turn the company's attention back to the outside where the real action is. Start small, and in your own team or organization and lead by example. If you can, build relationships with others in your organization who are doing the same. Don't be discouraged. Eventually, your efforts will pay off.

And if they don't, there are plenty of externally-focused companies out there you can talk to about job openings. And, hey, you'll recognize them by their fantastically friendly and easy application, interviewing, and onboarding process.

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