The Business Case for a Disciplined Approach to Designing Jobs and Organizational Structures
Jane had been the accounting department’s top performer for 10 years, but three months ago, to her manager’s surprise, she resigned. Her reasoning? She was no longer satisfied with the work after a recent reorganization.
So what happened?
The company had gone through some restructuring and layoffs about six months prior because of a slowdown in the market. Their overall financial position was still very strong, but they wanted to get lean and took the opportunity to downsize. Unfortunately, while the financial objectives were clear about how many heads to take out of the organization, there was far less clarity around how to most effectively design the new organization and the necessary jobs.
In Jane’s case, what ended up happening as a result of the restructuring was a collection of poor decisions made by her senior management team. The work environment, that at one time was fulfilling and engaging, now became a chaotic fire drill where the entire team’s performance suffered. Jane tried to raise her concerns to her manager, but after a few frustrating months of inaction, Jane decided to jump ship. Good for Jane, but with the brain-drain that slipped out the door with her resignation, the already struggling accounting department now has an even deeper hole to dig themselves out of.
So how did things fall off the rails? We had a chance to catch-up with Jane and get her observations about what went wrong. Here’s how she summed it up:
Work Process Analysis – the senior leadership team approached the restructuring from the perspective of just moving boxes around on the org chart, taking out the required number of headcount reductions. There was virtually no consideration given to either the existing work processes or any analysis done to find ways to reduce cycle times, remove bottlenecks, eliminate unnecessary work, etc. The point being, redesigning an organization should start with a thorough work process analysis.
Evaluation of Structural Alternatives – let’s face it, no organizational structure is ever going to be perfect. However, each of the structural alternatives can provide a certain list of benefits, as well as carry with it a known lit of costs. The leadership team didn’t give any thoughtful consideration to the various alternative structures and as a result, they went with a hodge-podge mix of some functional structure, some customer and some geographic, with no consideration at all given maximizing the benefits of the various structures or overcoming the inherent weaknesses of each.
Design of Jobs – Given the shoddy performance on some of the higher level organization design activities, it should be no surprise that the senior leaders also did not give thoughtful consideration to the design of the jobs that would remain. From Jane’s perspective, it seemed like each person who remained still had all of their old responsibilities, but they were all tasked with picking up other activities from the folks who were let go. Two things happened as a result of this approach, some workers, including Jane, got dumped on with a seemingly impossible workload while others were barely affected. In addition to the imbalanced distribution of activities, the activities that Jane picked up were very fragmented, meaning she saw no clear connection between the work she was doing and how it impacted the overall accounting function. She also complained that the level of skill and complexity of the new tasks were inconsistent. For some activities, she felt like her skills were being stretched, which was a good thing, but the majority of the activities were things that she had mastered five years earlier in her career.
Communication & Involvement – All the bad design issues aside, the point that seemed to cause the biggest sense of frustration for Jane, and what she described as now a team-wide issue, is the way the communications and change management was handled. The reorganization effort was done behind closed doors with just the senior leadership team and they purposefully excluded people from the department in the design process. Some people were starting to piece together rumors while the design work was going on, but when the manager was directly asked about what was happening, he flat out denied knowing anything about any reorganization. Less than two weeks later, the axe fell and the layoffs and restructuring went in to effect. It was stupid on their part to not engage the people who know the most about the work and who could have designed better processes, but then to actually lie about it dug the knife even deeper. In doing so, management cut out the soul of this place making it really hard for Jane to want to stick around any longer.
We asked Jane specifically about money, i.e., was there an adjustment to her pay in the reorganization and did she leave for more money. Her answers might surprise you. She said she did not get a pay adjustment through the reorganization, but that the idea never really even crossed her mind. She knew that the sales had fallen off a little and that the whole reason for the restructuring was to control cost, so she would not have expected anyone to get an increase. And while she did say that she did get a 5% increase to her pay in making the move to the new company, pay was not the reason for her leaving, nor was getting a bigger salary a motivator. What Jane was looking for was a work culture that she could get excited about again. She still has a lot of passion and energy around the work she does and derives so much of her career satisfaction out of being able to contribute to a process, get feedback about her performance from not only her boss, but just by being able to clearly see how her performance matters to the team. Jane expects to be paid fairly, but what gets her fired up and excited about going to work, yes, she said “excited about going to work” has much more to do with the design of the job and the design of the organization.
We think there are several important lessons to be learned from this scenario.
Organization and Job Design Matter – The story of Jane above and other outside research on Job Design and Employee Engagement should make it clear that doing a poor job on designing your overall organization and in the individual jobs within it can have a profound impact.
Respect the Process – Whether your needs are driven by growth of your organization or a retrenchment, there are some clear steps to take to designing organizations and jobs. This design work is much more than just an exercise of moving boxes around on a page.
Change Management is Critical – There are several components to an overall Change Management methodology, but the most significant piece here is going to be communications planning and execution.
For more information on how KnowledgePay can assist you with your organization planning and job design needs, contact us or visit our website to learn more about our compensation consulting services.