How to Boost Morale and Productivity after a Reorg

Are company reorganizations (reorgs) bad?

It depends on who you ask and how the reorg was handled.

Most people associate reorgs with negative experiences because they often signify significant changes to the business. For better or worse, people tend to resist change, making reorgs an uphill battle when it comes to winning hearts and minds.

Whether a company has determined a business unit is no longer profitable, their success metrics need to change, or that they are simply moving in a different direction, a reorg means that change is coming.

The challenge most companies run into when attempting to successfully enact a reorg is effectively communicating the strategy, getting buy-in, and achieving adoption of the new status quo.

A typical reorg looks like this:
The CEO, often under pressure from the board, decides to implement a change in how the business operates. Perhaps the company isn’t profitable enough, early indicators suggest the need for proactive adjustments, or a new strategy seems necessary. The CEO shares this plan with the executive team, expecting them to communicate and champion the change with the same enthusiasm.

In an ideal world, employees would immediately understand, embrace, and adapt to the changes.

In reality, direct reports—wanting to appear as team players—often say, “I’m on board and looking forward to this change!” whether they genuinely feel that way or not. This lack of transparency creates a false sense of confidence for the CEO, who believes their team is fully aligned.

But then... the wheels fall off.

And then…egg on his face (metaphorically). The proposed changes fail to gain traction. Confused and frustrated, the CEO demands answers: “Why isn’t everyone as excited about this change as I am?!”

The truth might eventually surface, often at great cost. A brave executive who explains the lack of adoption risks being labeled insubordinate—and perhaps even losing their job. Others in leadership take note and quickly learn that honesty about these matters is unwelcome.

So what actually happened when the CEO proposed these changes?

First, his executive team who report to him, conceptually understand why the change is being proposed, but they aren’t fully sold on the solution. It wasn’t their idea and they haven’t had enough time to think through the ramifications and determine the best outcome. The change feels very sudden.

They then go to their next level of leadership and say “A change is being made. We are now transitioning from operating like xyz and are now going to be operating like abc.” The team asks “Why?” And those leaders say because the CEO has determined that we need to make this change.

That next level of leader now has to communicate down to their direct reports admonishing “I didn’t make this change! My hands are tied. I can’t control it but the executives at this company are now making us operate like this. Don’t kill the messenger!” You might have seen this exact scenario play out at your company on remote work policies as we get further from the pandemic.

The individual contributors doing the work at this company do one of two things:

Continue work as normal and not implement the change, or
Adopt the new change but do it very lazily and not work very hard intentionally scuffling the change process with the hopes that the executive team will see that this new way isn’t working and that they will revert back to the old way.

The result…complete and utter failure at worst, and a major distraction at best

But reorg’s don’t have to be this way. Shoot, if reorg’s were always failures, companies would stop pursuing them.

It is just critical that companies pursue reorgs in the right way.

Here are a few tips on how to successfully enact a reorg:

Start with Pilot Teams
Develop tiger teams or experimental teams that can begin to work on this new change. If they are successful, it creates a template for which to refer to in terms of setting expectations for the rest of the organization when the wide scale roll-out happens. It also creates an early group of advocates for the change.
Involve the right stakeholders early
Incorporate a strong team of relevant folks to set proper expectations based on full knowledge. Get as many people as relevant and necessary to be involved in the change and get a clear understanding and alignment on the problem statement that needs to be solved. If everyone isn’t in agreement on the problem to be solved, it will be impossible to create a successful solution and get buy-in. This requires vulnerability and openness from the executive team to show data on why it isn’t working.
Ensure leadership buy-in
Have your team communicate back to you, in their own words, why the change is happening and why it will help the business. Act skeptical, and only until you are convinced based on their argument to you why the change needs to happen, can you feel comfortable knowing that they are officially bought into the change.

Ultimately, reorgs are hard but necessary things for companies to innovate and continue to grow. If a reorg can be enacted successfully, that company will be in an incredible position to thrive moving forward.

If you are interested in engaging further into this conversation, follow the Ambition In Motion YouTube channel and look for virtual Pre-Symposium Panels covering this topic (Pre-Symposium Panels are virtual panels covering relevant business topics). And if you happen to be in Austin, TX on 2/13/25, come to the Executive Symposium which will debate and discuss this exact topic - RSVP’s here: ambition-in-motion.com/events.

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