tag:theconversation.com,2011:/us/topics/corporate-restructures-17552/articlescorporate restructures – The Conversation2017-06-08T16:31:39Ztag:theconversation.com,2011:article/785472017-06-08T16:31:39Z2017-06-08T16:31:39ZMajor change at work can trigger loss and grief. Organisations must accept this<figure><img src="https://images.theconversation.com/files/172723/original/file-20170607-11305-yeecef.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Employees are often unsettled by change in their organisations.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>There is hardly an organisation in the world – big or small – that doesn’t have to adapt to changing circumstances. The pace of development in technology, the quick pace at which new rivals come on the scene, even the rapid turnover of leaders, all require shifts in the way things are done.</p>
<p>But it’s never easy to steer people through change. And, inevitably, there’s resistance. So how can organisations manage it in a way that gets them the outcomes they want?</p>
<p>The default when things don’t go well is to blame employers for being resistant to change. This may be convenient, but it doesn’t deal with the <a href="https://www.ncbi.nlm.nih.gov/pubmed/24362547">real issues</a>. </p>
<p>Over the last few decades organisations around the world have been pushed into large-scale changes, such as downsizing, outsourcing, mergers and acquisitions, or restructuring. The <a href="https://doi.org/10.1080/15416518.2015.1039637">success rate</a> in large scale changes is around 20%.</p>
<p>Change is inevitable. But forced change is emotionally more intimidating and disturbing than is generally assumed. This predisposes employees to be negative about it. What’s very often missing when organisations announce major change is that they don’t recognise this. In fact they should be concerned with issues such as loss, emotional trauma, grief and mourning.</p>
<p>Leaders, managers and change consultants have a great deal to learn about the ways in which employees experience change and the sense of loss they suffer. Change has little chance of success unless the severity of loss is acknowledged, grief is enfranchised and mourning is encouraged.</p>
<h2>Loss</h2>
<p>Work is central to many people’s lives and their identities. Therefore forced changes to jobs or work structures are <a href="http://www.emeraldinsight.com/doi/pdfplus/10.1108/eb028998">experienced</a> particularly intensely.</p>
<p>People become emotionally attached to things, the more important these things are, the more individuals want to hold onto them. The awareness of loss is therefore much more profound and creates more anxiety. </p>
<p>Any change involves some sort of loss. There are tangible losses like loss of income when a person is retrenched or downgraded. And there are abstract losses such as loss of control, status or self-worth.</p>
<p>For the most part, the deeply felt emotional losses are ignored when dealing with change or in debates about resistance to change. Most studies about corporate rationalisation, <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6486.2006.00593.x/abstract">focus</a> mainly on costs and the performance of the survivors.</p>
<p>Where emotions from change are studied, the focus tends to be on the loss of a job. But the subjective losses and subsequent emotional experiences of individuals tend to be underplayed.</p>
<h2>Grieving</h2>
<p>Profound loss is associated with <a href="https://doi.org/10.1080/15325020902724198">grief</a> – a deep sorrow that causes piercing distress. Although the experience of grief is common, there are marked differences in how intensely and for how long people grieve. It’s more intense when there’s greater degree of attachment to what was lost. The rational size of the loss isn’t relevant – merely the emotional intensity with which the individual experiences the loss. </p>
<p>Organisations tend to be <a href="https://doi.org/10.1080/15325020902724198">indifferent</a> and reluctant to acknowledge the intensify of loss felt by individuals. Often demonstrating, or talking about emotions is taboo, and when it happens it’s interpreted as resistance to change. The indifference and carelessness of executives can compound the experience of emotional trauma. In the minds of many, grief is associated with weakness, cowardice or even hysterical exaggeration. </p>
<p>As a result, many employees fear that they’ll be seen as weaklings or disloyal if they show their hurt and pain. </p>
<p>When grieving is denied or discouraged, repression or suppression is the only alternative. This leads to individuals being unable to engage with change, and can even cause other pathologies. <a href="http://www.emeraldinsight.com/doi/full/10.1108/02683940010305289">Research</a> has shown that restructuring, especially downsizings, instils in affected people intense fear, anxiety, distrust, , perceptions of betrayal and rejection. These tend to transpire into lack of focus and higher rates of absenteeism and turnover. And <a href="http://www.emeraldinsight.com/doi/full/10.1108/02683940010305289">occupational injuries and illnesses</a> are much higher at workplaces that goes through transformations.</p>
<p>A <a href="https://www.researchgate.net/publication/285875563_Healing_emotional_trauma_in_organizations_An_OD_framework_and_case_study">study</a> titled “Healing emotional trauma in organizations” describes how a group of executives were negatively affected. This is after they went through a restructuring that logically should have caused no distress. But they were unable to look forward to plan their strategy as they remained stuck in emotional trauma of the restructuring.</p>
<h2>What can be done</h2>
<p>Executives can’t expect employees to leave their emotions at the door when they come to work. They must embrace people’s sense of loss and help them adapt to it if they want change to be successful. </p>
<p>Organisations must build systems that ensure grieving and mourning are allowed so that employees can heal and move on through and past the change. </p>
<p>To ease the pain that comes from change, loss and pain must be publicly acknowledged and mourned in the organisation. Sharing destigmatises the loss and grief as the bereaved employees find validation from peers and managers through their narratives. </p>
<p>This must happen in a safe space, without logical explanations, platitudes or superficial suggestions. In the <a href="https://www.researchgate.net/publication/285875563_Healing_emotional_trauma_in_organizations_An_OD_framework_and_case_study">case study</a>, a group of executives felt healed and prepared for the future after the opportunity to tell and share their stories. The anomaly is that nothing has changed rationally or logically to their situation, but psychologically they would be able to move on. </p>
<p>If safe and constructive environments are created, employees won’t find it necessary to vent their emotions in the passages, around the water cooler or in tea rooms.</p><img src="https://counter.theconversation.com/content/78547/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mias de Klerk does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Many large scale organisational changes end up as failures most of the time employers are blamed for being resistant to change. This may be convenient, but it doesn’t deal with the real issues.Mias de Klerk, Professor: Organisational behaviour, human capital management, leadership development, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/459842015-08-12T05:38:21Z2015-08-12T05:38:21ZGoogle becomes Alphabet in effort to keep the innovative spark alive<figure><img src="https://images.theconversation.com/files/91480/original/image-20150811-11107-wlqcc6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Google: no longer just a search engine.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/mwichary/3374813066">mwichary/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>In the corporate world you learn quickly that if small companies want to collaborate, it tends to happen, while efforts to collaborate with large companies may involve many meetings and involve many people with no guarantee anything will come of it. Small companies innovate as they need to; big companies are often risk averse.</p>
<p>Google’s announcement that it is to reorganise under a new parent company, <a href="https://abc.xyz/">Alphabet</a>, is a step towards overcoming this sort of bureaucracy and maintaining the fiercely innovative and daring streak that has until now been its trademark. </p>
<p>Large companies have more freedom to ignore their end users, preferring secrecy from fear of having their ideas stolen, and instead focus on large stakeholders. This means that they often create products that are too wide in scope and which fail to address specific needs. </p>
<p>For smaller businesses, innovations are part of the way they engage with customers. Rapid prototypes are released, and assessed to see what works and what doesn’t. These prototypes are then scaled up and made relevant to a wider range of potential customers. Despite its enormous size and wealth, this is also the approach that Google favours. </p>
<p>Too often large companies don’t trust their engineers to make sensible judgements on business decisions. This probably shouldn’t be the case, as often the most successful technology companies are run by those who worked up through a technical role. Companies such as <a href="http://gizmodo.com/5634378/the-hp-way-how-bill-hewlett-and-i-built-our-company">Hewlett Packard</a>, <a href="http://business.time.com/2012/04/25/why-apple-wins-innovation-opportunity-and-execution/">Apple</a> and <a href="https://hbr.org/2008/04/reverse-engineering-googles-innovation-machine">Google</a> made their names through being technically excellent, rather than a narrow focus on business objectives.</p>
<p>Google’s move effectively splits one monolithic company into several smaller companies wholly owned by Alphabet, of which Google is the largest. In this way, Google (or should we say, Alphabet) hopes to keep each of its areas of focus small, fast, and innovative.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/91495/original/image-20150811-11110-1g539jq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/91495/original/image-20150811-11110-1g539jq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=360&fit=crop&dpr=1 600w, https://images.theconversation.com/files/91495/original/image-20150811-11110-1g539jq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=360&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/91495/original/image-20150811-11110-1g539jq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=360&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/91495/original/image-20150811-11110-1g539jq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=453&fit=crop&dpr=1 754w, https://images.theconversation.com/files/91495/original/image-20150811-11110-1g539jq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=453&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/91495/original/image-20150811-11110-1g539jq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=453&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">G is for Google. Let’s hope M isn’t for mistake.</span>
<span class="attribution"><span class="source">Alphabet</span></span>
</figcaption>
</figure>
<h2>Risk averse</h2>
<p>After all, Google is not just a search engine any more. It has expanded in many directions, from <a href="http://www.projectara.com">mobile phone design</a> and <a href="https://www.android.com/">operating systems</a>, to <a href="https://nest.com/uk/">smart home control kits</a>, <a href="http://www.google.com/selfdrivingcar/">automotous cars</a>, <a href="https://www.google.co.uk/maps">geomapping</a>, and <a href="http://www.google.com/loon/">off-the-wall projects</a>. It is comfortable trying things out and dedicating the resources to ideas with potential. </p>
<p>This risk-taking is a <a href="http://www.zdnet.com/article/the-google-culture-microsoft-doesnt-get-risk-taking/">key part of Google’s innovation infrastructure</a>, giving independence of thought to staff and technical leaders without over-burdening them with business issues. In fact, it’s similar to a traditional academic research model, where academics with good ideas get the resources that allow them to drive them forward. Done well, the university becomes a leader in the field, just as Google has become a technology giant.</p>
<h2>Small works in software</h2>
<p>Google wants to attract the best staff into research labs, and achieves this by creating a small-company infrastructure where engineers are not burdened by bureaucracy. However, unlike smaller businesses, Google has the deep pockets to support its staff. A rising star can be given responsibilities without the need to progress through a formal hierarchy.</p>
<p>After all, the structure of large companies may limit their ability to produce useful software – take for example the many major government IT contract disasters, such as the <a href="http://www.theguardian.com/society/2013/sep/18/nhs-records-system-10bn">£10 billion spent on an NHS IT system</a> that ultimately never worked.</p>
<p>What would a small company have done differently? It would have invested time in searching for the best solution, created and tested prototypes, and used those as a basis for the final product. The large companies involved in the NHS contract had off-the-shelf solutions, which they pushed without questioning their suitability. Too much money was spent on design and requirements analysis, and it was years before the product reached the clinical staff, by which point it was a computer programmer’s dream but a nightmare for the intended user. </p>
<h2>Reputations built on people</h2>
<p>Leading universities generally have individuals to thank for their success – for examples cryptography at Royal Holloway, led by <a href="http://www.ma.rhul.ac.uk/node/341">Professor Fred Piper</a>, and the University of Edinburgh’s Informatics Group that thrived under the guidance of <a href="http://www.inf.ed.ac.uk/students/prizes/sidney_michaelson.html">Professor Sidney Michaelson</a>.</p>
<p>So big companies need to act like small ones and provide opportunities for innovation and risk-taking to thrive, where individuals who do not want to conform to strict rules and procedures can take on their vision of the future. After all, Apple was a garage company once, and Microsoft had to <a href="http://forwardthinking.pcmag.com/software/286148-the-rise-of-dos-how-microsoft-got-the-ibm-pc-os-contract">borrow someone else’s operating system</a> (known as 86-DOS and purchased from Tim Paterson of Seattle Computer Products) to get a foot on the ladder. </p>
<p>Google’s enormous impact is mostly down to the creativity of individuals, its image still one of a bunch of software developers who just love to write code – not easy for a company whose products increasingly find places in almost every web user’s life. Let’s hope that the creation of Alphabet protects the small-company ethos that has made Google great.</p><img src="https://counter.theconversation.com/content/45984/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bill Buchanan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Google has become a technology giant, but it’s trying to keep its small-company ethos alive.Bill Buchanan, Head, Centre for Distributed Computing, Networks and Security, Edinburgh Napier UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/426862015-06-04T20:09:39Z2015-06-04T20:09:39ZThe Terminator as boss: why mass sackings don’t work<p>Malaysia Airlines recently appointed a new CEO, <a href="http://www.smh.com.au/business/aviation/malaysia-airlines-terminator-begins-hard-reset-20150601-ghe9ut.html">Christoph Mueller</a>, to turn around its failing fortunes. After the dual tragedies of 2014, and even before, the organisation has been struggling. Its traumatised employees have had much to deal with, but even they were probably surprised to be fired en masse last week.</p>
<p>Living up to his nickname “The Terminator” (earned as CEO of European airlines) – Mueller terminated all 20,000 Malaysia Airlines staff before offering a lucky 14,000 new contracts to rejoin the downsized firm. His intentions are certainly clear - his way of turning around the organisation is to remake it from the ground up, according to his own predilections. There is no sense of collaborative decision making or plurality. Nobody can have any misunderstanding of who is the boss.</p>
<p>The aviation industry is more prone to this type of “shock therapy” than most. Legacy carriers like Malaysia are confronted at home and abroad by new airlines with radically different internal economies. Malaysia Airlines has the misfortune of being co-located with Air Asia, one of the world’s fastest growing low cost airlines.</p>
<p>The airline’s owner and board hope that Mueller will turn things around - but experience and <a href="http://sloanreview.mit.edu/article/which-way-should-you-downsize-in-a-crisis/">much evidence suggests</a> his dramatic actions are likely to fail.</p>
<h2>Willingness to fire</h2>
<p>In the 2009 romantic comedy cum drama, “Up in the Air”, George Clooney’s character Ryan Bingham flies around the US firing people – a task that those peoples’ bosses find unsettling. Happily able to distance himself entirely from the human consequences of his job, Bingham’s life obsession is reaching ten million frequent flyer miles and securing an uber rare frequent flyer card from American Airlines.</p>
<p>It is fiction, of course, in most elements of detail. For example, generally American managers have no problem firing people, and have been doing so with gusto for decades. <a href="http://www.ft.com/intl/cms/s/0/23160d12-9779-11e0-af13-00144feab49a.html#axzz3byqJdADb">As an example</a>, in 2001 Cisco fired 8,500 staff in a downsizing exercise that saw morale in the company plummet. Since then Cisco has adopted a stronger “talent management” approach to handling layoffs and economic downturns, however long term damage was clearly done. As in all things, Australia and indeed much of the rest of the world follow closely and invariably US trends. Downsizing is a <a href="http://www.emeraldinsight.com/doi/full/10.1108/IJM-04-2013-0076">central element of corporate cultures</a> in most western nations.</p>
<h2>Chainsaw Al</h2>
<p>The most celebrated corporate “toe cutter” in modern times is quite probably Al “Chainsaw” Dunlap. Dunlap made his name cutting a swathe through various US corporations. He went on to live in opulence in a Florida mansion reportedly replete with <a href="http://www.bloomberg.com/bw/magazine/the-stack-the-psychopath-test-by-jon-ronson-07212011.html">“sharks and lions and panthers and eagles and hawks, and a lot of gold”</a>. Clearly not in the business of challenging stereotypes, Al knew his place as King of the Jungle. </p>
<p>In a way, Dunlap’s unbridled behaviour was the entailment of American capitalist triumphalism central to Reagan’s America. Business is war - and while enemies are out there competing against us, they also work just down the hall. Those fired deserved no more than what’s legally necessary, while he deserved no less than the millions he was paid to transform his realms. </p>
<p>Dunlap, however, is a cautionary tale for those shareholders who made the mistake of trusting him - including Australia’s own <a href="http://www.abc.net.au/4corners/content/2009/s2711781.htm">Packers</a>. He was later permanently barred from serving as a director of a public company due to <a href="https://www.sec.gov/litigation/litreleases/lr17710.htm">fraud</a> and was cited as an exemplar of the modern <a href="http://www.forbes.com/sites/jeffbercovici/2011/06/14/why-some-psychopaths-make-great-ceos/">corporate psychopath</a>. This goes a long way to explaining his cavalier approach to those he employed - it’s likely the impact his decisions had on their wellbeing quite simply did not enter his mind. </p>
<p>Herein lies an interesting paradox – businesses are first and foremost groups of people. To survive in business, the first priority is the management of relationships. Treating your employees like cannon fodder might create some short term gain, but at what medium and long-term cost?</p>
<h2>The evidence</h2>
<p>The phenomena of downsizing has been well researched, and it is found to almost inevitably fail in any of its stated aims. </p>
<p>Meta-analyses of downsizing’s effects indicate that massive layoffs are bad for <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=952768">shareholders</a>, <a href="https://archive.ama.org/Archive/AboutAMA/Pages/AMA%20Publications/AMA%20Journals/Journal%20of%20Marketing/TOCs/SUM_2012.3/customer_uncertainty_downsizing.aspx">customers</a> and of course <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1467-8551.2010.00724.x/abstract?deniedAccessCustomisedMessage=&userIsAuthenticated=false">employees</a>. A <a href="http://www.researchgate.net/profile/James_Guthrie3/publication/211384719_Causes_and_Effects_of_Employee_Downsizing_A_Review_and_Synthesis/links/0deec5277b354d9dd8000000.pdf">major omnibus analysis</a> of recent empirical research concludes there are equivocal findings in relation to downsizing’s consequences - with negative impacts dominating. Survivors often feel guilt, especially if the processes involved in the downsizing have been arbitrary and unfair. </p>
<p>In essence, downsizing resets the relationships that are at the heart of every organisation in a negative manner - cynicism replaces trust, secrecy replaces candour and faithlessness replaces loyalty. What else could you possibly expect?</p>
<h2>A better way?</h2>
<p>A key problem with American business literature is that it is predicated on conflict. <a href="http://en.wikipedia.org/wiki/Porter_five_forces_analysis">Porter’s Five Forces</a>, for example, sees great gains to be had by weakening the relative position of your buyers and suppliers through any legal means. Workers are seen as an entity with innately conflicting priorities to shareholders. </p>
<p>Surely the way to build sustainable organisations is to treat all stakeholders with decency and respect. Rebuilding trust after downsizing is nigh impossible and so logically, downsizing is the antithesis of the organisational renewal it purports to be.</p>
<p>Managers seeking to turn organisations around would do better to try candid and open dialogue. They might not like where this leads, but at least they will secure honesty and commitment from the organisation’s employees, owners and stakeholders.</p><img src="https://counter.theconversation.com/content/42686/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rice is a member of the NTEU and the ALP.</span></em></p><p class="fine-print"><em><span>Nigel Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Malaysia Airlines is letting go 6,000 staff as it seeks to turn around its fortunes. But research shows downsizing on this scale doesn’t usually work.John Rice, Professor of Management, University of New EnglandNigel Martin, Lecturer, College of Business and Economics, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.