London Business School: Re-org is its Own Reward

Last Updated Jun 11, 2008 5:53 PM EDT

  • Reshuffle: An end unto itself?The Find: One professor thinks you don't need a good reason to reorganize your departments -- a reshuffle is an end unto itself.
  • The Source: The "Random Rantings" blog of Freek Vermeulen, Associate Professor of Strategic & International Management at the London Business School.
The Takeaway: Vermeulen uses his blog to relate a tale from his early days as a consultant. One day Vermeulen and his colleagues were happily grouped into departments like "strategy" and "HR" and the next word came down that everyone would be reorganized by industry: consumer goods, heavy industry, professional services, etc.

What good was the change? Not much at all, as far as anyone could tell. So that's a giant waste of time and effort, you're thinking. But Vermeulen disagrees. His position:

"Dragging everyone through a hefty reorganization is exactly what you should do (every now and then), even if it is unclear why."
Why? As an antidote to employees becoming too comfortable with too narrow a selection of fellow employees. Organizations can be organized geographically, by function or into product teams. It's a somewhat arbitrary choice that can solidify through habit and limit creativity and communication. Then it's time for a little creative discussion.
Break up the old functional departments and, for instance, put them all together in departments defined by product (or whatever). The employees won't like it, because they think these other folks are a bit weird (if not dumb and whining) and they will tell you they felt quite comfortable in their old functional departments â€" which is precisely the reason you should change them!
Once people become comfortable in their groups, stop communicating and coordinating with others outside their department, and fail to see others' perspectives, it is time to turn them around.
The Question: Lunacy or a a stroke of genius?

(Image of shuffle by Johny Blood, CC 2.0)

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