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Leadership after an organizational restructure.

by Ruth Tearle

It all seems so simple. Profits are down, so leaders decide to "restructure the organization."

unleash-the-magicBut an organizational restructure is like a giant wave, that engulfs everyone in its path. After the storm, the survivors of the job restructure are expected to ‘pick themselves up’ and ‘carry on as normal’. But the situation is far from normal. Because the rubble left behind after an organizational restructuring includes:

Survivors’ guilt amongst staff.

Many staff members feel guilty that they still have a job, while many of their colleagues don’t. Many resent an expectation that ‘they have to take on extra work’ left by those who have been retrenched.

Breakdown in trust

Many staff members feel that if an 'organizational restructure has happened once, it could happen again.’ They no longer trust the company, or their leaders. Many no longer believe they have a long term future with the company and are simply biding their time till the job market improves.

After a restructure the survivors are expected to carry on as normal. But the situation is far from normal.

Breakdown of their ‘identity’

For many people, their sense of identity and sense of personal power is tied up in the team they belong to, and the role that they play within the team. With a job restructure, many people find their teams are broken up and their roles are changed. Some are asked to work with new leaders, new team members, or join new teams. Many are no longer sure of what their role is.

Apathy and loss of personal power

As individuals grapple with their sense of identity, many lose their confidence and their sense of personal power. If a new sense of identity isn’t built, many stop caring - about the company, their teams or themselves. Apathy follows. Allowed to continue, people enter into a downward spiral of low energy,fear of taking risks, a lack of follow through, irritated customers and leaders, and even lower confidence and energy. A blame type culture flourishes amidst apathy.

Leaders feel the pain too.

Many leaders feel guilty about having got exciting new positions, whilst many of their colleagues have been retrenched. Some may feel guilty about having had to retrench their own staff. Some are upset about having to break up a team they had spent years building. Staff members, who are often angry about what has happened to them, often aren’t even aware that their leaders are human and are feeling the pain too. Many leaders don’t know how to rebuild trust, identity, and personal power in their new teams. Many go inwards. They try to deal with their feelings on their own. This results in internal stress and eventually weariness or illness.

The end result:

The end result of restructuring an organization is often a company culture in which people feel apathetic and negative. They are reluctant to take risks or to go the extra mile for their customers. As a result, they don't bother to deliver good service to their customers or to give anything more than they have to. "Why should they", they ask, "to the organization that hurt them and their friends?"

Initiatives such as customer service and innovation are first affected. Then customers become irritated by the apathetic service they are receiving and start looking for alternative providers. If leaders fail to address these issues quickly, it will show - in the company's market share and profitability scores.

See our member only guide (and links to OD interventions) on how to rebuild morale and focus after an organizational restructure.

See our one and two hour OD interventions in our OD interventions library. Use these mini workshops to help people to move on after a restructure, and to rebuild morale and teams.


See our info-graphic on the effect of a structure change on an organization.


You may also like:

  • Change management for organizationsA library of practical articles, guides, diagnostic tools, case studies, dashboards and solutions to use when doing organizational wide change.
  • Change management for teamsA library of practical articles, guides, diagnostic tools, case studies, dashboards and solutions to use when managing change in teams.
  • OD Interventions library Use the 1 and 2 hour interventions in this library on restructuring.

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