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A staggering 75% of organizational change endeavors fail to yield the results promised (Stanleigh, 2008). That statistic, applied to a business environment where mergers and acquisitions and downsizing have become the norm, means that huge amounts of money and human capital are wasted. Uncertainty management is a decisive factor in the success of any organizational restructuring.
Organizational Restructuring and Communication
So, what causes the best laid plans for organizational restructuring to fail? DiFonzo and Bordia posit communication strategies that fail to address employee uncertainty in the face of organizational change is the cause (1998). They point to the presence of an active rumor mill as a common characteristic among instance of failed organizational change, generating “an erosion of trust, lower employee morale, negative emotions, and decreased dedication to the corporation” (1998, p.296). It seems clear, then, that successful communication strategies help combat employee uncertainty and improve employees’ morale and feeling of being in control. (Nelissen & van Selm, 2008). In short, successful communication strategies effectively manage employee uncertainty.
Successful Communication Strategies
When it comes to developing an effective communication strategy to manage employee uncertainty in the face of organizational change, it is best to err on the side of more information, rather than less. Rumors abound when there is a lack of information about things that are important to employees (DiFonzo & Bordia, 1998). In situations when it is not possible, or prudent, to divulge information, candor is still the best option, say DiFonzo and Bordia, as the cost of withholding information could be worse than the consequences of divulging it (1998). “Employees may conjure scenarios that are often worse than reality and even attribute malevolent intentions to management. Management’s attempts at denying rumors and innuendo, at this point, are not likely to succeed, as they have lost the trust of employees” (DiFonzo & Bordia, 1998, p. 299).
Successful communication strategies also recognize that organizational restructuring and change management is a process (Stanleigh, 2008). Communication throughout the restructuring process is essential. Human resources can assist in the communication process by facilitating discussions between management and employees, and improving employees’ understanding of the restructuring initiative.
The scenario given is silent on the reasons for the organizational restructuring. However, the headcount before restructuring is 64 employees. After restructuring, headcount becomes 68 employees. Therefore, it is possible to assume that the restructuring is not a reduction in force. Further, since fully 1/3 fewer district managers report to each middle manager (regional director), one can posit that the change is needed to focus on customer satisfaction, not dwindling profits. Based on that assumption, I would recommend a variety of communication methods to address the restructuring.
Phase one – announcement. Phase one should consist of excitement-generating, attention-getting “teasers” that simply announce that a new plan for customer satisfaction is in the works. This can be done through a variety of media – paycheck stuffers, email, workplace posters, etc. The key is to introduce the change as a positive factor for all employees. Human resources and marketing can partner to develop the communications used in this phase.
Phase two – rollout. Phase two should be a synchronous announcement of the organizational restructuring made to the 64 affected employees. I would recommend that the employees be brought to the corporate headquarters to attend a two or three-day meeting. The announcement should be made on the first day, at the first meeting. At the announcement meeting, the reasons for the change should be given and the new organizational chart should be unveiled. Upper management and human resources should be on hand to answer questions relating to the reasons for the change. At the end of the meeting, each employee should receive an offer letter detailing the employee’s new position, compensation, and relocation package (if any) and an appointment time to meet with a human resources or management representative to discuss the employee’s position. Team building exercises should be a part of the meetings, with teams based on the new organizational chart.
Phase three – execution. Once the rollout has been announced, the execution phase should begin. Regional directors should meet with their new division vice presidents and district managers who are relocating should travel to meet their new subordinates. At the same time, the corporate president should make a multi-media announcement of the restructuring, perhaps via webcast and letter, to ensure multi-channel communication. Again, human resources and marketing should partner together to develop a consistent, upbeat and exciting message for the president to deliver. Additionally, human resources should designate a staff member to be a dedicated liaison between management and employees who have questions or concerns.
The key to successfully restructuring an organization lies in how management communicates the change and how it manages employee uncertainty. The plan developed relies on synchronous announcement to the affected employees to reduce the amount of time that employees are uncertain of their own individual fates. Further, having a one-on-one meeting with a human resources or management representative allows the employee to ask questions that the employee might otherwise be embarrassed to ask, and to receive individualized answers. This will minimize, if not eliminate, the amount of personal uncertainty that affected the employees have, allowing those employees to become change sponsors for the corporation. Lastly, having human resources and marketing develop all communication materials ensures that a legal and consistent, yet professional and exciting, message be delivered to all employees which will assist in managing uncertainty in the corporation as a whole.
- DiFonzo, N., & Bordia, P. (1998). A tale of two corporations: managing uncertainty during organizational change. Human Resource Management (1986-1998), 37(3-4), 295-303, retrieved from https://search-proquest-com.contentproxy.phoenix.edu/docview/224316267?accountid=35812
- Nelissen, P., van Selm, M. (2008). Surviving organizational change: how management communication helps balance mixed feelings. Corporate Communications: an international journal, 13(3), 306-318, retrieved from https://doi.org/10.1108/13563280810893670
- Stanleigh, M. (2008). Effecting successful change management initiatives. Industrial and Commercial Training, 40(1), 34-37, https://doi.org/1031108/0019785
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