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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | JULY 25, 2000 SMART ANSWERS Thriving after Restructuring Communicating openly with staff can help smooth the way after a major organizational shift
Q: Our company is restructuring and moving into a new industry. With the paradigm shift in the organization, I envision that it's going to be tough to inculcate a new corporate culture. What do you advise? -- D.S., Kuala Lumpur, Malaysia A: The key to pulling off a restructuring and emerging with a whole new culture, experts say, is effective communication with all your employees. Assuming that the company you're building will still include the same people -- or most of them -- who now make up your organization, you must keep them apprised of your plans before, during, and after. Issues to consider: Will they still have jobs? What will their new jobs be? Will their co-workers still have jobs? Will they still have benefits? Are their salaries going to remain the same? Will they be working for a new supervisor, with new performance expectations? What will the new company be like? What will be its values and goals? "I have found that open communication is the best thing when it comes to these situations. Some executives buy into the idea of wanting to keep all the information to themselves, but if they treated their employees like the adults they are, they wouldn't have to carry the burden of all these decisions," says Ronnie Glaspie, a human-resources consultant with Sullivan International of Long Beach, Calif. "If you're honestly doing [the restructuring] for the betterment of the entire organization, there's no reason to fear letting the employees know about it. Don't make suspicious moves, or it will make the employees suspicious." ALLAYING FEARS. As soon as you announce a restructuring, a merger, or a buyout, your employees will believe that their jobs are on the line. "With all the negative emotions and the energy going into sending out resumes, no one will be getting their jobs done anymore," says Michael Wolff, marketing and communications partner at Richard A. Eisner & Co., a New York City-based accounting and consulting firm. Wolff advises owners to eliminate employees' fears by meeting with various departments in small groups and allowing them to ask questions about the company's future -- and their own. He often tells clients to use a kaleidoscope analogy when describing a paradigm shift in an organization: When you look inside, you start out seeing an intricate shape formed by brightly colored bits of glass. If you turn the kaleidoscope slightly, the same pieces are configured differently to form a new picture. So, when a company changes its industry or product focus, the structure of the organization and individual job duties may change, but its backbone of valued employees will remain. Get your employees' input about integrating a new corporate culture. Ask for their ideas and be sincere about listening and responding to their suggestions, even if you can't use them all. "Make them a part of the process, and you'll gain their trust," Wolff says. You must also budget for training programs for all your employees, so they can learn about the new industry and the new company, and become a communications vehicle for your corporate culture, able to explain what your priorities are and how they fit in. Says Wolff: "You want to put a positive spin on the whole process, so your people are leaving at the end of the day thinking about what's on the plus side in this changing environment, not what's on the negative side." Have a question about running your business? Ask our small-business experts. Send us an E-mail at smartanswers@businessweek.com, or write to Smart Answers, BW Online, 46th Floor, 1221 Avenue of the Americas, New York, NY 10020. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.  By Karen E. Klein  | | |
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