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Friday, 25 December 2009

The Value of Structure

Most of my musings on this web log is focussed more on economic themes and ideas.  However, today I want to turn my attention more to the value question related to corporate structure and the importance and significance that structure can play in change management and the behavioural aspects around a corporate restructure.

Recently I was involved at an organisation that had admirably survived the credit quake of 2008 – 2009, without any serious casualties.  No redundancies had been made during this period, as the focus very quickly turned to managing and controlling overhead costs.  Trading volumes and values had been severely affected, with a significant dent to the gross contribution line, however the pipeline of new product launches kept supplementing the existing strong product proposition.  There had just been slight deviation in overall underlying profitability due to a loss of focus on the customer.  This was mainly due to the corporate structure not servicing the market in the most effective way possible.

It took a few months for the group leadership to realise this, but once the challenge was recognised, the cogs of corporate restructuring was set in motion.

And this is exactly the root of another problem scenario:  ‘Corporate Inertia’.

I find it very sad and demoralising when employees who have served their corporate masters very well and over many years come up with phrases like: “...I am just waiting for my cheque...”, referring to the expected windfall from a redundancy package.

But, I have digressed enough. 

Structure sends a very powerful message.  Delay causes uncertainty and frustration.  Invisible leadership causes the ship to list wistfully and wastes opportunity.

As a very poetic Felix Dennis once stated in his poem “How to get Rich”:

‘But take it from me,
Execution is key’

So the real value in structure is by minimising the opportunity cost of wasted time.

Employee motivation is a very difficult thing to reinvigorate, once the ship has listed woefully.

My simple massage in any corporate restructure and change management effort is this:

Do it fast, effectively and be visible and accessible as a new leader taking on the responsibility of managing the division for value.  Time is short, energy a precious commodity which should not be wasted by focussing on the right things at the wrong time.  Some reflection, a slight pause to catch ones breath is permissible; but do not forgo the opportunity to get everyone on board and in the right seats once the bus leaves the stop...

theMarketSoul ©2009

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