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Restructuring? Avoid the myths.

Restructuring? Avoid the Myths

Many companies are restructuring to more effectively meet such challenges as shortening product life cycles, rapidly evolving technology, and intensifying, often multinational competition. But healthy corporations don't restructure on a regular basis, so the process is usually an unfamiliar one. As a result, firms often make mistakes along the way.

One common mistake is overlooking the value of communication. Handled well, communication to employees, customers and the community about an impending reorganization can dramatically improve the project's potential for success. Handled poorly, however, communication can generate resistance, reduce employee commitment, and place an otherwise beneficial restructuring plan seriously at risk.

Unfortunately, certain myths have arisen about what constitutes good communication during a restructuring. Here are six of the most prevalent of these myths. For each, we'll expose the inherent fallacies, then suggest how a company can avoid the dangers when designing its own restructuring communication program.

MYTH NO. 1: "What Our Employees Don't Know Won't Hurt Them."

Certainly what your employees don't know can't be a source of concern to them. But it's usually next to impossible to keep reorganization plans quiet. And once word leaks out, what some employees don't know, they'll make up. Such rumors probably won't help your reorganization efforts. In fact, an atmosphere of openness and a willingness to communicate even unpleasant truths is far more likely to help maintain employee productivity levels and minimize the anxiety and sense of insecurity that usually accompanies the initiation of a reorganization.

This doesn't mean, however, that you should air every detail of the restructuring plan as it develops. Management cannot--and should not--make all of its decisions in a public forum. Instead, open communication simply means that a reorganizing company should regularly supply sufficient accurate information so that employees will understand why the company is restructuring. Later, this may include helping employees comprehend how the reorganization affects them and what their roles will be in the new order.

MYTH NO. 2: "Before You Communicate with Your Employees, You Need to Have All the Answers."

You probably won't ever have all the answers, even on the day you announce your restructuring plan. And if you wait too long to communicate, employees will already have plenty of information--or misinformation--from the company rumor mills. What's more, your company may never be at a point where it can wrap a complete and final restructuring plan in a neat package and present it to employees. The reorganization will almost certainly be an evolutionary process rather than a one-shot event, because the market, the economy, and the business environment are continuously changing.

The best strategy, then, is to communicate what you do know to your employees as soon as you can. It's especially important to tell them (1) why the reorganization is taking place, (2) how it will be accomplished, (3) whether or not layoffs could result, and (4) how employees can contribute to the process. In most cases, if you're not quite sure what the answers are or what the results will be, an honest "we don't know yet" is better than silence.

Naturally, the most important question for each employee will be, "How will the reorganization affect me?" The sooner you can answer that question, the more likely you are to win employee cooperation and the more succesful your project will be.

MYTH NO. 3: "Employees Would Rather Not Hear about a Restructuring Until It's about to Be Implemented."

This myth actually contains a grain of truth. In a few cases where management has communicated restructuring plans well before the event took place, some employees have said--only half jokingly--that they would rather not know what was going on and not have to worry about it until after the "dirty deed" was done.

The irony is that, even without formal communication, these employees probably would have learned about the reorganization anyway, from colleagues eager to pretend to have some knowledge of the coming changes. There will always be some hearsay, but you can mitigate its negative effects by establishing a communication program that provides all employees with access to the same basic information. In addition, if you explain your company's strategy and position directly to your employees, you can present the information in such a way as to retain credibility.

In fact, not only is it helpful to communicate freely, it is often beneficial to repeat the same messages several times. Where extensive reorganizations are planned, employee reaction is likely to follow a well-documented pattern found in all major psychological adjustments: Shock, defensive retreat, acknowledgement and acceptance. As workers pass through these stages, you should reiterate your company's plans and goals, reminding employees that certain things will remain constant. Equally important is bringing home the reality of the impending reorganization so that employees have the time they need to plan for their futures.

MYTH NO. 4: "We Don't Need to Involve Our Employees in the Restructuring Effort."

Almost invariably, the greater the opportunity employees have to contribute to the reorganization process, the greater is their level of acceptance of the ultimate result. A positive attitude on the part of the work force also seems to encourage the approval of regulators, stockholders, customers, and the public at large.

Direct involvement of individuals who have worked in the company for a long time can provide insights into the inner workings of the organization that might not be readily apparent to an outside consultant or even senior management. And employee-generated recommendations for change will be easier to implement than those imposed by management.

The most successful major reorganizations usually include these elements: . a written survey of employees to solicit their ideas . follow-up interviews with a large sample of selected employees . meetings with employees to discuss the restructuring process . regular interaction with union representatives to discuss progress and possible alternatives.

MYTH NO. 5: "It Makes No Difference What We Tell the Media about Our Plans--In Fact, We Don't Need to Tell Them Anything."

In the absence of timely communication from you, members of the media may report information obtained from someone in your company who does not have all the facts. Accordingly, it is important to have a media plan (a strategy for what should be communicated), and a designated spokesperson to release accurate and consistent messages.

The best procedure for dealing with the media is to communicate with them honestly and regularly. And don't panic if bad news appears unexpectedly. In the case of one large company, a local television station reported, long before any plans were finalized, that "several hundred employees" would be laid off in proposed restructurings. Instead of making outraged denials, the company calmly provided a statement that described the nature of its efforts to date and pointed out that no decisions about staff had yet been made. When it ultimately announced that the layoffs would amount to less than 60 employees, the company was applauded by members of the community and the media for its levelheaded action.

MYTH NO. 6: "Let Employees Think Our Outside Advisors Are the Primary Force behind Our Project"

Many restructuring firms hire outside advisors to help with what is a complex and difficult process. But most reorganizations are unpopular. It is tempting to let these outsiders become the visible purveyors of the project, communicating--and taking the heat for--unwelcome decisions.

In fact, however, employees may find the project harder to accept if it appears to be designed by outsiders. And a convenient scapegoat may lead some managers to develop a negative attitude as well. Rejection of the project by both management and workers can sometimes result in companies backing down from controversial restructuring concepts that might have been greatly beneficial.

Outside assistance may well be of value in your reorganization, providing guidance and the benefit of experience. But, to be fully effective, the project should be clearly perceived by employees as the company's idea, conducted largely by company personnel with input from company employees. And the firms should accept full responsibility for the project's success.

Without good communication, a restructuring plan--no matter how necessary or reasonable--won't achieve all of its goals as quickly as it otherwise could. A well-thought-out communication program will help a firm to enlist the aid of its work force and make employees feel as though they are key members of a team planning for their company's future.
COPYRIGHT 1989 International Association of Business Communicators
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:effects on employees of company restructure
Author:Hickel, James K.
Publication:Communication World
Date:Apr 1, 1989
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