Unnecessary reorganizations can ruin a business—or a great team. The Chicago Bulls dethroned themselves from basketball greatness in 1998, but offer business leaders some important lessons.
Phil Jackson, Head Coach for the Chicago Bulls talks with his players #33 Scottie Pippen and #13 Luc Longley during Game 4 of the NBA Eastern Conference Semi Final Playoff game on May 10th, 1998 in Charlotte, North Carolina. Photo: Getty Images
In 1998, the then-dominant Chicago Bulls completed their second NBA championship three-peat in a decade. After their historic win, Jerry Krause, the GM, decided he wanted to rebuild the team. To put that in context, the Bulls were a six-time championship team led by Michael Jordan, Scottie Pippen, a host of Hall of Famers and Hall of Famer contenders, and Hall of Fame coach Phil Jackson.
If you watch the “The Last Dance” in ESPN’s 30 for 30 documentary series, Michael Jordan wanted the team to stay intact so they could try for a four-peat, which had never been done in the NBA, but the front office insisted on doing the rebuild. I never understood why you rebuild something that was clearly working, and when I think about the world of work, I’ve been in organizations that do reorgs for the sake of doing reorgs. And much like the Bulls 1998 rebuild, I wonder why the reorg is being done.
I remember a quote: “All movement is not progress.” I sometimes see reorgs done as an effort to make a movement, but they often result in little progress. I’ll give a real example—an organization I worked for did several reorgs but could never fully explain the “why,” and it indeed never manifested in the “how” and the “what.”
The CEO was exhibiting a facade of executive management, making changes that were not well thought out—the basis for the changes was never grounded in business sense. A successful reorg requires clear communication, strategic planning, and thoughtful implementation, focusing on both the business needs and the employee experience. It should emphasize ongoing communication and adaptation, and most importantly, follow through to ensure we reach the intended destination.
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At the time, numerous people shared with me that they had four or more different managers within 12 months, making it difficult to have an impact. The constant leadership changes led to inconsistent guidance, shifting priorities, and a lack of stability. For lack of a better phrase, it was utter chaos.
One of the essential skills you need as a leader is handling change management, and a reorg is one of the most significant upheavals you can ask an organization to go through, so you’d better have a darn good reason for doing so. Is it for efficiency gains? Is it to launch a new product? Is it to achieve greater market penetration? To improve your business’ chance of success, first look at your end goal, work backward from there, and design your reorg accordingly.
To get a reorg right, keep it simple. Identify the who, what, where, how, why, and when? If you can’t define those six things, you should go back to the drawing board and think again. When doing a reorg, those elements should be explained and clearly articulated. You need to get buy-in from the leaders. There should be a clear business rationale for doing so. You need to prepare the staff for the pre-and, most importantly, the post-reorganization environment.
I’ve seen many organizational transformations, and the worst reorgs were full of information about what to do ahead of the big change, but very little guidance on goals for a post-reorg environment. I would argue that’s the most critical aspect of any reorg—helping people through the change curve and ensuring they can deliver on the vision you laid out and the vision you got buy-in from. If you do not focus on the eventual goal of a reorganization, then the exercise is all for naught, and six months to 12 months to 18 months from now, you’ll be doing another one, likely with the same low odds of success.
Five Keys to a Successful Reorg
When a reorg is truly necessary, follow these proven steps to ensure success:
Build a compelling business case. When Satya Nadella reorganized Microsoft to focus on cloud and mobile, he first gathered support from his leadership team by involving them in strategy sessions. These sessions allowed them to shape the new direction, making them advocates rather than obstacles. Nadella could articulate precisely why the change was needed and how it served the company’s long-term goals.
Secure authentic buy-in. Before announcing changes, involve key stakeholders so that they can become supporters. Getting their early input and approval can transform them from detractors to advocates.
Prepare a comprehensive communication plan. Develop messaging that addresses concerns at all levels of the organization. Procter & Gamble’s 2013 reorganization under A.G. Lafley serves as a great example. The process included town halls, written communications, department meetings, and one-on-one sessions that allowed employees to understand how changes would affect them personally and professionally.
Invest heavily in post-implementation efforts. When Cisco reorganized its engineering department from a siloed structure to a cross-functional model in 2008, it created transition teams responsible solely for monitoring progress, addressing issues, and ensuring the new structure delivered its goal. Those dedicated transition teams helped people through the change curve long after announcements.
Measure and adapt. Create feedback mechanisms to continuously refine the new organization based on what’s working and what isn’t — I typically look at engagement scores, productivity, operational efficiency and retention rates. There are numerous elements that can be measured but it’s essential to closely monitor those identified metrics, if not, things can go off the rails because you neglected to see how it’s going.
Reorgs need to be structures built to last, not temporary scaffolding. They require adaptive intelligence: understanding how the changes look on an org chart and how they’ll benefit the business for years to come. A ham-fisted approach to restructuring damages more than morale — it undermines the whole foundation of what made organizations successful in the first place: institutional knowledge, team chemistry, and forward momentum.
The Bulls never returned to their championship glory after that fateful 1998 decision. And the way things stand now—mired in the middle of in the Eastern Conference with a less than .500 record and the playoffs looming—they won’t be hanging banners any time soon. Sometimes the best reorg is the one you never do.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
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