Restructuring the Right Way

by Peter B. Grazier

Originally Published in EI Network August 1, 1996


As the "Restructuring, Reorganizing, Downsizing" craze continues, I thought it might be appropriate to write a sample letter that organization heads might send to their people as they embark on this journey. I will admit to a certain bias in favor of a "high-involvement" process, but then, what has corporate America been touting so highly for the last 20 years?


MEMO

FROM: The Chief Executive Officer

TO: All employees

SUBJECT: The Need to Restructure Our Work

The Context
As many of you are probably aware, these are times of great change for businesses and governments. Barriers to international trade are falling, new markets are emerging in what were previously called "Third World Nations," customers are demanding the highest possible quality in our products and services but want these at "bargain-basement" prices, and our competitors are working harder to increase their market share (at our expense, of course).

The executive team and I have been discussing the need to re-think the way we work in this new business environment. We have raised many questions, and a few answers, but feel this discussion is much too large for us alone. The work of this organization is comprised of many thousands of individual processes, too intricate and detailed for a few people (in particular, the executive team) to truly understand, let alone improve. Therefore, we need to involve all of you in this dialogue.

Some of the questions we are asking ourselves are:

  1. Why does a business exist?
  2. Who does it serve?
  3. Is it possible to never lose a customer?
  4. What would perfect quality look like?
  5. Is this a fulfilling place to work?
  6. How much waste do we have in our processes right now and how do we find and eliminate it?
  7. How many ideas for improvement exist in our organization right now?
  8. How could we reduce our overhead costs by 20% in the next year without hurting people?
  9. Could our people manage their own work without several layers of "controllers?"
  10. If someone came up with an idea that eliminated his or her job, how else could we use their talents?
  11. If we found that streamlining our processes eliminated lots of jobs, are their new ways to use people effectively that we've never considered?
  12. How could we cut our order-to-delivery cycle time in half in the next year?
  13. Are we being environmentally responsible?
  14. Does our organization have a role to play in the community?

You need to know that this list contains only a few of the questions that the executive team is discussing at this time. My hope is that you will get a sense of the breadth of issues facing us and the obvious need for your help in finding solutions.

Your Involvement
As we begin to discuss how to improve our work, there are a number of ways you might convey your thoughts and ideas to us.

First is simply to write us with your thoughts on these subjects. With your permission, I would include your thoughts in our monthly newsletter to get the widest dissemination of views. Hopefully, these thoughts will be a catalyst for "water-cooler" discussions that will generate even better ideas. I would not only like to create these discussions, but also report on how the issues are being resolved. Someone once told me that the only good idea is an implemented one, so we should work hard to put these ideas into action.

Second, I would encourage each work group to begin discussing among themselves how we can make our work processes more effective and efficient. As you progress, let the executive team and me know how you are doing. We will be making visits to work groups to see what you are developing, any barriers you are encountering, and how we can help.

Third, I plan on conducting a weekend retreat at an offsite location for anyone interested in participating directly in this change process. At this offsite gathering, anyone with an issue will be given time (about 1-2 hours) and a meeting space to discuss their issue with other interested people and develop possible solutions. This process is open to anyone on any issue. In this manner, I hope to get to the problems and improvement opportunities that you deem most important.

Fourth, I plan to spend more time wandering around our organization talking with you. Sometimes I get caught up in too many meetings and lose sight of the real work being performed here. In this way I can get more direct feedback from you on what we should be doing to improve our organization.

Fifth, I would like to form a number of task forces to tackle subjects such as waste reduction, radical process change, new product development, cycle time reduction, innovative marketing, creative use of talent, paperless work, employee needs, using technology effectively, and others. I will be soliciting volunteers who have a high interest in these subjects. Also, if you have any idea for a task force, let me know.

Sixth, at least once each quarter I will have an offsite dialogue with all of our management people through first-line supervisors. At these sessions we will address two or three key improvement opportunities by using the small group discussion format. To get everyone involved, however, we will publish these topics in advance so that you may give your supervisor or manager your thoughts prior to the meeting.

My Commitment to You
As we begin our dialogue, I know there will be many who will question my motives. American business today is littered with broken promises and massive layoffs. As we have grown, we have accumulated waste in our work systems, resulting in a need for more people to do the task. But this is management's fault, not yours. We have been the ones in control and making the decisions.

Therefore, you have my promise in writing that none of you will be laid off if your job becomes obsolete as a result of this process. We are profitable and our customers and markets are still intact. We have the time to rethink the way we work without hurting the people we have depended upon for so many years.

Besides, it would be narrow-sighted on the part of management to lay off people when there is so much to be done. There are projects that have been on the back burner for years simply because we did not have the people to work on them. Freeing up people will allow us to begin tackling these issues.

Information to Help You
To help you as you look for areas to improve our organization, attached is a detailed listing of last year's costs and revenue sources, our latest customer feedback, and a report on defect sources for our various products. If you are going to make good decisions about our work, then you need to know what we in the executive team know. I simply ask that you handle this information responsibly and consider it confidential.

As I close this memo, let me say that I know the process I am beginning may be somewhat uncomfortable for all of us. We have been reared in a system where managers made all the decisions and frontline people did as they were told. We all have learned this system well.

But now is the time for all of us to begin looking at each other as responsible adults. How can we collectively make this organization the best it can be? How must we change our traditional ways of thinking to move forward with improvements that will assure our place in the future? These are the questions that must dominate our thinking in the coming years.

I know that the process I have outlined above for restructuring our organization will not play well on Wall Street. The analysts and stockholders seem to prefer that CEO's take an approach that sacrifices people for efficiency. I feel that the people create the efficiencies when the system allows it. I said a few years ago that "our people are our most important asset." I meant it then, and I still believe it today. We're in this for the long term good of our organization...not tomorrow's stock price. And I believe strongly that if each of you direct your talents and abilities toward improving our work and work environment, we will come very close to being the best we can be.

I invite your comments on this approach and look forward to our future discussions.