Decisions about restructuring usually depend on models that show how different approaches might affect the enterprise, by projecting the values of organizational attributes such as net income, market share, or shareholder value. Although these projections rarely include attributes like employee anxiety or fear, such factors are truly important. They help to determine productivity, voluntary turnover, the workload of the people in Human Resources, and many of the attributes that the experts do model, albeit indirectly.
Most important, restructuring-induced fear can create a need for future restructuring, through a variety of paths, some of which are subtle and rarely identified. Here's Part I of an exploration of some of the less obvious mechanisms by which restructuring-induced fear creates a need for future restructuring.
- Degraded and disrupted relationships
- When we relocate people, eliminate positions, or merely change reporting structures, we disrupt relationships between people. Those who formerly relied on each other for advice, instruction, or services must sometimes find new contacts. Even the relationships that aren't totally eliminated can be degraded by restructuring-induced fear, in the form of competitive attitudes that can take hold when people come to believe that further restructuring is possible, and that everyone is in competition for a declining number of jobs.
- Although relationships between and among employees are valuable organizational assets, the value of these assets doesn't appear on financial statements. Unaware of the amount of these assets lost to restructuring, the depressive effects on results seem surprising to planners. The unexpectedly disappointing results can sometimes lead to further restructuring.
- Risk aversion
- When people believe that their When people believe that
their jobs are at risk,
their appetite for risk
in general declinesjobs are at risk, their appetite for risk in general declines. In effect, some people have difficulty keeping separate their own personal risk profile and the risk profile associated with their job responsibilities. This can affect the necessarily subjective judgments people make as part of their responsibilities, which creates a risk aversive approach to operating the enterprise.
- After experiencing several serial restructuring events, people in organizations that formerly had a healthy approach to risk can find themselves being overly conservative in their strategies and tactics, because they have begun to confuse their own personal risk experience with the risk experience of the organization. In this way, the organization can become so risk averse that it is no longer capable of accepting the levels of well-managed risk that are so necessary in today's market environments. These organizations then find that they can innovate only by acquiring innovative organizations, which is an expensive method for attaining market leadership. The resulting high costs and low yields sometimes lead to further need for restructuring.
 Weinberg, Gerald M. Quality Software Management Volume 1: Systems Thinking. New York: Dorset House, 1989. Order from Amazon.com
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More articles on Emotions at Work:
- When It Really Counts, Be Positive
- When we express our ideas, we can usually choose between a positive construction and a negative one.
We can advocate for one path, or against another. Even though these choices have nearly identical literal
meanings, positive constructions are safer in tense situations.
- Cellf Esteem
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- It's a Wonderful Day!
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Reviews can be painful. Here are some guidelines for making them a little fairer.
- Why Scope Expands: II
- The scope of an effort underway tends to expand over time. Why do scopes not contract just as often?
One cause might be cognitive biases that make us more receptive to expansion than contraction.
Forthcoming issues of Point Lookout
- Coming June 28: Tackling Hard Problems: I
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- In this Part II of our look at solving hard problems, we continue developing properties of the solution, and look at how we get from the beginning to the end. Available here and by RSS on July 5.
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- The Power Affect: How We Express Our Personal Power
- Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program. Here are some upcoming dates for this program:
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- Many people experience virtual teams as awkward, slow, and sometimes
frustrating. Even when most team members hail from the same nation or culture, and even when they all
speak the same language, geographic dispersion or the presence of employees from multiple enterprises
is often enough to exclude all possibility of high performance. The problem is that we lead, manage,
and support virtual teams in ways that are too much like the way we lead, manage, and support co-located
teams. In this program, Rick Brenner shows you how to change your approach to leading, managing, and
supporting virtual teams to achieve high performance using Simons' Four Spans model of high performance.
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- Baci Grill, 134 Berlin Road, Berlin, CT 06416: September 19, Monthly Meeting, Southern New England Chapter of the Project Management Institute. Register now.
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analysts, project sponsors, and project managers, the story is fascinating. Lessons abound. Read
more about this program. Here's an upcoming date for this program:
- CTCPA, 716 Brook Street,
Rocky Hill, CT 06067: September 20,
Full-day Workshop, Southern New England Chapter of the Project Management Institute. Register now.
- CTCPA, 716 Brook Street, Rocky Hill, CT 06067: September 20, Full-day Workshop, Southern New England Chapter of the Project Management Institute. Register now.