Hobart’s Blog – Restructuring Is Insane! by Marc Townsend #1

Topic: Overview

Marc: Thanks so much for agreeing to meet with me to talk about why restructuring is insane. Your words, not mine.

Hobart: I stand by them. How long will this take?

Marc: Well, how much do you have to say?

Hobart (laughing to himself): Okay, we’ll be here awhile.

Marc: I know this is a big topic and it will take us some time to cover. We’ll do this in short interviews to make it easier on you.

Hobart: Good.

Marc: Could you describe this “insanity” for me?

Hobart: The insanity is that leaders are moving boxes around on the organizational chart to solve organizational problems. When that doesn’t work, they move the boxes around again in two or three years, but that only creates new problems and doesn’t solve the current ones. They do this again and cause even more problems, and so this happens again, and again, and again It’s like they are mice running around on a restructuring wheel, around and around they go. Isn’t that Einstein’s definition of insanity? The current approach to restructuring is insane.

Marc: Why do they keep doing the same thing over and over again?

Hobart: Organizations are trying to solve the problems they have with the one tool they know how to use, a sledgehammer. And no matter what the problem is, they smash it with the sledgehammer. If that doesn’t work, let’s hit it again. As we get further into these discussions, I’ll explain why restructuring is like taking a sledgehammer to an organization and why it just creates destruction and chaos.

Hobart: They are stuck in a very old organizational operating system, and part of that operating system contains a set of rules about how you structure an organization. Your audience probably doesn’t think in terms of operating systems; they may be asking, what the heck is that? The operating system of an organization is similar to a computer operating system, but instead of running a computer, it runs an organization.

Marc: So, are you saying that the operating system that most leaders are using to guide their restructuring efforts is out-of-date?

Hobart: That’s exactly what I’m saying. The operating system that drives most organizations is vertically focused. It’s hierarchical. It creates a hierarchical culture, a culture of power over others. It’s this hierarchical thinking that leads to moving boxes around on the org chart, because after all what is the org chart? It’s a chart of the hierarchy.

Marc: So, if the current operating system is out-of-date, there must be a more up-to-date system to replace it.

Hobart: Of course. It’s one that is horizontally driven and isn’t based on having authority to lead. We call it Matrix Management 2.0™ or MM 2.0™ for short. Operating systems are a technology, a technology for running an organization. If you are using an out-of-date technology, you’re not going to be as competitive as someone using the most up-to-date technology. If you’re using the old, vertically-focused technology it’s like everyone in your organization is using typewriters instead of computers. How progressive is that?

Marc: Obviously, that’s absurd.

Hobart: You would think so. The Vertical Management Operating System was created in the 1950’s. That’s over 60 years ago. Think about other technology of the 1950’s and then think about running your organization using that technology. Just because you can’t see a technology doesn’t mean that it doesn’t exist or that it’s not having an effect.

Marc: Why would really smart organizations, really successful ones, be using such out-of-date technology? Hobart: Lots of reasons. For one, that’s what the big consulting firms are selling them. Not everything they sell is out-of-date, but their approach to structure certainly is.

Hobart: The other reason is that this is how it’s always been done. These leaders have always restructured by moving the boxes around, and because they’re blind to the fact that it’s not only out-of-date but counterproductive, they keep on doing it. It’s like you’re inside a box and you don’t realize there is a bigger, better box right next to you, but you can’t see beyond the box you’re in.

Marc: Interesting analogy. So, organizations are in a box that defines how they should restructure.

Hobart: Yup, that’s about right.

Marc: This seems like a good place to end for today. Any comments before we stop?

Hobart: I just want to make sure your audience knows that the solution I’ll be talking about is not a quick fix. I don’t have a lot of patience for leaders that are looking for quick fixes and don’t have a longer-term view. I’m also not interested in wasting my time with leaders who are happy in the box they are in because they have no incentive to change. They are going to keep running on that same treadmill they are on now. Let the quick fix people go to the big consulting firms and get their shot of vertical restructuring. It’s like a drug. It feels like you’re doing something to solve your organizational problems, but it’s only really making it worse over the long term.

Hobart: What I am interested in are those progressive leaders who are seeking innovative solutions, in moving to a new operating system and actually solving some of those intractable problems they have today; problems like lack of cross-functional cooperation, failure to execute strategy, continual restructuring, people playing the blame game, conflicting priorities, silo wars, etc.

Hobart: I’m interested in leaders who aren’t just looking to build their own power base or enlarge their egos. I’m interested in leaders who want real results, who want to really solve organizational problems and who want to make their organization a place where people want to work – where they are lining up outside the door wanting to get in. Those are the leaders of the future. Those are the people I spend my time trying to reach. If you’re out there, I want you.

Marc: Well, that was an impassioned pitch! Let’s stop here for today. And now a word from our sponsor.