Headlines: August 14th, 2003

Public and private sector organizations implementing restructuring are failing to audit existing skills before making redundancies and letting talent walk away. This is a key message from a survey by the Chartered Institute of Personnel and Development. The research showed that while over 85% of reorganizations in the survey involved a reduction in the workforce, nearly two-thirds led to the recruitment of new employees.The survey Reorganizing for Success, confirms that there is much room for improvement in the way organizations restructure. Getting it wrong is common, with reorganizations failing to deliver real improvement in performance in 40% of cases. Only 40% of reorganizations are completed on time and 60 % within budget. They have become a regular feature of corporate life with respondents experiencing, on average, seven corporate-wide reorganizations over the past three years.

Richard Whittington, Professor of Strategic Management at the Said Business School, which carried out the survey said: All too often organizations find themselves in trouble because of poor management of the change process. In particular the change is piecemeal, doesn’t have the buy in from employees and does not result in the necessary skills and capabilities for the new organization to operate effectively. “