How many restructures does it take for employees to stop believing in their leaders?

Organisational Change
Paul Slezak

I’ve been working with Samantha for two months now, but she has been in her role with a global professional services firm for nearly two years. Her official title is ‘manager’ and she’s responsible for a team of eight.

“So, what’s been happening since our last session?”, I asked her when we caught up the other day.

Normally, Samantha is very organised, and will send me a list of talking points ahead of our sessions. When I didn’t receive one last week, I just assumed she’d been busy.

“Another fricking restructure”, she said sounding completely exasperated.  

“The first one happened just after I started, and of course I accepted it”, she continued before I had a chance to say anything. “I have to admit the second one took me by surprise a few months later; and I really should have seen the third one as a red flag … especially when a few of my colleagues started to jump ship at that point.”

“Gosh that couldn’t have been easy”, I said. But I quickly realised she wasn’t done.

“The fourth one back in February was a complete crock”, she added. “And now they’re at it again!”.

Over the years, I have had my fair share of coaching clients working in start-ups who have expressed their frustration when their company went through a pivot (or a change in strategy). But in the start-up world that’s simply par for the course. Naturally restructures are also common in the corporate world and in the public sector, but to hear that a mid-sized department inside a highly reputable professional services firm was on a random restructure spree had me completely floored.

“I haven’t even been here for two years, and this is the now their fifth ‘overhaul’”.  

Samantha was back on a roll.  

“I have absolutely no faith at all in the direction of this business not to mention now having zero respect for the ‘leadership’. I feel like I’m playing in a game of fantasy football and they’re making everything up as they go along!”.

She had a lot to vent about, and I now understood why she hadn’t sent me a list of talking points. It was clear that Samantha had just one agenda item.

“It’s disruptive; it’s damaging; and to be completely honest sometimes I don’t even know who my own manager is, and I’m about to get another one … again! What’s even more frustrating, is that they can’t even get the story right. The latest changes were only announced two days ago, and I’ve already heard three different versions of the ‘narrative’.”

When Samantha paused, I thought she was giving me a window to start asking her some of my own questions.  

Not quite.

“One of the senior leaders wants to meet with me later this afternoon. I can only assume he wants to make sure I’m on board and I honestly feel like telling him that I wouldn’t even follow him to the corner store for milk!”

My cue to step in.

In today’s business landscape, adaptation is key to survival. In fact, one of the most popular workshops I facilitate is on ‘adaptive leadership’. Companies must remain agile in order to thrive in a dynamic market. Having said that, there’s a point where adaptability can transform into something far more damaging – a complete lack of trust and faith in the company direction.

When a company continuously restructures, shifting its strategies, objectives and focus, team members will naturally find themselves grappling with uncertainty and scepticism.  

As Samantha had explained, one restructure is acceptable; two might seem alarming; but anything more can quite frankly be jarring. Whilst at first glance a restructure could well be a perfectly reasonable response to shifting market forces, digital transformation, or changes in consumer behaviour, when it becomes a recurring phenomenon, it can lead to a cascade of negative consequences.

Frequent restructures create confusion and uncertainty among employees.  

With each new change, the org chart is redrawn, roles are reassigned, and reporting lines are altered. This constant flux can make anybody outside of the senior leadership team feel like they’re navigating a maze without a map. As a result, their job security and faith in the company vision is called into question, and they often struggle to understand what is expected of them.

At the time of the third internal restructure, several of Samantha’s colleagues saw the writing on the wall.  

In the wake of multiple restructures, many experienced employees will head for the door. This mass exodus will result in a loss of institutional knowledge, which is difficult to quantify but can have profound implications not only in terms of decreased productivity and morale, but in increased cynicism among employees who (just like Samantha) clearly start to question the company’s motives and ability to make sound commercial decisions.

As a result, resistance to change becomes the norm, and employees (critical to the success of any restructure), may actively undermine it out of scepticism or a belief that it’s just another band aid solution.

Excessive restructures will shake the foundations of trust in leadership.

When the plane constantly changes course, it’s impossible for the passengers (employees) to believe that the pilot knows where they’re headed. Leadership decisions will come under increased scrutiny, and employees will become far less willing to follow guidance, especially in times of uncertainty.

Top talent, sensing instability and a lack of clear direction, will often opt for more predictable career paths elsewhere.

Quite understandably, this was the direction Samantha’s coaching session took.  

The brain drain that ensues from a mass exodus can severely hamper a company’s long-term prospects regardless of its international footprint with the loss of talented individuals, along with their knowledge and experience, being a significant blow to any organisation.

Senior leaders should consider the long-term implications of their restructuring decisions and communicate their strategies effectively.

The question as to how many restructures it takes before team members stop believing is not one that can be answered with a specific number.

Instead, it’s about recognising the tipping point at which the negative consequences of frequent restructuring outweigh the benefits. Companies that master this balance are the ones that tend to stand the test of time.