How CIOs can do reorganizations right

When I interview candidates for positions I’ve been hired to fill, I typically ask them to whom they currently report. I cannot tell you how often they respond, “That depends, what day of the week is it?” IT professionals are as likely as anyone to invest a tremendous amount of meaning in their titles, their headcount and their reporting lines, and CIOs who reorganize too often (or poorly) are in danger of losing talent. The CIOs below have found ways around that.

When Schneider Electric moved to a global operating model, Senior VP of IT Regions Frederic Chanfrau and his peers reorganized IT into functional domains. While in the end the model worked, they faced some challenges first. “We created artificial silos and broke down local management,” he says. “People were unhappy because they no longer reported to their local boss. It was very confusing.”

There was also confusion in the business, Chanfrau found. “When the country manager in one country had an issue with IT, he did not know who to talk with.” Finally, the new model had too many management layers for decisions to flow easily.

So, Chanfrau and his leadership team reorganized again, this time considering the lessons they’d just learned. In addition to reducing nine layers of management to six and re-implementing some local management structures, they took a new approach to role definition.

Define the roles up front. From Schneider Electric’s CIO down, each management layer had three weeks to discuss and define the roles of next layer down. “You don’t want people at the top making staff allocations that may not work on the ground,” Chanfrau says.

When Jerry Flasz became CIO of Coty in September 2010, he reorganized IT to align to Coty’s geographical footprint and to its go-to-market strategy. “I wanted the IT organization to focus on the business, with closer alignment to sales, marketing and service capabilities,” he says.

Get some help. Reorganizing is especially challenging when you’re new to a company. Flasz brought in an organizational behaviorist to provide an outside perspective. “Most executives will have someone help them to on-board,” he says. “I thought, ‘How do I help my team on-board me?'”

Flasz also brought in a PR specialist. “It was easy to recognize early on that technologists aren’t always the most effective communicators,” he says. Flasz and his PR person were very careful to use language that would be effective in both IT and the business, and that would translate globally. “We needed to know that if we said we would eliminate a capability, it wouldn’t translate as ‘jobs.'”

Be crystal clear. Earlier in his career, David Jarvis, now CIO of Honeywell Aerospace, reorganized IT for a division of a large manufacturing company that was on a fast global growth track.

As with any change, people will insert their own biases in communication gaps and draw unintended conclusions. “My senior IT team assumed that if we didn’t talk about a particular group or area, then people would know that it isn’t changing,” he says. “But in the ranks, people assumed that everything was changing, whether we talked about it or not.”

Have the tough conversations. As an IT professional in the ranks, a reorganization can be a catalyst for your career or it can be a wake-up call. This is the time, as CIO, to be honest with your people. “Your more tenured leaders will be surprised if they are asked to report to a peer,” says Jarvis. “Those tough-love conversations are difficult, and it is too easy to take the easy way out. But a model that looks good on paper will fail if you don’t have the talent.”

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