Why So Many Corporations Are “Reorganizing” Their Employees

Why So Many Corporations Are "Reorganizing" Their Employees

A long time ago, corporations invented many long and confusing words like “reorganization” to help them hide their mistakes.

William Zinsser said it best:

When DEC eliminated 3,000 jobs its statement didn’t mention layoffs; those were “involuntary methodologies.” When an Air Force missile crashed, it “impacted with the ground prematurely.” When General Motors had a plant shutdown, that was a “volume-related production-schedule adjustment.”

In almost every corporation I’ve consulted with in the last five years, a “reorganization,” was taking place. While the definition of the term refers to a restatement of the company’s assets, almost every person I speak to is referring to lots of people losing their jobs.

Take for instance, IBM’s Project Chrome, where the leadership has gone so far as to bestow the deceptive word with a code name. Unfortunately, Project Chrome is not as cool as it sounds; a Forbes blogger reports it is the means for IBM to lay off 110,000 people. He calls is a bloodbath not a “reorganization of assets,” (update: TechCrunch says the number is 43,000). Alas, one has to wonder: how on earth does this happen?

The Guardian said it well, “Known as Big Blue for its once-ubiquitous corporate logo, IBM struggled to make the transition from manufacturing computers and microchips to the world of cloud computing.” Working for IBM was considered a dream job thirty years ago. Today, few top graduates probably even know what the company sells. They want to work for Facebook, which by the way, is now more valuable than Big Blue.

Yet IBM is still a monster that makes nearly $30B in profit annually. As is the case with many of the companies that hire me. Thousands of corporations generate more than half a billion dollars by doing the same exact things they’ve done for decades. And all of them have the same problem: the world is different and they’re the shadow of their former selves.

I’ll never forget a conversation I had with the head of human resources in a multi-billion dollar European company. For context, no one on this planet would argue the future involves more of what this company sells. Yet this executive confidently told me how their revenue was only declining a “small amount” every year. To him, there was “no immediate concern” for the company to figure out what it’s next business is, and if the end was near, they would see it coming from afar.

And in that moment I realized how deep the corporate deception machine goes. This individual is an experienced executive with multiple advanced degrees—someone any of us could consider a friend. But it would only take a friend or family member of his to point out the company only makes money in yesterday’s world. If he could believe there’s no immediate concern, executives in thousands of other doomed companies must feel the same way.

Perhaps the key is in the word “immediate.” When people start to use the word “immediate,” it becomes a self-fulfilling prophecy for doom. Just like climate change is not an “immediate” threat to our planet. Or like how many of us have lost a loved one who didn’t need “immediate” attention for an addiction or psychological problem. Human society delays doing the hard things—the right things—until we absolutely have to.

But this isn’t the future we have to live in. The future of businesses, empowered by new methods of management and run by software, will not delay the inevitable. Will not struggle to transition to new markets. Will not cut ten percent of staff in one swoop. Divisions will grow organically with the markets and talent will be moved in real-time. Let’s build the future.

2 Comments

  1. Pete says:

    Interesting thoughts.

    As a shareholder and employee, I’m hopeful that Ginni gets this right. It requires a pivot and evolution in strategy. And, if done correctly, IBM is positioned well to succeed.