ReOrg: How to Get It Right

A Practical Guide in Five Steps

Most executives will lead or be a part of a reorganization effort (a reorg) at some point in their careers. And with good reason—reorgs are one of the best ways for companies to unlock latent value, especially in a changing business environment.

But everyone hates them.

No other management practice creates more anxiety and fear among employees or does more to distract them from their day-to-day jobs. As a result, reorgs can be incredibly expensive in terms of senior-management time and attention, and most of them fail on multiple dimensions. It’s no wonder companies treat a reorg as a mysterious process and outsource it to people who don’t understand the business. It doesn’t have to be this way.

Stephen Heidari-Robinson and Suzanne Heywood, former leaders in McKinsey’s Organization Practice, present a practical guide for successfully planning and implementing a reorg in five steps—demystifying and accelerating the process at the same time. Based on their twenty-five years of combined experience managing reorgs and on McKinsey research with over 2,500 executives involved in them, the authors distill what they and their McKinsey colleagues have been practicing as an “art” into a “science” that executives can replicate—in companies or business units large or small.

It isn’t rocket science and it isn’t bogged down by a lot of organizational theory: the five steps give people a simple, logical process to follow, making it easier for everyone—both the leaders and the employees who ultimately determine a reorg’s success or failure—to commit themselves to and succeed in the new organization.

Stephen Heidari-Robinson led McKinsey & Company’s Organization Practice for energy clients in addition to developing the firm’s thinking on implementing reorganizations. He served as UK Prime Minister David Cameron’s advisor on energy and environment. Stephen has also worked as a vice president at Schlumberger, as head of the corporate program of a charity (Asia House), and in the UK Ministry of Defence.

Suzanne Heywood is Managing Director, Exor Group; sits on the boards of a number of companies, including The Economist Group and CNH Industrial; and is Deputy Chair of the Royal Opera House. She started her career in the UK Treasury and then worked at McKinsey & Company, where for several years she led the global Organization Design service line in the firm’s Organization Practice.