
A diagram of effects illustrating these two loops in the Restructuring-Fear Cycle. View a larger image. The turquoise ovals represent quantitative amounts. For example the oval labeled "Need for Restructuring" represents a measure of the perceived need for a restructuring exercise. The oval labeled "Health of Relationships" represents a measure of the relative health of interpersonal relationships in the organization. An arrow connecting one oval to another indicates that an increase in the first quantity contributes to an increase in the quantity it points to. Thus, an increase in Health of Relationships contributes to an increase in Results. An arrow bearing a red circle indicates a negative relationship. Thus, an increase in Risk Confusion contributes to a decrease in Healthy Risk Appetite.
Following the arrows around any loop in such a diagram, if we encounter an even number of red circles, such as 0, 2, 4, and so on, then that loop represents a positive feedback loop, and the quantities in that loop can "run away" unless Management (or the laws of economics, psychology, or physics) somehow intervene. This diagram, which illustrates only some of the phenomena affecting the Need for Restructuring, has two such loops, which implies that there are two pathways that can cause a runaway need for restructuring.
Decisions about restructuring usually depend on models that show how different approaches might affect the enterprise, by projecting the values of organizational attributes such as net income, market share, or shareholder value. Although these projections rarely include attributes like employee anxiety or fear, such factors are truly important. They help to determine productivity, voluntary turnover, the workload of the people in Human Resources, and many of the attributes that the experts do model, albeit indirectly.
Most important, restructuring-induced fear can create a need for future restructuring, through a variety of paths, some of which are subtle and rarely identified. Here's Part I of an exploration of some of the less obvious mechanisms by which restructuring-induced fear creates a need for future restructuring.
- Degraded and disrupted relationships
- When we relocate people, eliminate positions, or merely change reporting structures, we disrupt relationships between people. Those who formerly relied on each other for advice, instruction, or services must sometimes find new contacts. Even the relationships that aren't totally eliminated can be degraded by restructuring-induced fear, in the form of competitive attitudes that can take hold when people come to believe that further restructuring is possible, and that everyone is in competition for a declining number of jobs.
- Although relationships between and among employees are valuable organizational assets, the value of these assets doesn't appear on financial statements. Unaware of the amount of these assets lost to restructuring, the depressive effects on results seem surprising to planners. The unexpectedly disappointing results can sometimes lead to further restructuring.
- Risk aversion
- When people believe that their When people believe that
their jobs are at risk,
their appetite for risk
in general declinesjobs are at risk, their appetite for risk in general declines. In effect, some people have difficulty keeping separate their own personal risk profile and the risk profile associated with their job responsibilities. This can affect the necessarily subjective judgments people make as part of their responsibilities, which creates a risk aversive approach to operating the enterprise. - After experiencing several serial restructuring events, people in organizations that formerly had a healthy approach to risk can find themselves being overly conservative in their strategies and tactics, because they have begun to confuse their own personal risk experience with the risk experience of the organization. In this way, the organization can become so risk averse that it is no longer capable of accepting the levels of well-managed risk that are so necessary in today's market environments. These organizations then find that they can innovate only by acquiring innovative organizations, which is an expensive method for attaining market leadership. The resulting high costs and low yields sometimes lead to further need for restructuring.
Next time we'll explore three more pathways by which restructuring-induced fear leads to restructuring addiction. Next in this series Top
Next Issue
Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!
[1]Weinberg, Gerald M. Quality Software Management Volume 1: Systems Thinking. New York: Dorset House, 1989. Order from Amazon.com
Your comments are welcome
Would you like to see your comments posted here? rbrenrDUDwWaUxOAJtKFRner@ChaclWPJpPZohNvtYLEJoCanyon.comSend me your comments by email, or by Web form.About Point Lookout
Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.
Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.
Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.
Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.
Related articles
More articles on Emotions at Work:
Hot and Cold Running People
- Do you consider yourself a body linguist? Can you tell what people are thinking just by looking at gestures
and postures? Think again. Body language is much more complex and ambiguous than many would have us believe.
Begging the Question
- Begging the question is a common, usually undetected, rhetorical fallacy. It leads to unsupported conclusions
and painful places we just can't live with. What can we do when it happens?
Totally at Home
- Getting home from work is far more than a question of transportation. What can we do to come home totally
— to move not only our bodies, but our minds and our spirits from work to home?
More Things I've Learned Along the Way
- Some entries from my personal collection of useful insights.
Face-Off Negotiations
- In difficult face-to-face negotiations — or any face-to-face negotiations — seating arrangements
do matter. Here's an exploration of one common seating pattern.
See also Emotions at Work and Organizational Change for more related articles.
Forthcoming issues of Point Lookout
Coming December 11: The Rhyme-as-Reason Effect
- When we speak or write, the phrases we use have both form and meaning. Although we usually think of form and meaning as distinct, we tend to assess as more meaningful and valid those phrases that are more beautifully formed. The rhyme-as-reason effect causes us to confuse the validity of a phrase with its aesthetics. Available here and by RSS on December 11.
And on December 18: The Trap of Beautiful Language
- As we assess the validity of others' statements, we risk making a characteristically human error — we confuse the beauty of their language with the reliability of its meaning. We're easily thrown off by alliteration, anaphora, epistrophe, and chiasmus. Available here and by RSS on December 18.
Coaching services
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenrDUDwWaUxOAJtKFRner@ChaclWPJpPZohNvtYLEJoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.
Get the ebook!
Past issues of Point Lookout are available in six ebooks:
- Get 2001-2 in Geese Don't Land on Twigs (PDF, )
- Get 2003-4 in Why Dogs Wag (PDF, )
- Get 2005-6 in Loopy Things We Do (PDF, )
- Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
- Get 2009-10 in The Questions Not Asked (PDF, )
- Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )
Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info
Public seminars
- The Power Affect: How We Express Our Personal Power
Many
people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.
- A recording of a program presented June 29, 2017,
Monthly
Webinar, sponsored by Technobility
Webinar Series.
PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
- A recording of a program presented June 29, 2017,
Monthly
Webinar, sponsored by Technobility
Webinar Series.
PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
Follow Rick





Recommend this issue to a friend
Send an email message to a friend
rbrenrDUDwWaUxOAJtKFRner@ChaclWPJpPZohNvtYLEJoCanyon.comSend a message to Rick
A Tip A Day feed
Point Lookout weekly feed
