Five Levers for a Successful Reorganization

“We need to restructure the organization.” Hardly any other statement triggers as many emotions in companies as this one. For leaders, it means intense decision-making pressure, while for employees it often brings uncertainty about their role and future. And yet, reorganizations are no longer an exception but part of everyday business: According to McKinsey, the majority of companies worldwide are permanently in a process of reorganization and will continue to be so in the future.

The challenge: A reorganization is more than just moving boxes around in the organizational chart. It affects structures, processes and above all, people. If it fails, the consequences can be severe. HR experts report productivity losses of up to 40% during phases when roles and responsibilities are unclear. Added to this is the risk of increased turnover: when employees lack transparency, their willingness to leave rises significantly. Studies on employee retention show that 45% of employees in Germany are actively looking for a new job or open to offers, a risk that can be further exacerbated by reorganizations.

If a reorganization succeeds, it creates clarity, agility, and new energy within the company. It is then perceived not as a threat but as an opportunity for growth and resilience. However, this requires more than good intentions: clear goals, reliable data, transparent communication, and the right tools. In this article, we present five key levers that enable you to design reorganizations effectively, sustainably, and with a human touch.

HR departments still spend a large share of their time working with Excel spreadsheets, manual data maintenance, and reporting. According to the Haufe HR Service Experience Study 2024, administrative routine tasks continue to consume enormous capacities, with the effect that too little space often remains for strategic and transformational work.

The key lies in digitalization and automation. When HR data is consolidated centrally and reporting processes are automated, the effort required for data collection and maintenance is significantly reduced. This enables HR and organizational development teams to focus more on the truly important levers: strategic workforce planning, organizational design, and supporting employees through change.

Reorganizations are rarely routine — leaders are usually under considerable time pressure when it comes to making decisions about new structures, spans of control, or resource allocation. However, relying on gut feeling carries the risk of misjudgments and costly detours.

Scenario planning can provide crucial support here: different options are tested — from best case to worst case — making risks visible and weighing alternative courses of action. According to a McKinsey analysis (“Three keys to faster, better decisions“), companies waste hundreds of thousands of person-days each year due to ineffective decision-making processes — while data-driven organizations act significantly faster and with greater confidence.

A practical example: A company plans to eliminate a management level in order to streamline hierarchies. Scenario analyses reveal how this decision affects spans of control, personnel costs, and productivity. Based on this, leaders can not only calculate cost savings but also identify where risks of overload may arise and take timely countermeasures.

This transforms uncertainty into a clear decision-making framework that both accelerates the reorganization and enhances the quality of decisions.

As soon as a reorganization is announced, performance often declines in many companies. Employees start speculating about their future, while leaders are unable to answer questions because much is still unclear. According to HR analyses, phases of reorganization involving major role changes can lead to productivity losses of up to 40%.

The risk lies less in the actual change itself and more in the lack of clarity around roles, responsibilities, and objectives. Studies show that role clarity is one of the key drivers of engagement, performance, and collaboration.

The most important task, therefore, is to create clarity as early as possible. Clear role profiles, defined responsibilities, and structured communication help to significantly reduce the inevitable “productivity dip” during a reorganization.

Many companies react to reorganizations by instinctively turning to external consultancies. While these do provide expertise, they often leave behind high costs — and take valuable knowledge with them once the project ends. According to analyses from the shared services environment, external consulting expenses can be significantly reduced if companies build their own capabilities in organizational design and transformation.

A crucial lever, therefore, lies in building internal consulting and analytical capabilities. With the right methods and digital tools, HR and organizational development teams can run scenarios themselves, simulate structures, and calculate impacts. This way, experience and expertise remain within the company — and dependence on external partners decreases.

The result: lower costs, greater speed, and, in the long run, more independence in transformation projects.

Reorganizations are complex undertakings — they affect structures, processes, and above all, people. With the right levers, companies can achieve efficiency gains, relieve leaders, prevent turnover, minimize productivity losses, and save costs. The foundation for this lies in clean data, powerful software, transparent communication, and the consistent involvement of employees. By embracing these factors and using a modern org design tool, a reorganization can become an opportunity for sustainable growth and organizational resilience.