Poorly Planned Centralization Risk – Getting Everyone's Poorest Performers

I recently visited a colleague’s client to discuss issues they were having with a newly formed organizational unit. The unit was created by centralizing certain ‘specialists’ from a variety of other organizations to create a new, more efficient organization. The fact that most of the other organization’s leaders quickly and easily embraced the concept of moving the ‘specialists’ to another organization should have been this client’s first clue something wasn’t right.

What the client received from each organization was actually a collection of their most expensive and least productive employees, some of whom were recently “re-assigned” into the specialist position. Having just inherited the organization from the retiring Branch Chief, the client was trying to figure out how to unwind the mess. The reality is it may takes years for this organization to fully function in the capacity it was intended given that it’s starting in a hole. Only through a variety of mechanisms and additional support will it meet its goals in the coming year. Rather than coming out of the gate focused on providing effective services, the new organization will spend considerable time focused inward on resolving a number of personnel and resource challenges.

There’s an obvious lesson here – the value of effective planning and execution of organizational changes, especially during centralization efforts. By allowing organizations to simply select the individuals or pulling personnel based on position, the new organization’s leadership exposes themselves to considerable risk. A better way is to develop and implement a ‘real’ interview process which includes independent and trusted advisors. The new organization’s leadership should also negotiate with the other organization’s leaders to capture their ‘second-best’ resources, allowing each organization to retain one or a small handful of their best individuals in a given position. This compromise goes a long way in setting up the new organization to operate significantly more effectively from the beginning.