I am working for a IT shared services company that belongs to a large group that operates in Europe and Asia.
As I see it the whole group suffered a slight business decline and was forced to shrink (sold some parts of its business). This initially led to important changes also in the IT company by implementing large programs such as transition to Agile.
This was not enough and more drastic measures were taken to counterbalance the financial problems:
- an important part of its business was announced to be sold a few years ago (let's call it company X).
- more recently, a special program (let's call it Phoenix) was started. IMO Phoenix means significant restructuring (externalizing a big fraction of the shared services and some layoffs). However, this program is accompanied by a great marketing effort (a big Intranet page describing in detail the steps, list of possible companies where some products and people will migrate etc.).
While I find these changes normal when looking at the bigger context (huge legacy products, teams that did not "convert" to Agile, market pressure), one aspect makes little sense for me: why make these changes so transparent? This led to unpleasant situations like the following:
- when a misunderstanding in the business flow led to a bug in a product shared by both the X and other group companies and this was not fixed immediately, a X boss complained that "they are not sold yet"
- Phoenix program created confusion and fear among several of my colleagues and their motivation has plummeted
I have seen restructurings in the past and they were typically handled with way less information. The line managers knew all the details and talked 1:1 with each employee to settle the future. Typically a financial compensation (several monthly salaries) was offered to ensure a smooth transition.
I have asked a couple of managers about why this method of announcing these changes and I could not get a clear answer.
The only justification for such an approach would be a commitment to transparency made by the top management, but this seems to back-fire quite a lot.
Question: What is the rationale of announcing company restructuring months or even years before it actually happens?