Case: Downsizing and Improving Performance
Background
The R&D unit within a global PE-owned Healthcare company was struggling to perform, both with its short-term and the long-term development. The organization was working hard, but the work was plagued by internal inefficiencies. This was readily acknowledged by the R&D-people, who complained about having excessive meetings, excessive information spreading, confusion about who was responsible for what, and continuous “fire-fighting” and pushing of deadlines. The unit was also perceived as performing inadequately by other units in the company and even by customers.
The Project
Enhancer performed an organizational analysis of the unit, mapping all the roles in the current structure, as well as mapping all the employees in a talent pool regarding their capability to handle work at different levels of complexity. The result of the analysis was used as a platform for designing a new organizational structure that matched the requirements of the overall long-term company mission, as well as the unit’s long-term mission and short-term objectives. Excess layers were removed, making sure that every managerial layer was indeed necessary. The roles within the structure were then matched with the right people, using the talent pool in order to secure that every employee had the capability to operate at the level that was required in the role.
Results
The unit was downsized with more than 20 %, creating a yearly cost saving of SEK 20m. The new organization settled extraordinarily fast, and soon the unit improved its performance. At the same time, more resources could be allocated to longer-term development. Work was being carried out more efficiently, and issues were handled and decisions taken in the right forum involving the right people.
One year after the reorganization, the unit performed very satisfactorily. Short-term tasks were carried out well and within deadlines, and longer-term tasks got enough priority. The reputation of the unit within the company had been significantly improved, and an independently-performed survey on employee job satisfaction showed that there had been a significant improvement compared with other units in this regard.