Episode 27: The Reorg Playbook: How People-Forward Leaders Can Turn Disruption Into Opportunity
Welcome, welcome to The People-Forward Leadership™ Podcast. I'm Carol Parker Walsh, and I'm so glad you're here with me today.
Lately, I've been having remarkably similar conversations with several clients who have either gone through or are about to go through a reorganization. They're not only worried about the impact on organizational culture; they've also been wondering, "How can they keep their team focused and productive when everything feels uncertain?" It's a valid question. As I've said frequently on this podcast, the brain hates uncertainty and when faced with it will often go to the worst-case scenario, which doesn't help engagement, productivity, or retention.
And here's the thing, my clients aren't the only ones asking this question because reorganizations aren't slowing down. According to the Harvard Business Review, 80% of employers expect restructurings to continue at the same pace or faster than in past years. Whether it's mergers, acquisitions, bankruptcies, or preemptive moves to protect profit margins, restructuring has become a permanent feature of organizational life, and yes, it can be unsettling.
So today, I want to share what I've been telling leaders about how to navigate reorganizations in a way that doesn't just preserve productivity, but actually creates opportunities for growth, innovation, and deeper engagement.
Now, whether you're in the midst of a reorg or not, I believe there are still takeaways here that will serve you on your leadership journey, because the principles we'll discuss today are really about how to lead people through any significant change.
I've led a reorg as an internal leader at a small transportation company, resulting in restructuring and layoffs. I've supported them as an internal consultant overseeing employee engagement and productivity at a large academic institution during a massive reorganization. I've been the external consultant working in the aftermath of a widespread restructuring, trying to stabilize a workforce filled with very angry, distrustful people and help repair trust after everything fell apart. I've been an employee, decades ago at this point, wondering if my job was going to be safe.
So I know this terrain intimately. And what I've learned is that restructuring—while disruptive—can actually be a catalyst for growth when leaders are intentional about the right things.
Now, if you're a people leader within an organization going through a reorganization, there are three critical actions you can take right now. And these actions align directly with the three pillars of the People-Forward Leadership™ framework.
Let me walk you through them.
The first action is: Reset the Baseline.
This connects directly to Leader Awareness—that foundational pillar of People-Forward Leadership™ that requires you to examine not only your own leadership impact but also the systems and patterns within your organization.
Here's what most organizations get wrong: they treat a reorg as if it's just a structural change. They shuffle the org chart, announce new reporting lines, and then try to pick up with "business as usual."
But a reorganization is a pattern disruption of your entire system. And that means you need to reestablish a baseline.
Think about what we learned during the pandemic. When there's a significant disruption, it fundamentally changes the people being disrupted. They need time to find a new normal, a new baseline from which to operate.
No team can achieve high-level results without going through the essential stages: forming, storming, norming, and performing. Even if some of the same people remain, the system has changed. The relationships have changed. The dynamics have changed.
By intentionally resetting the baseline, you create an opportunity to address what researchers call "layoff survivor guilt," which, by the way, can impact up to 71% of those who remain after a restructure. That's not a small number.
Here's what resetting the baseline actually looks like in practice:
First, clearly articulate how the new structure will empower and better serve everyone. Not just leadership talking points—real, tangible ways that this change creates opportunities.
Second, align the new structure with your vision for the next iteration of the organization. Help people see where you're going, not just what you're leaving behind.
Third, and this is crucial, show how each role contributes to this new future. People need to understand their place and their purpose in what comes next.
As a leader, you can't reset the baseline from your office or from leadership meetings alone. You need real-time insights into how your people are actually experiencing this transition. Create discussion circles or small group check-ins where you can listen—really listen—to what's happening on the ground. Enhance your feedback loops so you're not just broadcasting information but actively gathering intelligence about morale, concerns, and emerging challenges. This is Leader Awareness in action: noticing your own blind spots about how the change is landing, taking in feedback that might be uncomfortable, and adjusting your approach based on what you're hearing. When you model this kind of openness and vulnerability, you create psychological safety for your team to do the same. You become a leader who supports people's ability to thrive even in uncertainty, rather than one who pretends to have all the answers.
This seemingly simple step is pivotal in restoring morale, motivation, and alignment to a unified purpose. It paves the way for a smoother transition because you're not pretending nothing happened—you're acknowledging the disruption and intentionally creating what comes next.
The second action is: Elevate the Bench.
This connects to the Empowered Ecosystem pillar—creating an environment where team members develop their own leadership capacity and feel genuinely empowered to take ownership.
Research shows that companies that take a proactive approach to leadership development during a restructure are 4.2 times more likely to outperform those who react passively. That's a tremendous impact on an organization's bottom line after the restructuring is over.
Most leaders don't fully understand where their high performers are in their organizations or how to elevate them into the right leadership positions. A reorganization gives you a rare opportunity to identify and nurture your next generation of leaders.
While organizations should already be regularly reviewing talent distribution, a reorg is the perfect time to bring your top players off the bench. Strategically elevating the bench isn't just about grooming your replacement. It's about building capacity and building leadership capacity in emerging leaders and throughout your team, preparing them for succession and driving engagement and productivity across the entire organization. It also keeps you from being the bottleneck.
When you develop your people's ability to problem-solve independently, think critically about challenges, and make sound decisions without always needing your input, you create a high-performing team that can move faster and more effectively. This is what Empowered Ecosystem really means. You're not trying to remain the sought-after expert or the only person with the answers. You're intentionally distributing leadership capability across your team. During a reorg, this becomes even more critical because you simply can't be everywhere at once. But if you've built that capacity in your people, they can lead in their own spheres of influence while you focus on the strategic work only you can do.
Also, when offering talent opportunities to female, diverse, or next-generation leaders for growth and development during a restructuring, you're communicating a powerful message: "We're committed to your future within this organization." That fosters a sense of belonging and purpose, which is absolutely critical to maintaining productivity during uncertain times.
When you elevate the bench, you're not just filling positions. You're demonstrating that this organization sees potential, invests in people, and creates pathways for advancement. That matters enormously when everything else feels unstable.
The third action is: Solicit Bad Ideas.
Yes, you heard that right. And this connects to Adaptive Continuous Learning—the 3rd pillar of People-Forward Leadership™ that focuses on creating environments where continuous learning flourishes and diverse perspectives shape the future.
Communication during a restructuring can't just be about disseminating information. It has to be a restorative process.
McKinsey found that organizations that communicate openly during restructuring reported 25% higher productivity levels than those that didn't. But here's the thing—it's not just about having open conversations. It's about restoring trust and psychological safety, or establishing it if it never truly existed in the first place.
Psychological safety is often one of the first casualties of a reorganization. People become afraid to speak up, afraid to make mistakes, afraid they won't be seen as essential to the team.
So here's what I recommend: incorporate what I call "micro-restorative events" into your communication strategy. These can be regular town halls, departmental check-ins, or team huddles where ideas are actively solicited, the status quo is challenged, concerns are voiced, and questions can be asked without fear.
Push for a "no sacred cows" mentality. Create a space where even rejected ideas aren't permanently discarded but kept in a parking lot to potentially be revisited. This tells people that their thinking matters, even when it's not perfect.
When you solicit bad ideas, you're actually doing something counterintuitive but brilliant. You're removing the pressure to be right. You're creating permission to think creatively. You're demonstrating that psychological safety isn't just a buzzword—it's an actual practice in your organization.
But keep in mind that Adaptive Continuous Learning during a reorg isn't just about creating psychological safety to voice concerns or share ideas, it's also about seizing this moment to elevate your organization's collective capacity and capability, particularly with the half-life of skills shrinking, which is a fancy way of saying, our knowledge and skills are going out of date faster than they used to. Use the restructure as an opportunity to introduce new concepts, emerging technologies, or AI tools that can help your team work smarter in the new structure. Institute micro-learning events, 30-minute knowledge shares where team members teach each other new skills or explore how other departments solve similar problems. Create cross-functional learning sessions that help people upskill or reskill for their new or expanded roles. When everything is already in flux, people are actually more open to learning new ways of working. This is your window to build organizational capacity that wasn't there before. The reorg becomes not just about surviving change, but about emerging more capable, more adaptive, and better equipped for whatever comes next.
This approach works because People-Forward Leadership™ is rooted in systems theory. It recognizes that organizations are living systems where every component, the people, the processes, and the culture, affects every other component.
During a restructuring, this interconnectedness becomes even more visible. You can't just fix one piece and expect the whole system to function. You need all three gears working together.
When you reset the baseline through Leader Awareness, you're realigning the entire system to a unified purpose. When you elevate the bench through an Empowered Ecosystem, you're ensuring the system has the leadership capacity to sustain itself through transitions. And when you facilitate Adaptive Continuous Learning by soliciting ideas and building capability, you're keeping the system adaptive and resilient.
These aren't separate initiatives. They're interdependent actions that reinforce each other. Your self-awareness as a leader informs how you empower others. Your empowered team creates the psychological safety needed for continuous learning. And that learning strengthens both individual leaders and the collective system.
This is what it means to lead people forward through change—not by controlling every variable, but by strengthening the system itself so it can adapt, grow, and thrive.
As you can see, restructuring—while inherently disruptive—can be a catalyst for growth and innovation when you lead through the lens of the People-Forward Leadership™ framework.
When you're navigating a reorg as a leader, you have more agency than you think. The key is choosing to act rather than react and to be intentional about what matters most, which is choosing the strategic imperatives that determine whether your organization emerges from the restructuring stronger or more fragmented.
As we close, I want you to consider: What's one action you can take this week to apply these principles in your own context?
It could be creating discussion circles to understand how your team is really experiencing this change, identifying the emerging leader who needs visibility right now, creating space for your team to voice concerns and share ideas, or instituting a micro-learning session to build new capability.
Whatever it is, don't wait. The leaders who navigate change most successfully are those who act with purpose rather than wait to see what happens.
Thanks so much for being here with me today. And remember, keep leading people forward. I'll see you next time.
