Is this how a smart company works?
March 6, 2017 1:21 PM Subscribe
Asking for a friend who works at a large non-profit (400+ staff). It seems there has been a lot of turn-over in staff and change in executive team structure this past year. She and I were talking and she wanted to know if this is the organization imploding or is this what shrewd organizations do (being quick on their feet to respond to changes in business or the funding world)?
I've never worked at a large anything (unless you count Universities, but I feel like they are a different bear), so I thought maybe folks who have worked at large companies or organizations could share.
She would love to hear from folks who have been in the middle of such circumstances (from any level - top management to entry-level worker). In your case, was such quick shifting in staff and executive structure normal? Was it indicative of a smart company or organization doing rapid response to changing funding or political climate, or was it indicative of other bad things coming down the road? What might she expect?
She falls into the entry-level/low-level worker category so isn't privy to anything other than memos and job postings.
She would love to hear from folks who have been in the middle of such circumstances (from any level - top management to entry-level worker). In your case, was such quick shifting in staff and executive structure normal? Was it indicative of a smart company or organization doing rapid response to changing funding or political climate, or was it indicative of other bad things coming down the road? What might she expect?
She falls into the entry-level/low-level worker category so isn't privy to anything other than memos and job postings.
It could be either, really. My experience is in the tech sector but I would say keep a wait-and-see attitude combined with keeping his/her resume and network up to date. Things to look for is a mass exodus at other levels, but of course that could just be employees following their boss/colleagues to the same new job, so it's hard to tell for sure.
posted by matildaben at 1:26 PM on March 6, 2017
posted by matildaben at 1:26 PM on March 6, 2017
So, a couple of thoughts...
I've been in two companies where most of the executive ranks turned over in a fairly short period of time. In one case it worked out great, and another was a disaster. There were two key factors from my vantage point. First, the one that went well was replacing executives because it realized that it was moving into a new phase of growth, and the early execs didn't really have the skills to get us there. The other company replaced execs because things were going badly and the board was desperate to fix it. The second factor was that the first hire in the company where it went well was a truly amazing CEO who was then charged with hiring for the rest of the positions and he did a great job. In the other case, the board simultaneously replaced three execs including the CEO and the CEO they chose turned out to not be great.
I'm not sure any of these factors are immediately visible to most people at the company. My instinct is that this kind of thing being done for the right reasons and going well is the exception rather than the rule. I'd personally consider a lot of turnover to be a red flag absent convincing information to the contrary. I'm senior enough that I can reasonably ask for details on that kind of thing. If I wasn't in such a position, I'd tend to try to stay away from this situation. But there are so many variables it's impossible to give a one size fits all answer...
FWIW, I consider 400 people to be a small to medium sized company. When someone says "large company" I think tens of thousands of employees. Obviously then non profit world is a bit different...
posted by primethyme at 1:40 PM on March 6, 2017 [1 favorite]
I've been in two companies where most of the executive ranks turned over in a fairly short period of time. In one case it worked out great, and another was a disaster. There were two key factors from my vantage point. First, the one that went well was replacing executives because it realized that it was moving into a new phase of growth, and the early execs didn't really have the skills to get us there. The other company replaced execs because things were going badly and the board was desperate to fix it. The second factor was that the first hire in the company where it went well was a truly amazing CEO who was then charged with hiring for the rest of the positions and he did a great job. In the other case, the board simultaneously replaced three execs including the CEO and the CEO they chose turned out to not be great.
I'm not sure any of these factors are immediately visible to most people at the company. My instinct is that this kind of thing being done for the right reasons and going well is the exception rather than the rule. I'd personally consider a lot of turnover to be a red flag absent convincing information to the contrary. I'm senior enough that I can reasonably ask for details on that kind of thing. If I wasn't in such a position, I'd tend to try to stay away from this situation. But there are so many variables it's impossible to give a one size fits all answer...
FWIW, I consider 400 people to be a small to medium sized company. When someone says "large company" I think tens of thousands of employees. Obviously then non profit world is a bit different...
posted by primethyme at 1:40 PM on March 6, 2017 [1 favorite]
One thing that might be helpful to keep in mind is that when a company readjusts is strategy or focus, organizational changes can occur on a rolling basis, which make it seem like they're more frequent. Often though, it's one seismic change with a large number of ripples.
posted by DrAstroZoom at 1:53 PM on March 6, 2017 [2 favorites]
posted by DrAstroZoom at 1:53 PM on March 6, 2017 [2 favorites]
Another big thing that I've seen happen is where one key exec leaves and a new one comes on, which causes a huge shift in organizational culture. This can lead to people thinking about whether they want to stay with those (for good and bad reasons) and then looking for new work. If this happens with even a few people, it'll have a dramatic difference in the organizational landscape. Also most executives I know poach their favorite employees when they switch jobs and openings come open in new companies.
posted by Nimmie Amee at 2:33 PM on March 6, 2017 [2 favorites]
posted by Nimmie Amee at 2:33 PM on March 6, 2017 [2 favorites]
There isn't really enough info here to say conclusively one way or another. However, a good question to ask is whether or not these changes seem to be tied to a change in organizational strategy - and if so, does your friend think this strategy is sound?
One thing to think about is that non-profits rarely completely go under, due to how funding works (ie, there's no one to "cash out" and funding doesn't usually all disappear at once, unless there's one big institutional donor like a governmental agency). What is more likely is for there to be several rounds of layoffs. Sometimes there's just one round, they right the ship, and things continue on. Sometimes it's just impossible to right the ship, sometimes leadership is unable or unwilling to make necessary changes, etc.
Anyway, it sounds like this turnover is people quitting, not being laid off? Unless your friend has other concerns about how the organization is being run, then I wouldn't worry too much about that - but if she does have serious concerns, then it might be good for her to start looking for a new job, even if the organization isn't on the verge of implosion.
Oh, also, I was shocked when I learned in a management training that many management professionals see a 10-15% turnover rate as ideal. ie, it's actually a problem if it's lower - the idea being that you need new people with fresh ideas cycling into the organization, and having people leave means that the current employees have wider professional networks (the latter bit is especially relevant in the non-profit sector where there tends to be a lot of inter-organizational collaboration). So if the turnover is in that 10-15% range, or if it's following a few years where turnover was a lot lower, it might not even be an issue.
posted by lunasol at 2:51 PM on March 6, 2017
One thing to think about is that non-profits rarely completely go under, due to how funding works (ie, there's no one to "cash out" and funding doesn't usually all disappear at once, unless there's one big institutional donor like a governmental agency). What is more likely is for there to be several rounds of layoffs. Sometimes there's just one round, they right the ship, and things continue on. Sometimes it's just impossible to right the ship, sometimes leadership is unable or unwilling to make necessary changes, etc.
Anyway, it sounds like this turnover is people quitting, not being laid off? Unless your friend has other concerns about how the organization is being run, then I wouldn't worry too much about that - but if she does have serious concerns, then it might be good for her to start looking for a new job, even if the organization isn't on the verge of implosion.
Oh, also, I was shocked when I learned in a management training that many management professionals see a 10-15% turnover rate as ideal. ie, it's actually a problem if it's lower - the idea being that you need new people with fresh ideas cycling into the organization, and having people leave means that the current employees have wider professional networks (the latter bit is especially relevant in the non-profit sector where there tends to be a lot of inter-organizational collaboration). So if the turnover is in that 10-15% range, or if it's following a few years where turnover was a lot lower, it might not even be an issue.
posted by lunasol at 2:51 PM on March 6, 2017
I have worked in large non-profits that were going through re-organizations or had a lot of staff turnover, and I don't think there's enough information here to say one way or the other. I'll just say that a re-org such as she's describing is not necessarily an indication of implosion. I would put a lot of weight on how long the organization has been around - if it's longstanding and has a history of being stable, I think a big re-org or executive change every 10 or so years is par for the course.
posted by cpatterson at 3:33 PM on March 6, 2017
posted by cpatterson at 3:33 PM on March 6, 2017
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If a company's executive team isn't working, it can be very smart to reorg it. That will naturally have trickle-down effects on staff: people want to hire their own teams, people liked working for their previous boss or with a previous business model, and since their job has changed they move on. If the people organizing this re-org can do it proactively and intelligently, it could be a good thing.
If a company is imploding, though, smart people who are in-the-know might be jumping ship to something better.
If the exec team has been reorged repeatedly, or has a long history of quick turnover, that's a bad sign that whoever at the top is managing this stuff isn't good at it.
Basically, there's not really any way to know just from that piece of evidence.
posted by brainmouse at 1:25 PM on March 6, 2017 [1 favorite]