Start Organizational Reform with “Reversible Experiments”

Learning from Clorox: The “Reversible Line” in Organizational Restructuring

Clorox, known for household cleaners and bleach, has announced a business restructuring and the appointment of a new COO (Chief Operating Officer). Large-scale organizational changes often create a chain of decisions that feel “once made, you can’t go back.” However, truly sustainable reform depends on how much room for “turning back” you can preserve.

For small and medium-sized business owners, organizational restructuring is never someone else’s problem. Once revenue exceeds around $7 million (¥1 billion), internal division of labor and delegation of authority become more complex, and you’ll find yourself thinking, “Changing this organizational structure is a big deal.”

This article uses Clorox’s case as a springboard to explore specific design methods for advancing organizational reform in a “reversible” way.

Why Does Organizational Restructuring Become “Irreversible”?

There are three main reasons why organizational restructuring becomes impossible to reverse.

Fixing Roles and Expectations to People

When creating a new organizational chart, we tend to first decide, “Mr./Ms. X is the best fit for this position.” However, when you fix a role to a person, even if they don’t perform as expected, the psychology of “replacing them = failure” kicks in, leading to delayed decisions.

In a large company like Clorox, a COO change requires board approval and explanations to shareholders. Even in SMEs, changing the personnel of executives or department heads involves their careers and the expectations of those around them, making it difficult to reverse course.

Blurring Responsibility with Systems and Contracts

During restructuring, there’s a tendency to create new rules and regulations to clarify job authority and reporting lines. However, the more detailed you make them, the more costly it becomes to change them later when you realize “this rule doesn’t fit.”

Especially when delegating authority to externally hired talent, taking on too broad a scope of responsibility in the contract can lead to a gap between expectations and performance, risking stagnation across the entire organization.

Moving Forward Without Understanding the Reality

Driven by the anxiety of “we have to change something,” many people start restructuring without sufficiently observing the current state of operations. This leads to the counterproductive result of the new system not matching the reality on the ground, actually decreasing productivity.

Three Design Principles for “Reversible Organizational Reform”

So, how can you make organizational restructuring reversible? Keeping the following three principles in mind will help you avoid major failures.

Principle 1: Design from the Work Structure, Not the People

The first thing to decide is not “who will do it,” but “what kind of work is happening, and how much of it?” Identify the work on the ground, understand its volume and frequency, and then define only the roles necessary to handle it.

For example, if you’re restructuring a sales department, first list out tasks like following up with existing clients, new client acquisition, creating quotes, and handling complaints. Then, instead of thinking “I want to entrust this task to someone,” think “what kind of role is needed for the volume of this task?”

Once you’ve defined the roles, initially assign a “temporary person” and set an evaluation period of about three months. During this period, keep their evaluation flexible and make it easy to change roles or swap assignments.

Principle 2: Limit Authority to a “Scope of Responsibility”

A common pitfall in restructuring is giving too much broad authority to talented individuals. Broad authority means their mistakes can impact the entire organization, making it hard to reverse course.

What’s effective here is “limiting the scope of responsibility.” Even when appointing a new COO or division head, initially entrust them with only “improving operational efficiency in these three departments,” while keeping budget and HR authority with the management team.

Clorox’s new COO likely won’t be given company-wide authority all at once. They will probably expand their scope of responsibility step by step, observing results each time.

For SMEs, it’s even more crucial to set clear boundaries from the start, such as “confirm progress at weekly report meetings” or “approval authority is limited to $X (¥Y).” These lines secure the “room to turn back.”

Principle 3: Decide Evaluation Periods and Exit Conditions in Advance

The most important thing is to decide “when and under what conditions we will revert” before starting the organizational reform.

For example, if introducing a new organizational structure, decide in advance that “if sales or customer satisfaction haven’t improved after three months, we’ll revert to the original structure.” Just having this condition significantly lowers the psychological hurdle when it’s time to actually revert.

The key point when setting exit conditions is to judge based on “facts,” not “emotions.” Instead of “the atmosphere feels bad,” set measurable indicators like “the number of complaints increased by 20%” or “overtime hours exceeded 30 hours per month.”

Because You Can “Go Back,” You Can Take the First Step

Leaving “room to turn back” in organizational reform is not a sign of timid management. On the contrary, designing for reversibility allows managers to make bold decisions.

With the premise that “if it fails, we can just go back,” you can fearlessly try experimental organizational changes. Creating new positions, merging departments, hiring external talent—all of these can be started in a “reversible way,” minimizing the cost of failure.

Even for a global company like Clorox, organizational restructuring can’t be done perfectly in one go. This is even more true for SMEs with limited management resources.

Think of organizational reform not as a “decision” but as an “experiment,” and always aim for a design that allows you to turn back. This attitude is the foundation for sustainable growth.

Your First Step Towards “Reversible Organizational Reform” Starting Today

Finally, here’s a checklist you can put into practice immediately.

– This week, write down your company’s “organizational structure you want to change” on paper.
– Under that structure, specifically identify what tasks will be assigned to whom.
– Initially set a narrow “scope of responsibility” for the tasks being delegated.
– Decide on evaluation metrics (numerical) for three months from now, and clearly document the conditions under which you will revert if those levels are not met.

Just implementing these four steps will dramatically increase the reversibility of your organizational reform. Start a “reversible experiment” in a small area first. That experience will build your confidence for the next big reform.