SE Radio 601: Han Yuan on Reorganizations

Han Yuan, an accomplished Chief Product and Technology Officer, joins host Priyanka Raghavan to discuss reorganizations. The conversation starts with a broad discussion of reorganizations and reasons that companies choose to undertake them. They then consider organizational behavior and topics such as Conway's law and the theory of constraints. Han offers some advice on key steps to take when planning for a reorg, including how software teams could organize themselves based on technology, frameworks, or user journeys. The episode ends with some discussion of metrics and lessons learned. Brought to you by IEEE Computer Society and IEEE Software magazine.

Han Yuan, an accomplished Chief Product and Technology Officer, joins host Priyanka Raghavan to discuss reorganizations. The conversation starts with a broad discussion of reorganizations and reasons that companies choose to undertake them. They then consider organizational behavior and topics such as Conway’s law and the theory of constraints. Han offers some advice on key steps to take when planning for a reorg, including how software teams could organize themselves based on technology, frameworks, or user journeys. The episode ends with some discussion of metrics and lessons learned.

Show Notes

Related SE Radio Episodes

• 543: Jon Smart on Patterns and Anti-Patterns for Successful Software Delivery in Enterprises

• 234: Barry Oreilly on Lean Enterprise

• 554: Adam Tornhill on Behavioral Code Analysis

• 46: Refactoring Pt 1

• 529: Jeff Perry on Career Management for Software Engineers

References

• Inc.com – https://www.inc.com/christine-lagorio/how-airbnbs-ceo-rebuilt-its-business-found-focus.html

• HBR.org – Getting Reorgs Right

• Forbes.com – Oh No Not Another Reorganization Do We Really Need One?

• The Law of Leaky Abstractions

• LinkedIn – @hanshenyuan

• Wikipedia – Conway’s Law

• Wikipedia – Theory of Constraints

• Lean Production.com – Integrating with Lean–What Is the Theory of Constraints, no longer the limiting factor.

Transcript

Transcript brought to you by IEEE Software magazine and IEEE Computer Society. This transcript was automatically generated. To suggest improvements in the text, please contact [email protected] and include the episode number.

Priyanka Raghavan 00:00:19 Hi everyone, I’m Priyanka Raghavan for Software Engineering Radio. Today I’m chatting with Han Yuan who has more than two decades of experience in guiding high growth, high scale organizations for better growth. Having been employed at various companies as small as 25 people to Fortune 500 companies, unicorn-class startups, and organizations in between, Han has personally initiated over half a dozen reorganizations impacting hundreds of individuals and has been a participant of various restructuring efforts and hence the right guest to help us understand the topic of reorganizations. We will try breaking down the reason and intentions behind reorgs and hopefully having someone like Han tell us what happens behind the scenes will make us more enlightened. I hope so. Welcome to the show, Han.

Han Yuan 00:01:06 I’m excited to be here. It’s going to be a fun topic.

Priyanka Raghavan 00:01:09 Okay, so let’s jump right in. In the first question I wanted to ask you is how do you define reorg and what is the reason why a company or companies go for a reorg?

Han Yuan 00:01:21 I define a reorg as any kind of shuffling of roles and responsibilities that impact at least more than two groups. I think if you shuffle a group around within a team, it sort of doesn’t count like, Hey Bianca, I’m going to promote you to a technical lead. But if you have two teams and their roles are changing, I consider that to be a reorg. And of course, depending on the scale of the reorg, things can be more complex accordingly. In terms of the reasons I thought about this deeply, I think there are potentially a lot of reasons, but there are sort of the five mainstream reasons that I can come up with. The first one is operational efficiency. As you become a bigger and bigger company, eventually you’ll find that the way you’re structured might be slowing you down. And so it’s sort of like in technology and software we have similar issues, right?

Han Yuan 00:02:10 Imagine you wrote a piece of software, you’re hosting it, but it’s just not efficient because of the way it works. It could be a monolith; you need to deploy the whole code at once. It’s impacting your CICD pipeline. It’s fundamentally inefficient and you could potentially increase hosting spend or potentially hire a lot more people to do the same thing. Or potentially you could rewrite it so that the operating costs and the hosting costs are lower. And similarly, sometimes companies run into the same issue where the way we do work is inefficient and so they’ll rethink like, hey, how do we reorganize the assets that we have to be able to do the same work with less money? Related to that is just straight up financial health. For most software companies, human resources cost is the number one cost.

Han Yuan 00:02:59 And so in order to dramatically impact financial health in a positive way, in cases where spend is too high, that’s where layoffs occur. When you have a layoff, you’re effectively sort of doing the same thing, right? You’re saying–hey, we need to continue doing the same things but with fewer people. And so now all of a sudden you have fewer people, you have a bunch of empty seats, what are the roles that need to be filled? You could have a strategic shift, you’re entering new markets, you could be divesting new markets. In those cases you might need people with new skills that were different than the folks that you had. One of the more famous stories that, many folks I’m sure on your program are aware of is when Netflix moved to the cloud, they had a bunch of data center folks and they decided to let them go because the data center folks had a skillset that was very, very different than the cloud engineering operations that Netflix is well known for today.

Han Yuan 00:03:53 That was a major strategic shift that ultimately helped them move into streaming in a very, very aggressive way. You could have M&A, two companies join and as a result there could be duplication of roles. So again, reshuffling and sometimes you just have external changes. Covid for example, when Covid hit a lot of companies panicked, they laid off a bunch of people, then all of a sudden this is awesome and they hired a bunch of people, right? That’s an external change. I do think things like technological shifts, like generative AI could have a huge impact. A very specific example, you got to wonder like how companies like Stack Overflow are going to survive in this new world. They’ve had a huge hit in traffic. Other examples include Quora, right? Where if you go to Quora these days, they actually show some generative AI answers.

Han Yuan 00:04:40 It’s interesting because for those brands to survive, they need to have a major strategic shift and maybe the personnel that they had before, it’s not going to fit the new world. Now there are a couple of other things that I think folks sometimes dream up. A new leader gets hired like a fancy VP and they’re like, I want to put my stamp on the organization and I’m just going to reorg a bunch of people so that looks good on my performance review. I’m not going to say that doesn’t happen, but that’s not usually a mainstream case. Other cases you could have somebody who wants to bring in past coworkers and things like that and so they need to clear room. That does happen as well. I would consider them somewhat fringe cases that generally do not impact folks beyond senior leadership.

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