Here is a brief excerpt from an article written by Rose Beauchamp, Stephen Heidari-Robinson, and Suzanne Heywood for the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out other resources, learn more about the firm, obtain subscription information, and register to receive email alerts, please click here.

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A corporate reorganization doesn’t have to create chaos. But many do when there is no clear plan for communicating with employees and other stakeholders early, often, and over an extended period.

Most executives and their employees dread corporate reorganizations, as we can personally attest. During our combined 35 years of advising companies on organizational matters, we’ve had to duck a punch, watch as a manager snapped our computer screen during an argument, and seen individuals burst into tears.

There are many causes of the fear, paranoia, uncertainty, and distraction that seemingly accompany any major reorganization (or “reorg,” a common shorthand for them in many companies). In our experience, though, one of the biggest and most fundamental mistakes companies make is failing to engage people, or at least forgetting to do so early enough in the process. In this article—based on the new book ReOrg: How to Get It Right (Harvard Business Review Press, November 2016), which outlines a step-by-step approach to reorganizations—we concentrate on the lessons we have learned about that evergreen but still frequently mishandled and misunderstood topic: communication.

Employees come first

In our view, it makes sense to think simultaneously about engagement with employees and other stakeholders — unions, customers, suppliers, regulators, and the board—but employees invariably require the most attention. Leaders of reorgs typically fall into one of two traps when communicating with their employees. We’ll call the first one “wait and see” and the second “ivory-tower idealism.”

In the first trap, the leader of the reorg thinks everything should be kept secret until the last moment, when he or she has all the answers. The leader makes the reorg team and senior leadership swear to secrecy and is then surprised when news leaks to the wider organization. (In our experience, it always does.) Rumors increase amid comments such as, “They were asking what my team does,” “I had to fill in an activity-analysis form,” and “I hear that 20 percent of jobs are going to go.” Eventually, after the reorg team produces a high-level org chart, the leader announces the new structure and says that some job losses will be necessary, but insists that the changes will help deliver fantastic results.

Employees, hearing this, only hear that their boss’s boss’s boss is going to change and that some of them are going to lose their jobs. Nothing their leader has said counters the negative impressions they formed at the water cooler.

Ivory-tower idealism is little better. In this version, the leader can barely contain his or her excitement because of the chance to address all the frustrations of the past and achieve all objectives in a single stroke. He or she decides to start the process with a webcast to all staff, telling them about the exciting business opportunities ahead, followed by a series of walk-arounds in major plants and offices. The leader puts a personal blog on the company intranet. Human nature being what it is, however, no one believes what they hear: they still assume the reorg is about job losses and, to them, the leader’s enthusiasm feels discordant, even uncaring. A charismatic boss can all too easily become shipwrecked on a shore of cynicism.

So, how to handle this challenge? Through communication that is frequent, clear, and engaging because it involves people in the org-design process itself.

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Engagement gets more demanding when the context of the reorg is an expanding business. Elon Musk, CEO of Tesla and SpaceX, told us, “As companies grow, one of the biggest challenges is how to maintain cohesion. At the beginning, as companies get bigger, they get more effective through specialization of labor. But when they reach around 1,000 employees and above, you start to see reductions in productivity per person as communication breaks down.

If you have a junior person in one department who needs to speak to another department to get something done, he or she should be able to contact the relevant person directly, rather than go through his manager, director, then vice president, then down again, until six bounces later they get to the right person. I am an advocate of ‘least path’ communication, not ‘chain of command’ communication.”

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Here is a direct link to the complete article.

Rose Beauchamp leads the firm’s client communications team in Western Europe and is based in McKinsey’s London office. Stephen Heidari-Robinson was until recently the advisor on energy and environment to the UK prime minister. Suzanne Heywood is the managing director of Exor Group. Both Stephen and Suzanne are alumni of the London office and are the authors of the new book ReOrg: How to Get It Right (Harvard Business Review Press, November 2016).