The shape and size of organizations tend to scale linearly with sales. We know, however, from product and market lifecycles that growth eventually flattens and then declines unless products and services evolve through innovations that meet evolving customer needs. These cycles of growth are happening more and more rapidly in today’s digital world, but organizations are far less agile in their ability to redeploy capabilities, people, and processes when and where the business needs it. As a result, misalignment between strategy and organization is more frequent as drag accumulates in the form of bureaucracy, managerial bloat, low productivity and misallocation of resources and talent. Many businesses go through a ritual every couple of years of restructuring or cost transformation only to have scar tissue pile up in the process and never really unlock the full potential of their organization.
One of the reasons companies find themselves in an unproductive “restructuring loop” is the false hope that optimizing managerial span of controls (“spans”) and reducing organizational layers (“layers”) to be more in line with peer benchmarks will fix their execution problems. It won’t!
We approach restructuring and cost reduction initiatives with a highly data-driven approach that seeks to gain a deeper understanding about the costs and causes of organizational drag relative to benchmarks. Our highly experienced team then deploys our suite of tools to identify hot spots in the organization for which restructuring can deliver cost savings without eroding critical capabilities. We also work collaboratively with executives to redesign the organization in a way that contains cost and unlocks value.
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