The decision-driven organization

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The full version of this article is available on Harvard Business Online (subscription required).

The Idea in Brief

Reorganizations are popular with chief executives, who believe that making big structural changes will lead to better performance. But a Bain & Company study of 57 reorganizations found that most reorgs had no effect—and some actually destroyed value.

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CONSULTING SERVICE

OrganizationOrganizational Design & Operating ModelDecision Effectiveness

In reality, a company's structure results in better performance only if it improves the organization's ability to make and execute key decisions better and faster than competitors. If you can sync your organization's structure with its decisions, then the structure will work better and performance will improve.

To reorganize around decisions, focus on six steps. First, be clear about which decisions are most important. Second, figure out where in the organization those decisions need to be made. Third, organize your structure around sources of value. Fourth, figure out the level of authority your decision makers need, and give it to them. Fifth, adjust other parts of your organizational system to support decision making and execution. And sixth, equip your managers to make decisions quickly and well.

Read the full article on Harvard Business Online.