A Holistic Approach to Organizational Redesign | FTI Consulting

"Meet Me in the Middle": A Holistic Approach to Organizational Redesign

Corporate Finance & Restructuring

October 2, 2019


Referencing a pop tune in the title of an article about organization design might seem a bit banal, but its basic message holds true for companies looking to conduct an organizational design effort – that is, strategic requirements and executive-level organizational architecture need to be supported by appropriate processes, staffing, roles and responsibility mapping, and metrics for frontline personnel, along with robust change management and communications protocols in order to execute these processes effectively and achieve their goals. An organizational redesign that does not balance aspiration and pragmatism, or “meet in the middle,” typically results in ambitious ideas that may make sense on paper but either cannot be fully implemented or are ineffective when put into practice.

As the pace of industry-wide disruptions has accelerated over the past two decades, traditional company organizations have been forced to quickly adapt to meet both internal and external competitive challenges. There are several options that executive management may utilize to reinvigorate or transform the business – one of them being organizational redesign to help build an effective structure that supports the company’s core differentiation capabilities.

Based on FTI’s experiences, clients are typically motivated to consider an organizational redesign effort when faced with one or more of the following scenarios:

  • Scenario 1: Experiencing a major company event or transaction (e.g., merger, acquisition or carve-out)
  • Scenario 2: Confronting external drivers (major market disruption, competitor actions)
  • Scenario 3: Confronting realigned strategic and financial priorities (growth imperative, new market penetration, cost optimization, technology transformation)
  • Scenario 4: Undergoing a company-wide restructuring
  • Scenario 5: Fast-tracking performance improvement initiatives

Depending on the magnitude of change (in any of these scenarios), making a few changes to reporting lines and boxes on an organization chart no longer suffices for an organizational redesign effort. Effective organizational redesign requires a holistic approach driven by the company’s vision and strategy, exploring means to define roles and responsibilities, processes and supporting technologies that will help enable a company to perform better. The proposed organization structure then needs to be enabled by employees with the right skill sets (i.e., revised talent acquisition and training strategy) and managed through an effective performance-management framework that defines metrics, which drive accountability.

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