Interviews
Why companies must keep reorganizing
16 Aug '07
2 min read
Companies are now being forced to constantly reorganize in order to stay competitive. A new report from The Conference Board pinpoints the implications of executing a new organization design, and the telltale signs that indicate organization problems.
The report is based on discussions from recent Conference Board conferences and workshops, with senior executives from a wide variety of industries.
“Executives in many companies have come to accept a new reality,” says author Robert Kramer, Principal Researcher, The Conference Board.
“Since organizations now experience constant change – driven by today's global and hyper-competitive environment – they need to build an internal design capability to reorganize on an almost continuous basis. To play this vital role, managers and HR professionals must develop a more robust, holistic definition of organization design and have access to a new set of tools.”
The report identifies key warning signs that suggest problems in corporate organization design:
• A disconnect between the application of the company's resources and the work that is done and business outcomes (misalignment of structure to strategy).
• Significant disagreement regarding the company strategy and how it is executed.
• A steady increase in bureaucracy, cost structure, etc.
• Excessive layers of management.
• Investments in capital are made without corresponding investments in people.
• An excessive focus on internal company issues.
The report is based on discussions from recent Conference Board conferences and workshops, with senior executives from a wide variety of industries.
“Executives in many companies have come to accept a new reality,” says author Robert Kramer, Principal Researcher, The Conference Board.
“Since organizations now experience constant change – driven by today's global and hyper-competitive environment – they need to build an internal design capability to reorganize on an almost continuous basis. To play this vital role, managers and HR professionals must develop a more robust, holistic definition of organization design and have access to a new set of tools.”
The report identifies key warning signs that suggest problems in corporate organization design:
• A disconnect between the application of the company's resources and the work that is done and business outcomes (misalignment of structure to strategy).
• Significant disagreement regarding the company strategy and how it is executed.
• A steady increase in bureaucracy, cost structure, etc.
• Excessive layers of management.
• Investments in capital are made without corresponding investments in people.
• An excessive focus on internal company issues.
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