About the Topic
The Association for Strategic Planning - Boston Chapter is pleased to announce our summer event featuring Michael C. Mankins, strategy consultant and noted author. Be sure to sign up today and feel free to pass this announcement along to your friends and colleagues!
Changing a company’s organizational structure—redrawing the boxes and lines on its org chart—is one of the management tools that chief executives find most appealing. In fact, nearly half of all CEOs reorganize his or her company within just 18 months of taking the reins. "Reorgs” may be designed to reduce costs, support a new strategy, shake up a company’s culture, or simply refocus the organization on the customer in hopes of jump-starting growth. Whatever the specifics, the goal is almost always to improve performance.
But despite all the fanfare these moves typically receive, most reorganizations fail to deliver better results. In fact, a recent Bain & Company study of 155 reorganizations between 2000 and 2006 found that less than one-third produced any meaningful improvement in performance. The lion’s share produced either no or a negative impact on company value.
For Michael and his colleagues, this poor track record is hardly surprising. The reason is that most reorganizations focus on the wrong thing. They assume that there’s a direct link between an organization’s structure and its performance, and that if they somehow define the right organizational units and reporting lines they will magically improve results. What really determines performance, however, isn’t structure at all; but a company’s ability to make and execute its most important decisions better and faster than competitors. Structure can affect decision making and execution, to be sure. But Michael's research and experience suggests that it’s seldom the most important factor in determining a company’s performance.
A handful of companies—Cisco, Ford Motor Company, HP, and Unilever among them—have learned to start with decisions rather than structure, and their reorganizations have fared far better as a result. Indeed, this decision-based approach has enabled them both to create enormous value for their shareholders and—contrary to the effect of many reorgs, which often confuse and demoralize the workforce—to build enviable work environments for their employees.
About the Speaker
Michael Mankins, Partner
Bain & Company
Michael Mankins graduated from the University of Kentucky with a degree in economics (summa cum laude) and earned an MBA from The Wharton School, where he graduated with Highest Distinction. Michael spent the first 20 years of his consulting career with Marakon Associates and went to work for Bain in 2007. Today he is a partner in Bain’s San Francisco office. Throughout his career, Michael has advised business leaders on strategic and organizational initiatives to drive higher levels of performance and long-term shareholder value.
Note: BPMA members can register as an "Affiliate" for ASP Boston events.