Add Value Instead of Changing the Org Chart
Randy Wolken, President & CEO

McKinsey recently updated its research on effective operating models, introducing a 12-element “Organize to Value” system that combines people and processes in a more integrated way.

The research shows that leaders often concentrate on organizational structure when redesigning operating models. Structure creates accountability and gives leaders a sense of control over how strategy is carried out. However, McKinsey found that structure is only a small part of creating lasting value. Simply changing the org chart without addressing deeper issues often wastes time and money, because costs will recur if processes and behaviors stay the same.

One of the biggest gaps in organizations is the lack of end-to-end processes that drive value. Many companies still operate with tasks and roles defined by function; managers spend their days in meetings that don’t reflect priorities or performance, and data remains locked in silos or spreadsheets. This rigidity prevents scalable efficiency. According to McKinsey’s State of Organizations research , two-thirds of executives say their companies are overly complex and inefficient.

The solution sounds simple: find the most effective and efficient way to get from point A to point B with results that reflect the organization’s strategic goals. Yet, many organizations find it extremely difficult to accomplish this.

McKinsey highlights four steps companies can take to improve workflows: eliminating, synchronizing, streamlining, and automating processes. Optimizing workflows end-to-end increases efficiency across the entire business, not just in single units or tasks. With the help of digital tools, including AI, leaders can simplify how work gets done and create more value.

Historically, most operating model redesigns have focused on structural optimization—flattening hierarchies, reducing management layers, or reallocating resources. While this brings some benefits, productivity improvements often fade, creating performance gaps. McKinsey’s research shows that successful, long-lasting transformations are more likely to focus on optimizing workflows to capture value.

To begin, business leaders should identify and measure challenges in cross-cutting processes such as strategic planning, annual budgeting, forecasting, performance reviews, commercial reviews, sales and operational planning (also called integrated business planning), product development, and life cycle management.

After this assessment, leaders should evaluate how mature each process is using four levers:

• Eliminate: Cut out unnecessary meetings and reduce the number of people involved. Look for overlaps and delays.
• Synchronize: Review how market information flows across units. Are stakeholders getting useful information in time? Identify silos between functions, business units, headquarters, and markets, then design integrated solutions.
• Streamline: Focus only on information that supports better decisions. Remove data collection that doesn’t add value. Update reporting templates to include forward-looking actions, not just past commentary. Check for inconsistencies in data detail across markets or regions.
• Automate: Use digital workflows to reduce manual reporting and provide faster insights. For example, connect monthly financials seamlessly into forecasts and budgets. The top quartile of companies already use generative AI and advanced analytics dashboards to improve workflows.

These recommendations make sense for our member companies as they work to create even greater value for their customers. Change is an ongoing process. Doing it well will afford greater resiliency and long-term sustainability.