MIT Sloan Management Review Article on CEOs Can Make (or Break) an Organization Redesign

One of a CEO’s essential responsibilities is leading the effort to reconfigure their organization after recognizing that its structure is no longer optimal for creating and delivering value. Some redesigns are major companywide overhauls, such as Procter & Gamble’s creation of six industry-based sector business units in 2019, which its CEO described as “the most significant organization change we’ve made in the last 20 years.”1 Other redesign efforts have a narrower scope, focusing on a particular division, function, or issue.

For a CEO, organization redesign is different from other large-scale change initiatives. In a corporate strategic reorientation, for instance, the CEO is bound by the decisions of the board of directors and follows a strongly analytical approach. In a functional initiative, such as setting the company’s digital strategy, the CEO can delegate the lead to someone on the management team and assume a supervisory role. But in a corporate organization redesign initiative, the CEO must actively take the lead, both because of the profound impact that the resulting changes will have on the culture and employees and because only the CEO has the all-encompassing view required to reduce the risk of serious unintended and undesirable consequences from any particular redesign choice.

About the Author

Herman Vantrappen is the managing director of Akordeon, a strategic advisory firm based in Brussels. Frederic Wirtz heads The Little Group, advising companies on organization design issues worldwide. Vantrappen and Wirtz are the authors of The Organization Design Guide: A Pragmatic Framework for Thoughtful, Efficient and Successful Redesigns (Routledge, 2023).

Learn more about MIT SMR.