According to McKinsey & Company, 89% of companies still operate within traditional hierarchies, despite research showing that emerging models consistently outperform them.
Most organizations think restructuring is the answer. But structure alone won’t drive transformation.
Today’s challenges require more than a reshuffle of org charts. They demand a shift in how the organization creates value.
McKinsey’s new ‘Organize to Value’ framework presents a compelling alternative: a dynamic system of 12 interconnected elements—from purpose and leadership to talent and rewards.
These are strategic levers that directly shape an organization’s clarity, speed, skills, and commitment.
From my experience, this feels very relevant—especially in traditional companies. In Japan, for example, many organizations update one piece at a time, slowly over the years. But they don’t always look at the full system. That’s where the gap starts.
We are also required to consider how to use and level up AI across each of these 12 elements, which adds a new layer of complexity to planning. But once we work through that, we can build a more connected, synergized, and future-ready organization.
For HR and business leaders, this is a reminder:
– We can’t fix individual performance with just organization structure. Clarification of role in each position as well as capable talent are highly required.
– We need to think not just about solving current organizational issues, but also about how to achieve future goals.
– We need to design for the company’s overall performance—not just one department—even if you lead a specific team.
#Leadership #HR #OrganizationalDesign