I read a blog post recently that I found very insightful. This blog from the Harvard Business Review, reflected on the fact that all too often, management’s first instinct is to attack issues by redrawing the organization chart. Instead, it is suggested, they should look at the inner workings of the company including decision rights, information flow and motivators to understand the “DNA” that makes up their organizations.
As an example, they discuss a company that in the early 1990s had disappointing company performance. Under a restructuring plan, costs fell by 18%, but over the next 8 years, those same layers that had been cut out, crept back in.