empower and streamline ...but don't just cut your middle management

The mixed results from management-focused transformations highlight a crucial lesson: sustainable improvement requires more than just structural change.

Companies that successfully transform their management structures typically:

Evidence supports this comprehensive approach. 

McKinsey research shows that companies in the top quartile of organizational health deliver three times the returns to shareholders compared to their peers. Similarly, Gartner finds that organizations taking an integrated approach to transformation are 3.5 times more likely to achieve their objectives.

Creating a healthy and effective organization requires a more integrated approach than just hitting org design metrics.

As the organization celebrates its lower cost of human capital, it's important to reinvest some of those savings. 

Focus efforts on improving your culture, talent, ways of working, simplification workouts and AI-powered decision intelligence - so you are left with "fewer but better managers".

During my tenure at Sanofi (a leading global pharmaceutical company), my team and I led an impactful program focused on optimizing organizational health - "Space to Lead".

We experienced the usual symptoms and opportunities that many large global complex organizations face:

• With >90k employees, there were too many layers between CEO and frontline, too many managers leading small teams providing the opportunity to improve spans of control.
• Managers often expressed significant administrative burden, limiting their ability to focus on strategic priorities. 
• Leaders and employees at all levels felt that decision-making was slowed down by unclear decision rights and perceived overlapping accountability. They felt less than fully empowered.

At an enterprise level, the case for change was both empirically and instinctively clear. "Space to Lead" was to be a key enabler of Sanofi's "Play to Win" strategy.

To increase the odds of success, we anchored our approach around core principles:

We built the program around three intentional, complementary pillars.

These were complemented by an objective and data-informed approach that allowed for alignment around key principles, testing and learning, and creating evidence to support change adoption. 

The program followed a systematic but flexible approach:

This phase assessed the current organization through a number of analyses – focused on (for example) org design health, cultural and engagement measures, manager capability assessments.

Given quantitative and non-subjective nature of organizational structures, coupled with mature research in this space, a principal focus of the assessment involved deep benchmarking on where we were following or straying from organizational design best practices.

This level of objectivity allowed us to hold up a mirror to the organization, mostly remove personality and emotion from the discussion, and aligned the organization on what we believed “great” looked like.

KEY LESSONS LEARNED:

💡 Debate on the Validity of Organizational Data: even when working with current organizational data, when data and insights become personal to a leader, expect some avoidance such as “Well, Workday hasn’t been updated yet…” or “well, we’re different to our peers”.

• Be transparent on data sources, and external benchmarking or internal comparisons (generally all teams/functions within a company are subject to the same data integrity)
• Push for a mindset of “even if the data isn’t perfect, is it good enough to identify an opportunity?”

💡 Build in Customization to Account for Organizational Differences: not all organizations do the same type of work. 

• Large homogeneous organizations, with similar roles, doing similar and often high volume transactional work (e.g. parts of Sales, Manufacturing, Operations) may suit larger spans of control where less manager/leader collaboration is required. 
• Organizations focused on complex and deep knowledge-based work (e.g. Legal) or smaller but highly geographically dispersed organizations may be better suited to smaller spans of control. 
• Best practice organizational design concepts are great, but always within context of reality.

💡 Be obsessively clear on what your Organization Design principles are:

• Are they guidelines, rules? Are they advised or mandatory?
• Who is accountable for progress? What is HR/Finance’s role - to enforce, advise, verify?
• What is the source of truth, and how will progress be shared, and with whom?
• Are there support mechanisms or consequences, where standards are not embraced?