The State of Organizations 2023 - Flipbook - Page 51
With a sense of the scope of change required and the
key priorities identified, CEOs can determine how to
unlock value, deciding on one of two approaches:
— Tune up the existing operating model. Under
this approach, a CEO might look at ways to
capture straightforward sources of value without
remaking the whole operating model. Some
organizations, for instance, have rationalized
certain core business activities to remove any
redundancies, cleaned up their organizational
charts and executive committee structures, and
clarified who has which decision rights in certain
functions and business units.
— Reimagine the existing operating model. Under
this approach, a CEO may want to take steps to
transform the organization radically. The CEO
will need to present a compelling case for the
changes being proposed and a detailed overview
of their implications across the organization. If
senior leaders agree with the case, the CEO can
begin to create a blueprint for the new operating
model, taking a system view of the operating
model and then determining how to rewire its
parts rather than considering piecemeal changes.
In this way, the CEO can help cement the
connections across all elements of the operating
model—strategy, structure, process, people, and
technology. Speed can be important here. In
our experience, the most successful operatingmodel transformations tend to complete their
main phases in fewer than 18 months. These
organizations get a running start—for instance, by
moving the first 100 people to cross-functional
teams early in the transformation to signal
individual and organizational commitment to the
change. In all cases, the CEO and other senior
leaders must model the behaviors and mindset
changes that they want to see and dedicate
sufficient time to the transformation.
The right operating model can frame up new valuecreating possibilities. It can also be a factor in
organizations’ ability to cultivate talent.
Cultivating talent
Long before the COVID-19 pandemic, digitization
and globalization were already changing how
organizations operated and the skill sets that they
March 2023
needed to compete with peers. Finding, developing,
and retaining talent now and for the future has
become a challenge—but not an insurmountable one.
Based on the findings in this report, CEOs and chief
HR officers can take three concrete steps to balance
short-term and long-term needs and manage the
talent crunch: value the employees, fill the gaps, and
build a deep bench.
Value the employees
Whether trying to meet the needs of existing
employees or those of potential joiners, a CEO
and other senior leaders must continually review
and sharpen their organization’s employee
value propositions. It’s important to tailor these
propositions for different individuals and types of
23%
of organizational redesigns
are implemented
successfully, while
44%
33%
ten to stall, and
fail.
77