Restructuring is Not the Key to Improving Performance

Clear decision rights and effective information flows have the greatest impact on a company’s ability to successfully execute its strategy, concludes a new global research report produced jointly by global management consulting firm Booz & Company and its legacy partner, Booz Allen Hamilton. However, senior executives more often rely on restructuring an organisation when trying to fix lagging performance, even though decision rights and information flows are twice as important to successful performance.

The report, The Dominant Genes: Organisational Survival of the Fittest, builds on nearly five years of study up to December 2007 of more than 125,000 responses to an online assessment tool, the Org DNA Profiler® (www.orgdna.com), which diagnoses distinct organisational traits and behaviours by examining a company’s structure, decision rights, motivators, and information. The report features analysis of 44,000 observations from company-specific samples called the “Dominant Genes Strength Index,” to identify the specific organisational traits that correlate most strongly to effective execution.

Eight of the top ten traits for top-executing organisations relate to either decision-making or information flow, and two to motivational practices. None of the top 10 traits relate to changes in the organisation chart. Indeed, traits relating to organisation structure rank no higher than 13th among the total of 17 traits identified.