Case study: Spans and layers
As the lead initiative in an overall global effectiveness program, a Fortune 100 client of Strategy& launched a “spans and layers” program designed to reduce high G&A costs driven by organizational complexity. Recognizing that the existing multi-matrix structure was costly, sluggish, uncoordinated, and inwardly focused, management was convinced that a flatter and more streamlined organization model was critical to effecting its strategy and competing in a global marketplace. The team charged with leading this effort followed a four-step process over a period of 12 weeks, first baselining the existing spans and layers, then sizing the prize from a top-down perspective, then designing and implementing solutions to reduce layers and optimize the organization model. In the end, the company realized approximately $200 million in savings, which constituted 25% of the total cost savings generated by the entire global effectiveness program.