Bain & Co: How Executives Can Lead Successful Redesigns

It’s seen all the time: organisational restructures with the goal of better performance.

In the hope of better business results, firms restructure reporting lines and rejig managerial positions. But a study by Bain & Company shows that many employees don’t share the optimism that their leaders have in their plans.

While 88% of leaders believe that redesigns will meet all expectations, only 36% of people working in the new structures believe that to be true.

Bain says this disconnect is the reason why so many of these restructures don’t work, and this is becoming an increasingly important issue as organisations change their operating models around the development of Gen AI.

According to the consulting firm’s survey of nearly 1,000 global executives and employees who have undergone these changes, making the shift work requires new habits and new ways of working.

The most common errors with redesigns

Bain outlines that most redesigns fail down to very simple reasons.

This includes believing that changing organisational boxes and restructuring reporting lines is enough, recognising that most leaders tend to overemphasise the redesign of the organisation itself and short change planning for the transition to the model.

This means that people are left unaware of how they will work differently within the new framework. 

The study reveals that leaders have concerns that their people will resist the redesign because they lack a clear handle on the change to their work and how this works alongside others.

Bain recognises that while top leaders design reorganisations, it’s the middle managers who have to execute the changes.

Leaders identified confusion about interdependencies and handoffs as the greatest risk to success (31% of respondents), while 37% of middle managers say resistance to change is the top concern.

The study also reveals that more than 80% of leaders believe they effectively communicate, train and support those impacted by a reorganisation, but only 57% of middle managers agree.

Even when leaders effectively convey key structural changes and implementation milestones, Bain says, workers are left confused.

Bain & Co’s 20/200/2000 team

Bain says that the only way to truly achieve the redesigns is to “live the model”, which it says will “mobilise the entire leadership spine”.

The model is called the 20/200/2000 team, focusing on different layers of power:

• The “20” senior leaders who design and sponsor the new operating model
• The “200” middle managers who redefine key workflows and help new routines take root
• The “2000” employees - or most likely more - whose day-to-day behaviours must shift

This framework outlines where time and support is needed to ensure the whole organisation adapts to the changes.

The survey results recognise that this resource allocation is not currently being achieved correctly across companies. This is shown through the nearly 90% of leaders who believe the change process was well organised, while less than one-third of employees agree.

The “200” middle managers have much less confidence in employees’ understanding of their new roles and decision right than the “20” leaders have.

From the employee perspective, it shows that the “2000” generally understand what is changing, but not how to succeed in the new model.

Bain says this group is not necessarily resisting change, but they’re signalling where they need help - with only 22% saying they receive enough support in training, coaching and tools.

Structural changes can only succeed with genuine commitment from middle-managers, so leaders must support them with clarity and practical tools as the best investment, according to Bain, to ensure the redesign actually works.