Getting Reorgs Right

by Stephen Heidari-Robinson and Suzanne Heywood

CHANCES ARE YOU’VE EXPERIENCED at least one and possibly several company reorganizations. Reorgs can be a great way to unlock value: Two-thirds of them deliver at least some performance improvement, and with change in the business environment accelerating, they are becoming more and more common. As John Ferraro, the former COO of Ernst & Young, told us, “Every company today is being disrupted and so must frequently reorganize to keep up with the incredible pace of change. Those that can do this well will thrive in the current environment and be tomorrow’s winners.”

At the same time, few reorgs are entirely successful. According to a McKinsey survey we conducted, more than ...

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