Organisation, Change and Leadership

When an organisation doesn’t meet its stakeholders’ needs and expectations, the cause is rarely a misguided strategy or vision.

Instead, underperformance is more often the result of a misalignment of the organisation’s strategy and its many complex, interacting parts. To address such situations, Booz & Company designs New Operating Models, based on market economics and customised to deliver against shareholder expectations, customer needs, and the relationships among the constituencies in the organisation’s extended enterprise.

Tailored to meet a company’s particular situation, a New Operating Model typically includes any or all of the following elements:

• Market-like mechanisms for allocating scarce resources
• A decision-rights framework that clearly identifies and motivates individuals to work, individually and together, toward strategic objectives
• Profit-accountable business units formed around distinct value propositions
• Support services based on market models to serve internal clients responsively and competitively
• Lean and strategically focused head offices
• Alliances and partnerships with best-in-class providers to leverage scale, access expertise, and increase flexibility
• Linkages among organisational elements that measure, inform, and motivate them to effectively work together to execute the firm’s strategy

How We Help Our Clients

Case Studies:

• For an agricultural commodity producer, Booz & Company designed a decentralised operating structure that turned individual farms into profit-accountable business units while coordinating their activities at the functional interfaces, optimizing centralized agriculture, processing, and research activities. Shareholder value climbed 48 percent after the changes were implemented.
• For a media distributor needing to manage a complex category while balancing the demands of powerful customers and suppliers, Booz & Company redesigned the organisation around its role as an "honest broker" between its suppliers and customers.The field sales force was transformed into a set of 60 local businesses, with core functions responsible for providing information and analytics to suppliers and customers. Each new local business was given explicit incentives and sophisticated decision support tools to ensure that it teamed with others to make tradeoffs optimising the performance of the entire company. Following implementation, operating income rose fourfold.
• For a successful tier-one automotive supplier, Booz & Company redesigned fundamental management processes to simultaneously drive excellence in core functional areas and the ability to execute critical, highly cross-functional processes. The new management system was structured around program life cycle profitability, and used multiple overlapping views of profitability to measure and motivate cross-functional contributions to the bottom line.