Operating Model vs. Org Chart: Why Reorgs Fail

Claire Monroe

Welcome back to Science of Leading, I'm Claire Monroe with Edwin Carrington. Edwin, I want to start with a distinction from this week's piece that I think gets collapsed into one thing constantly. Organizational structure and operating model. Aren't those the same thing?

Edwin Carrington

Everyone assumes they are, Claire, and that assumption is exactly why most reorgs disappoint. Structure is who reports to whom and how teams are grouped. The operating model is how work actually happens, decision-making, planning, handoffs, metrics, governance. You can redraw the entire chart and never touch the second one.

Claire Monroe

And when that happens, you get confusion instead of improvement, because the boxes moved but nobody's actually deciding things differently.

Edwin Carrington

Precisely. And HBR's research backs up just how costly that confusion gets, reorg uncertainty is linked to noticeably reduced productivity in about sixty percent of cases. That's not a soft cost. That's most of the organization slowing down while everyone waits to understand what actually changed in practice.

Claire Monroe

McKinsey's number on this is even more sobering, less than a quarter of organizational redesign efforts actually succeed.

Edwin Carrington

Which tells you the failure mode isn't rare, it's the default outcome unless you deliberately do something different. And that something is almost always the operating model. New boxes on a chart with the same old approval chains, the same unclear decision rights, the same planning cadence, you haven't changed anything that actually determines how work gets done.

Claire Monroe

So walk me through what it looks like when a company gets this right, because I know the piece has a real case study.

Edwin Carrington

A mid-size SaaS company, growing headcount, adding layers as they scaled the way most companies default to. And predictably, decision speed slowed and customer issues started escalating more. The fix wasn't another reorg. They clarified decision rights specifically for product calls, customer exceptions, and priority trade-offs. They reduced handoffs by creating true end-to-end ownership for one key customer workflow. And they rebuilt role profiles based on actual decision load and stakeholder complexity, not job titles.

Claire Monroe

And they used behavioral data in there too, didn't they, specifically for the new leadership roles.

Edwin Carrington

Exactly, they validated role fit for those roles with behavioral assessment results before finalizing who sat in them. And the result pattern is almost boring in how straightforward it is. Fewer escalations to executives. Faster decisions on customer-impact issues. Clearer accountability, less cross-team ping-pong. And better retention in the critical roles, because ambiguity and overload had both dropped.

Claire Monroe

No magic, like the piece says. Just less ambiguity and roles matched to what the work actually demands.

Edwin Carrington

That's the whole lesson, Claire. And the behavioral piece deserves more precision than "role fit," because there's a specific mismatch pattern that shows up constantly. A role requires constant cross-functional negotiation, but the person in it is motivated by deep, independent work. You don't get a dramatic failure. You get slower decisions, avoidance of hard conversations, rising escalation volume, and performance that looks fine right up until it suddenly isn't.

Claire Monroe

That "looks fine until it suddenly isn't" part is unsettling, because it means the warning signs are quiet by design.

Edwin Carrington

Which is why you watch for specific signals instead of waiting for a crisis. Persistent overload. Meeting volume climbing while output declines. Rising handoffs and escalations. Quality dipping or rework spiking. A manager's span of control creeping up without any added support underneath them. None of those require mind-reading. They're just signals most companies aren't systematically watching for.

Claire Monroe

And Gartner's number on this is a pretty direct warning too, only thirty-two percent of leaders globally get employees to adopt structural changes in a genuinely healthy way.

Edwin Carrington

Which is not a motivation problem, that's a design and enablement problem, almost always. The chart changed, the operating model and the behavioral fit underneath it didn't.

Claire Monroe

If you want to validate whether your own new or redesigned roles are actually realistic for the people in them before you finalize a reorg, OAD's free Top Performer Profile gives you that signal in about seven minutes, results in twenty-four hours, no credit card. That's O-A-D dot A-I.

Edwin Carrington

Change the operating model, not just the chart. That's the difference between a reorg that sticks and one that just moves the furniture.

Claire Monroe

Perfect place to leave it. Thanks, Edwin.

Edwin Carrington

Always, Claire.