Most reorganizations leave executives disappointed. The new structure looks sensible on paper, and reporting lines are cleaner. Yet a year later, decisions move no faster than before, the same frustrations have resurfaced under different names, and leadership is already discussing the next round of changes.
That cycle is increasingly common because Operating Model Redesign (OMR) itself has become common. About two-thirds of executives report going through a redesign in the past 2 years, and roughly half anticipate another within the next 2. What was once a rare intervention is now a recurring feature of organizational life. The stakes of getting it wrong have risen accordingly, since each poorly conceived redesign consumes time, money, and employee goodwill that the next one will need.
An operating model is far more than an organizational chart. It is the combination of structure, processes, people, technology, and governance through which an enterprise executes its Strategy. When redesign efforts concentrate on the chart alone, the underlying system keeps operating in its old patterns, and the promised Performance Improvement never arrive.
To understand what separates effective redesigns from cosmetic ones, McKinsey studied OMR initiatives across hundreds of enterprises and distilled the practices that consistently made a difference into 9 Golden Rules of Operating Model Redesign framework. Organizations that followed more than 6 of these rules achieved a 73% success rate. A 2025 study of 2,000 executives found the rules still positively linked to success, though conditions have since reshaped which practices matter most.
The 9 Golden Rules at a Glance
The Golden Rules of Operating Model Redesign comprise 9 practices:
- Focus First on the Longer-Term Strategic Aspirations
- Take Time to Survey the Scene
- Be Structured about Selecting the Right Blueprint
- Go beyond Lines and Boxes
- Be Rigorous about Drafting in Talent
- Identify the Necessary Mindset Shifts, and Change Those Mindsets
- Establish Metrics That Measure Short and Long-Term Success
- Make Sure Business Leaders Communicate
- Manage the Transitional Risks
Source: https://flevy.com/browse/flevypro/golden-rules-of-operating-model-redesign-omr-14136
The rules move in a logical sequence. The early ones define direction and starting point, the middle ones govern design and staffing, and the final ones protect the organization while the new model takes hold. Skipping ahead is tempting, especially under pressure to show visible change quickly, but the later rules depend on the groundwork laid by the first 2. Let's examine the first 2 rules more closely, for now.
Rule 1: Focus First on the Longer-Term Strategic Aspirations
Every redesign begins with a question about purpose, whether leaders state it explicitly or not. In many organizations, the implicit answer is "to make the current problems go away." A business unit head complains loudly about slow approvals. A regional team misses targets. A function appears bloated. Each of these becomes a reason to redraw the structure.
The difficulty is that symptoms make poor design specifications. A structure engineered to quiet today's complaints addresses the noise rather than the system producing it. Worse, it often generates a fresh set of problems, because it was never designed with the enterprise's future direction in mind.
The first Golden Rule reverses the order of thinking. Leaders should begin by defining the outcomes the enterprise must deliver over the longer term, then evaluate every structural choice against the strategy those outcomes require. A proposed consolidation, a new business unit, or a revised governance forum earns its place only if it advances that strategy.
The quality of the aspiration determines the quality of the guidance. Slogans such as "become more customer-centric" or "move faster" offer little discipline, because almost any design can claim to serve them. Goals expressed with precision, for example doubling recurring revenue from services or entering 2 new geographic markets within 3 years, give designers concrete criteria. They also make it easier to reject options that are popular internally but strategically irrelevant.
Rule 2: Take Time to Survey the Scene
The second Golden Rule tackles a gap that most leaders recognize once it is named. Many executives admit they launched a new design without a rigorous understanding of how their organization actually worked. They knew the organizational chart well, and they mistook that familiarity for a baseline.
Formal records rarely tell the full story. Headcount files lag reality, role descriptions describe jobs as they were imagined years ago, and Process Maps capture intended workflows rather than actual ones. A redesign built on this information inherits its errors.
Surveying the scene means looking past spans and layers to understand how work genuinely flows, how roles function day to day, and where decisions are made in practice. This often surfaces surprises. Decision rights that appear centralized may be informally delegated. Teams that look redundant may be quietly compensating for weaknesses elsewhere.
The payoff is twofold. An accurate baseline reveals the real causes behind visible pain points, which lowers the likelihood of needing yet another redesign within a few years. And when the baseline is compared with the strategic aspiration defined under the first rule, the gap becomes clear. That gap identifies what the redesign must change and, just as importantly, which existing strengths it must preserve.
Case Study
A specialty chemicals manufacturer with operations in 4 countries faced mounting pressure from its board over flat growth. The initial instinct of the leadership team was to reorganize from a geographic structure into global product lines, a model several competitors had adopted.
Applying the first rule, the team articulated its longer-term aspiration in specific terms: grow revenue from high-margin specialty formulations from 30% to 50% of sales within 5 years, largely through co-development with key industrial customers. The question shifted from "which structure do our competitors use" to "which structure helps us win co-development work."
Applying the second rule, the team spent 8 weeks mapping how customer projects actually moved through the organization. The analysis found that technical service engineers, though formally reporting to country managers, were the real hub of customer innovation. It also revealed that pricing approvals for custom formulations passed through 5 sign-offs. Neither fact appeared in the organizational chart.
The final design created customer-facing application teams built around those engineers, reduced pricing approvals to 2 levels, and retained country leadership for commercial relationships. A wholesale shift to product lines would have broken up the very teams driving growth.
FAQs
Why do so many redesigns fail to deliver results?
They often focus on reporting lines and immediate complaints while leaving processes, talent, incentives, and mindsets unchanged, so the old ways of working persist.
Is copying a competitor's operating model a reasonable shortcut?
Rarely. Admired companies do not share a common structure, and a design must fit the enterprise's own strategy, people, and assets.
Who should be involved in surveying the current state?
Beyond senior leaders, the effort benefits from people close to the work, since they understand how processes and decisions function in practice.
How long should the baseline assessment take?
Long enough to produce reliable data on workflows, roles, and decision rights. A few weeks of disciplined analysis usually costs far less than a redesign built on flawed assumptions.
Have the Golden Rules changed since they were first developed?
Partly. The 2025 research retained 5 original rules and introduced 4 updated ones focused on top team alignment, leadership incentives, manager capability, and redesign team talent.
Concluding Thoughts
A redesign succeeds or fails long before the new structure is announced. Defining a precise strategic aspiration gives the effort direction, and an honest view of the current state ensures it addresses causes rather than symptoms. Together, the first 2 Golden Rules convert redesign from a reaction into a deliberate choice.
The rules that follow carry that discipline forward, into selecting the blueprint, extending change beyond lines and boxes, placing talent, shifting mindsets, measuring progress, communicating through line leaders, and managing risks. Organizations that treat all 9 as an integrated system are far more likely to see their redesign deliver lasting performance gains.
Interested in learning more about the other 7 Golden Rules of Operating Model Redesign? You can download an editable PowerPoint presentation on Golden Rules of Operating Model Redesign here on the Flevy documents marketplace.
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