Reorganizations often fail. New BCG research has uncovered six critical success factors that can dramatically flip a company’s odds of reorganization success.
With all the uncertainty that business leaders face today, the one thing they can count on is organizational change. Reorganization has become a fact of business life, an undertaking now as commonplace as launching a line extension was 20 years ago. Heightened volatility, shifting economic realities, and more rapidly evolving competition are forcing companies to adapt and restructure—and to do so more frequently, more fundamentally, and faster than ever before. In fact, in a recent BCG study of executives worldwide (leaders at organizations with more than 1,000 employees), almost 90 percent of those surveyed said they had recently carried out a reorganization. Roughly half were large-scale enterprise-wide reorganizations—efforts designed to fuel global expansion, unleash innovation, capitalize on a market trend, slash costs, digest a merger or an acquisition, or respond to a major social or economic shift. Some reorganizations were implemented during a crisis (amid plummeting profits, for example), others during periods of strength and stability.
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