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Organisational model · Knowledge Hub

Organise around work: what matters more than the organisation chart

An organisation chart shows reporting lines. An operating model explains how value is created: who decides, how work flows, where data comes from and what the system rewards.

01

Structure is only one element

In 2025, McKinsey introduced Organize to Value, a system of 12 interconnected elements. Its message for CEOs: changing reporting lines without changing behaviour, rewards, technology and working rules rarely transforms the whole organisation.6

02

Start with the value stream

Before changing reporting lines, trace the path from the customer’s need to the outcome: where work stops, is duplicated or passes between functions. McKinsey cautions that a new organisation chart does not, on its own, remove old processes and behaviours; redesigning end-to-end work may matter more than changing management layers. This is a research and consulting framework to test against your own processes.642

03

Different mechanisms solve different problems

Haier’s microenterprises bring accountability closer to the customer; GitLab’s written processes support collaboration across time zones; Netflix assigns an owner to important decisions. These are different answers to different organisational problems, described by the companies themselves. They can complement one another, but they are not a ready-made package to copy all at once.272825

04

Compare models by the cost of coordination

A functional model accumulates professional expertise but can slow the customer journey between departments. Product teams reduce handovers but risk duplicating specialists. A network approach accelerates direct knowledge sharing but requires visible commitments; self-managed teams require shared standards and infrastructure. GitLab, Haier, Buurtzorg and Gore describe different mechanisms rather than a winner. For each process, the CEO must ask where economic accountability should sit and which coordination is cheaper to keep shared.27282930

05

A pilot should test a hypothesis, not a new name

Before reorganising, define the problem in the system’s behaviour: long waits for approval, losing customers between teams or unclear product economics. Give one workflow a new set of rights and resources while retaining a quality checkpoint. Compare cycle time, rework, customer outcomes and people’s workload. If only speed improves while errors rise, the model is not yet ready to scale. McKinsey cautions against organisational changes that do not redesign actual work and incentives.642

06

Inside the CEO practice

Map one value stream from the customer’s request to the outcome delivered. Mark waiting time, rework, approvals and handovers between teams. Only then decide whether you need a different structure, different authority, a shared platform or a simpler rule.

For your team

Questions before a decision

  1. Where does work spend longer waiting than being done?
  2. What problem will the new organisation chart solve?
  3. Does the team have the resources and data to own the entire outcome?
Primary sources

Sources

  1. 6
  2. 25
    Netflix · Netflix Culture Memo2024 edition; checked 2026-10-02
  3. 27
  4. 28
  5. 29
  6. 30
  7. 42