Organizational Design or, more appropriately, Organizational Architecture, is rarely on the agenda of most companies.
When it enters, it is in a superficial and basic way, packaged in an organizational chart, changes in job titles or redistribution of competencies.
But it is much more central and strategic than that. Organizational Architecture is the result of some of the most relevant decisions for the success or failure of a company’s strategy.
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More than indicating how to better organize the company, it has the power to establish a structure that effectively increases the chances of the business delivering. And this does not involve creating a structure that starts with people and then serves the business, but the opposite.
Redesigning an organization is designed to generate value, but failure rates remain high, according to McKinsey, because designs remain disconnected from strategy and execution.
Structure is not identity
One of the most common problems is excessive attachment to positions and areas. In growing companies, this tends to appear early. The company, strategy and context, however, are always in motion and wanting to preserve a structure as if it were identity is a big mistake.
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Organizational Architecture must be changeable, evolving to meet the current situation and the strategy defined to face it. Just like the strategy that made sense two years ago doesn’t work today, the same thing happens with the organization.
For this reason, restructuring should not automatically be read as a problem. Maybe, but if done intentionally, not reactively to problems, it is a sign of maturity.
There is no perfect design. There is a trade-off
Just like in any other area, in Organizational Architecture there is no silver bullet, right or wrong, just choices. And they all have their positive and negative sides.
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Centralizing can provide more control, consistency and efficiency, but it can reduce speed and autonomy. Decentralizing can bring decisions closer to the front end and speed up execution, but it increases the need for coordination and leadership maturity.
Creating more layers can provide closer management, but it can also become rigid. Being too lean can provide agility, but overload leadership.
Therefore, it is very important, especially for small and medium-sized companies, to pay attention to Organizational Architecture. Smaller businesses often operate for a long time with an informal structure, strong dependence on the founder and poorly defined roles.
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Although it may work in the short term, later on it becomes a bottleneck.
The maturity of the company directly influences the formation of teams. An early-stage company may need strong generalists and leadership closer to execution. Another expanding sector tends to need more specialization, clarity of roles, better interfaces and more distributed decisions.
A more mature third party may need to review excess layers, simplify structure and redistribute accountability.
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A 2025 McKinsey study shows that even high-performing companies still leave around 30% of the strategy’s potential on the table due to flaws in the operating model. The challenge, therefore, is for everyone — and the sooner this is faced, the better.
The more senior, the less “from the area” and more “from the business”
Among the most common challenges related to Organizational Architecture is design for senior leaders. Normally this is done so that each one only ‘defends’ its territory, creating silos.
The more senior the chair, the greater the obligation should be to help deliver business results, and not just area results.
It’s the logic of ‘T’ leadership.
The person needs to have enough depth to respond to its scope, but also breadth to make decisions looking at the company as a system.
The nomenclature of positions derives, in part, from this problem. Companies get too attached to titles, as if “manager”, “head”, “coordinator” or “director” had the same meaning in any context, which is not true.
The nomenclature changes a lot from company to company. What really matters is to make clear the challenge of the chair, its decision-making authority, the expected level of impact and how success will be evaluated.
Role clarity remains a critical performance variable.
That’s why job description shouldn’t be bureaucracy. It should be a performance tool. Including the CEO. In medium-sized companies, especially, it is not uncommon for there to be much more clarity about positions below than about the founder or chief executive’s chair.
This takes a heavy toll, because the rest of the structure tends to organize itself around this ambiguity.
How to face the challenge of Organizational Architecture?
The first step is to reflect on key points that will serve as the foundation for the company’s structure, starting by defining which areas are truly fundamental to delivering the strategy.
From there, evaluate how the founder or CEO spends his time, which indicates where the real bottlenecks in the operation are.
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Another point of reflection is what the ideal structure would be, looking to the future, not the present, and how this compares to the current team — what gaps, strengths and weaknesses need to be filled, nurtured and resolved.
Finally, reflect on whether what is currently being done by the organization actually supports growth — and whether it is sustainable over time. This should inform an action plan that makes sense considering budget, time, risk and talent availability.
This reflection is the first and most important step to reinforce robust architectures, identify points of attention and preventively correct any deviation that could put the organization at risk.
