Ask what a company decided in 2014 and few will remember. Look at how it is organised and you will usually be looking straight at the answer.

Strategy documents have a short life. They are refreshed with the planning cycle, reworded by each incoming leader, and quietly superseded long before their stated horizon. The operating model has no such cycle. Reporting lines, budget ownership and the shape of the leadership team persist for a decade or more, and they carry the assumptions of whoever last redrew them.

Structure is a record of an old decision

A regional structure usually means someone once concluded that markets differed more than products did. A product structure means the opposite. Neither is wrong, but both are answers to a question that was asked years ago and may not have been asked since. When the strategy changes and the structure does not, the organisation keeps executing the previous answer with more conviction than the new one.

This is why so many strategies fail without anybody appearing to resist them. Nobody refuses. The budget simply sits with the person whose incentives point the other way, and the initiative starves politely.

Follow the budget and the calendar

Two things reveal the real operating model faster than any org chart. The first is where the budget is actually held — not where the plan says it sits, but who can approve spend without asking. The second is what the leadership team spends its meeting time on, measured over a quarter rather than claimed in an interview.

If the strategy is about a new segment and no one in the room owns a budget for it, the strategy is a statement of intent. If two thirds of executive time goes to the legacy business, that is the operating model speaking, whatever the plan says.

Change the smallest thing that matters

Wholesale reorganisation is rarely the answer, and it is almost always more expensive than the problem. In most cases one or two changes carry the weight: moving a single P&L boundary, giving one person a budget they did not have, or removing an approval step that forces every decision back through a function that no longer needs to see it.

The test is simple. If the strategy were achieved, what would have had to change about who decides what? Make that change. Leave the rest alone.

Painted portrait of Adrian Vance

Adrian Vance

Palladio Founder

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Fresco of two outstretched hands almost touching against a slate-blue sky

The decision is yours.

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Stay in the loop. One note a month on what we are seeing in boardrooms. Written by the partners, not by marketing.

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