Issue Structural redesign without workflow redesign produces a cost rebound

Summary

McKinsey warns that reshaping the organization chart without also redesigning how work flows tends to backfire. Many organizations reach for structural change first because it produces visible accountability and a sense of control. The report's research finds, however, that such changes often lead to a rebound in costs and inefficiencies. Structural redesigns, cost cuts, and flatter hierarchies can lift productivity briefly but rarely sustain it, since processes, behaviors, and data silos stay the same. The report proposes end-to-end process redesign instead, which it says can speed decision cycles as much as threefold in its experience. The issue highlights a gap between what feels decisive to leaders and what actually changes daily work.