Organization Restructuring Type - Case Interviews

Hello Anonymous,

Thanks for reaching out.
For an organizational restructuring case, I advise you to structure it as follows:
1. Diagnosis of the current state:

• By Business Unit or by function:
  • ​Number of FTE
  • Average salary + benefist per FTE
  • Productivity KPIs per BU (for sales: it's average profit generated per sales person for example)
• Organizational structure:
  • ​For example, you should not have teams that report to many reports (dual reporting at best)
  • Also, size of teams managed by one person should not exceed 7 people, otherwise it will be complicated to report

2. Levers for improvements

• This is more quantitative (Oleksandr's Orders of magnitude will help here)
• Here, you identify levers to optimize your structure
  • ​Either by benchmarking against competition (external benchmarking)
  • Or by benchmarking against best in class teams / BUs (internal benchmarking)
• Then you calculate your economies of scale (theoretically)

3. Operational plan: (how to do it)

• Either you relocate or you change scope of teams, or you ask people to leave (less often)
• You need to calculate here the opportunity costs of each option and validate with HR
• Here you can mention the risks and benefits of each option

And there you go!

Of course, there is more details to be tackled for such case. If you have any question r would like to practice this type of case, let me know by private message. These case are quite frequent within MB (McKinsey, BCG)

Best of luck,

Norah

Hey there,

In order to structure your thinking, why don't you think about the following case:

One of the largest global steel makers recently accepted the new organizational transformation target of 10% of efficiency improvement within the marketing vertical. Marketing division within the company has more than 2,000 FTEs, who are work on every continents.

Question. Please find the way the company shall do the restructuring, what steps shall be considered and what eventual impact the initiative may lead to.

Couple of additional data points:

* Split of FTEs per continent: NA (500), LATAM (100), EU (500), Asia (700), Rest (400).

* Split of roles: senior mgmt (10%), mid mgmt (20%), linean mgmt (20%), workers (50%)

* Payscale: For NA: senior mgmt (150k), mid mgmt (95k), linean mgmt (65k), workers (55k); For LATAM: senior mgmt (90k), mid mgmt (75k), linean mgmt (50k), workers (35k); For EU: -15% from US, For Asia 1/2 of LATAM, For the rest 2/3 of NA - Asia

Hint: Think about the whole process in a very details. Think about regular ppl, who have jobs today and how strong their positions are in the company, who shall you offer them to let them leave or relocate, if needed. Think about time zone differences, etc.

PS. Happy to talk about it in details.