February 2026
Here at Armstrong Craven, we’re often asked by clients to investigate other companies’ structures, especially those that have recently undergone some sort of transformation.
We do this by picking up the phone and talking to people. That way, we get up-to-date testimony from the people who live with these corporate reboots day in day out. We ask about headcount, leadership, hard lines, dotted lines and peer-to-peer relationships. In short, we find out why one restructure works and another doesn’t.
Most of our sources’ insights are very specific. But here’s something that we’ve never heard anyone say: “The restructure was totally successful. It addressed all the problems we were trying to solve, there were no unexpected side-effects and everyone has adapted seamlessly to the new setup.”
Why is this? Given the scale and complexity of most restructures, isn’t it worrying that so few deliver the hoped-for results? And how do you ensure your own company retrofit won’t stumble on the same mistakes?
Based on our research, we’ve drawn up a list of the five most common reasons
that restructures go wrong:
1. The restructure wasn’t necessary in the first place
We might as well start with the big one. We always ask sources why their employer decided to restructure at all and the answers are often surprising. Usually, the underlying issue is quite negligible. One healthcare business rejigged its entire Commercial Oncology division because its MSLs weren’t liaising effectively with their colleagues in account management. An issue, certainly, but was it worth tearing down the whole structure to solve it? Arguably not.
The fact is, no setup is perfect. By embarking on a utopian quest for some irreproachable organizational design, a company risks spending copious amounts of time and money on swapping one problem for another.
Of course, some structures are dysfunctional on several levels and need to be urgently reimagined. But is yours one of those? Really? Or does it simply contain a few minor infelicities which might best be remedied by coaching and team management?
2. What works in one company might not work in another
There is a fairly strong correlation between corporate restructures and the appointment of new leadership. This stands to reason. A new CEO comes in, wanting to make their mark, and takes the obvious option of reorganizing the business along the lines of their previous (presumably very successful) company. This was what happened recently at one of the business units of major telco company – and the outcome was chaotic.
The division simply wasn’t right for the structure imposed on it. What had worked elsewhere didn’t translate to a business with a larger footprint, different skill-sets and a deeply embedded workplace culture. Unsurprisingly, they had another restructure 18 months later.
3. There is institutional resistance to making it work
Structures and processes don’t just magically work on their own. They rely on the will and purpose of hundreds of individuals.
One company – a leading logistics brand – bemoaned the fact that its shiny new restructure was being held back by employees who were ‘resistant to change’. This is a bit like a failing football manager blaming his players for not sticking to a system. The obvious question in both cases is to ask what work has been done to sell and promote the new ideas pre-implementation?
By contrast, we know of a financial services firm which regularly canvasses workers before bringing in new changes. They don’t exactly give the workforce a veto, but if a proposed initiative gets an especially lukewarm reception, it will often be shelved.
4. Too much focus on the bottom line
As everybody knows, ‘restructure’ can often be a euphemism for ‘redundancies’. But even where there is some larger strategic shifting around of roles and reporting lines, it’s dangerous to let cost reduction be the sole arbiter of what works best.
Again, the healthcare sector provides an example of how this can backfire. During a recent project, we came across a global pharma business which laid off numerous staff, asked others to re-interview for their jobs and repurposed a key product role to make it more ‘commercial’. The aim was to reduce cost and drive up sales. In the short term it worked, but it soon became clear that the new arrangement came with some unsuspected drawbacks.
Firstly, there was a lot of confusion among clients as to who they should be speaking to on any particular issue. Secondly, the company workforce was so demoralized that attrition spiked by over 10% during a six-month period. In other words, what started off as cost-reduction plan probably ended up costing the business money.
5. The wrong things are centralized / decentralized
One of the most common questions that organizational design experts have to grapple with is “when to centralize?” The correct answer of course will depend on any number of variables, including company footprint, market penetration, route(s) to market and brand recognition. But those companies that get the answer wrong usually do so for similar reasons.
Overly centralized setups often showcase a lack of understanding around regional nuances. On the other hand, structures which are too siloed underestimate corporate learning and the economies of ‘best practice’. Of course, a popular halfway house is to run centres of excellence; i.e. business units which establish best practice and roll this out to the relevant regions and BUs. But this begs a question – how do you ensure your CoE is properly structured itself?
Firstly, it must have real influence. That means it should be headed by a senior individual who commands respect across the business. It’s also useful if – like a CPG company we studied – your CoE provides a career route in and out of other business units. Over time, this builds trust and disseminates best practice not via edict, but culture.
All restructures looked great on paper. But the best ones survive contact with reality by taking into account the manifold idiosyncrasies of people, culture and established process.
Do you really need a restructure? If not, then carry on with what you’ve got and accept that no setup is perfect. Otherwise, get in contact today to find out how Armstrong Craven can help you shape and deliver a restructure which is truly successful.
Contact
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