Reducing Overheads Through Effective Operational And Organisational Design

Simplification, Standardisation And Outsourcing

What was the challenge?

After years of rapid expansion, the central overhead costs for this well-known household brand had ballooned.  The organisational design was unstructured, role definitions were unclear and workflow across the organisation was confused.  We were tasked with saving £5m of operational costs by simplifying the organisation design, removing duplication of effort, clarifying accountabilities and empowering the teams by reducing the number of management layers between the CEO and the field teams.

What was the approach?

In the absence of organisational charts, the team’s first challenge was to interview all key stakeholders in order to map the existing roles and understand the full set of activities that were being undertaken.  The team ran a series of workshops with senior leaders to identify where activities could be removed, simplified, or automated and the impacts that this would have on the organisation.  During this process we examined where business units could be integrated, how services could be shared across functions and if non-core activities might be outsourced.  Throughout the design stage there was a strong emphasis on strengthening the critical value creating processes within the organisation.   In collaboration with the senior management, a new functional and organisation structure was designed which included clear role definitions, accountabilities and responsibilities.

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Having gained acceptance for the new structure by the executive board, the team worked with managers and HR partners to map existing personnel to the new roles, identify capability gaps and understand which roles would become redundant.  In parallel to this we also developed the communication and implementation plan in order to quickly establish the new structure whilst minimising the impact to the business and personnel.

How did we help?

This organisational transformation set the foundations for continued, profitable growth for the client.  The operations were simplified, roles were clarified, and historically acquired businesses were successfully integrated.  The core value chain was strengthened through the creation of a customer insights team and the formation of a multi-channel trading function.  We integrated the back-office operations by building a single business unit that was responsible for business processes, operational delivery, compliance and productivity.  The project successfully raised the overall capability of the organisation whilst delivering a 20% reduction in head office headcount and providing an annualised saving of £5.5m.