Reinvent the way you manage for the 2020s and beyond

1. Reinvent the way you manage
for the 2020s and beyond
REINVENT M©

2. 2
Despite all the talk about organizational
agility of recent years, what we observe in
practice is that most large organizations
remain complex/multi-layered matrices,
bureaucratic, slow in decision-making and
execution, insufficiently consumer-centric,
sluggish in bringing innovative products
and solutions to the market with diluted
accountabilities. Corporate culture and
company values are often a vague articulation
of platitudes and rarely match what people
experience day-to-day.
In short, while business models have
been transformed through fast-evolving
consumer requirements and technological
advancements, organizational models
and governance structures have not
fundamentally changed since the 1990s,
despite numerous well-intentioned
“organizational transformation” projects.
The COVID-19 crisis both exposed these
inherent weaknesses but also demonstrated
that the ‘red tape’ can be overcome with the
right sense of urgency. A question that many
CEOs are asking is how to maintain the good
practices that have emerged after the crisis.
Organizational models & governance
structures are to a large extent still stuck
in the 1990s. It is time to
do things radically differently

3. 3
As advisers to CEOs and executive teams,
we know that traditional, long-winding
transformational approaches which take
multiple years to implement mostly fail.
The way companies transform must change,
the mindset needs to become an ‘always on’
transformation and organizational
models must be reinvented.
Based on our experience, we are proposing a
radical yet simple set of ground rules , which, if
fully committed and executed, will truly make
a huge difference in company performance &
long-term success.

4. 4
CEOs ...while none of the
individual ground rules will
surprise you, it begs the
question of why practically
no company gets them
all right. Where are your
biggest gaps?

5. 5
Align around simple and
ambitious Purpose and
Definition of Winning.
01.
Focus on the 5 to 10
priorities that really
move the needle.
03.
‘Kill’ the matrix
organization.
05.
Choose your leadership
and Non-Exec Board
as if you’re striving for
Olympic gold.
07.
Create a company
environment consisting
of outstanding people.
09.
Fundamentally re-think
the way you manage
performance.
02.
Allocate your most
valuable resources
like a venture capitalist.
04.
Make maximizing consumer/
customer value your core
operating mantra, instead of
just optimizing costs.
06.
Future-proof your
capability agenda.
08.
Stop cultural indulgence:
there IS such thing as a
right or wrong culture.
10.
Ground rules
for making a big difference

6. 01.
6
(How) is your senior
leadership aligned around
ambition and key priorities?
Be crystal clear and inspiring on your
purpose with regards to shareholders
AND stakeholders (mix of greater purpose,
performance and people)
Agree on a Definition of Winning (DOW)
as an unambiguous, ambitious, measurable
overriding performance objective,
relative to the relevant peer‑set (you are not
competing with yourself!)
Be sharp in defining what constitutes your
‘right to win’ (source of relative competitive
advantage)- it is never many different things!
Make sure that senior leaders’ personal
objectives are aligned with the overall
corporate Definition of Winning
“You have never arrived” even if your
performance relative to the market is top
quartile.
Be specific regarding your objectives on
the 6 dimensions of your Total Societal
Impact: Economic value, consumer/
customer well-being, ethical values and
practices, environmental sustainability, social
enablement and governance
Articulate differentiated roles & contributions
for each part of the business and individual
leaders as a contribution to the corporate
Definition of Winning
Communicate an inspiring and consistent
equity story to the capital markets and to
your teams internally
Align the Leadership
team and the entire
organization around a
clear stretch ambition
Align around simple and ambitious
Purpose and Definition of Winning.

7. 7
Set high standards of performance, even
unreasonably high, never be satisfied - there
is no shame in pushing for top performance –
this is how individuals excel!
Focus on the KPIs which truly correlate to
the long-term viability of the business (e.g.
customer sentiment, profitable growth, EP,
ROIC, cash flow, sustainability)
Rethink the way you evaluate and
reward. Top priorities are not evaluated
against budget or other traditional individuals’
KPIs but vs. achievements of milestones. Give
exceptional individuals trust and freedom to
execute.
Eliminate traditional yearly performance
management: individuals and teams should
be incentivized based on achievements on
delivering the prioritized agenda, at all levels.
Introduce new KPIs that reflect the specific
objectives and the way you choose to manage
the ‘5 tensions’
Promote on performance (achievement of
milestones) and adherence to purpose,
culture and superior behaviours
Replace time-consuming and politically
motivated budgets and reforecasts with real
time simulations of financial and operational
performance that enable you to decide,
reallocate resources and deliver quicker than
competition
Fundamentally re-think the
way you manage performance
02. Is your mission to be the
best or are you happy to
just compete?
Establish a
high-performance
culture at all levels

8. 8
Frame and constantly refresh a dynamic
Decision and Delivery Agenda. These
priorities represent the highest ‘value-at-stake’
issues and opportunities on your agenda
Your top priorities must always include
People, Performance and Planet
Spend 80% of senior leadership time on
these priorities that represent 80% of ‘value
potential’ and delegate all the rest
Be clear, balanced and aligned with your
senior leadership on how you will manage the
‘five tensions’
Alignment is not trivial!
• Short-term vs. long-term
• Profitability vs. growth
• Sum of parts vs. whole company
• Balance sheet vs. P&L
• Shareholder vs. stakeholder value
(societal impact vs. economic value)
Cascade this management approach
down to the entire organization (each
‘unit’ should have their own priorities but
with a clear link to their objective function-
contribution to corporate DOW)
Stop wasting valuable
management time- relentlessly
focus on what really makes the
difference for the business
Focus on the 5 to 10 priorities
that really move the needle
How can you manage
effectively if you are
chasing 100 ‘priorities’?
03.

9. 9

10. 10
Are you allocating
resources strategically
...and dynamically?
Recognize that one of the most important
responsibilities of a CEO and the Senior
Leadership team is strategic resource
allocation
Redirect Capex, Opex, management time
and talent towards the top 10 priorities –
and yes, this means that other areas of the
organization will be more constrained!
Recognize that in today’s business you should
be investing disproportionately in intangible
assets (digital, R&D)
Manage your top priorities and corresponding
resource allocation like a venture capitalist
(VC), i.e., using ‘performance contracts’
with clear objectives, milestones, mutual
commitments towards priorities owners
Allocate resources dynamically (distinguish
between allocation-release-reallocation) both
top-down (corporate priorities) and bottom-up
(unit priorities) but always clearly linked to
the DOW
Be very clear on what not to pursue and
be rigorous and act fast to stop activities (and
their allocated resources) which do not move
the needle on your DOW
Measure and report what you are stopping,
reward and recognise those who stop
Focus your most
valuable resources for
maximum impact
04.
Allocate your most valuable
resources like a venture capitalist

11. 11
05. Is your matrix
organization diluting
accountabilities?
Traditional matrix set-ups only make sense if
the whole is greater than the sum-of-the-parts
but often lead to dilution of accountability.
Assemble your teams through 3 main
groupings derived from the top 10 priorities
and Definition of Winning:
• ‘Decision cells’: Small cross-functional
teams with best-in-class capabilities
focusing on the top 10 Decision Agenda
priorities, and related key initiatives
to drive decisions at all levels of the
organization
• ‘Delivery teams’: Fully accountable
teams to drive and support execution of
prioritized Delivery Agenda at each level
of the organization
• ‘Functional backbones/digital
enablement platforms’ setting high
standards for functional excellence and
uncompromising SLA relationships to the
other two groups
• Cascade this kind of focus down to each
level of the organization; less is always
more in terms of priorities
• Align expertise and decision rights,
accountability and authority
• Centralize strategic capabilities but never
centralize where you need insights from
the front line
Stop therefore:
• Repetitively changing the key steering
dimension of your structure between
products, categories, customers &
channels, functions and geographies
• Trying to solve the eternal hierarchical
vs. functional relationship tensions for
each individual
Accept that in this priority-driven world,
successfully managing the Decision and
Delivery agenda, means that some parts
of the organization might by consequence
emerge as superfluous
‘Kill’ the
matrix organization!
Stop the paralysis
of diluted
accountabilities!

12. 12
06. How is ‘extreme’
customer-centricity driving
your decisions?
Reinvent the way you connect and co-create
with customers/consumers to create truly
superior value propositions
Leverage AI/digital marketing to sharpen
your understanding of consumer needs and
preferences
Deliver ‘end-to-end’ maximum customer
benefit in the most efficient way, instead of
splitting objectives (e.g., innovation vs. cost
efficiency)
Set superior customer value creation as the
new guiding light for how you decide, design
and segment your operational assets, and
how you operate the business and therefore
apply design thinking to all your processes
(even in the functional backbones)
Based on this customer obsession, redefine
operational excellence, judged by NPS-like
metrics
Do not waste ANY money on activities that
do not improve customer value and drive
your Definition of Winning –be lean from the
get- go, do not invest in optimizing activities
which do not add any value
Make maximizing consumer/customer
value your core operating mantra,
instead of just optimizing costs
Set superior customer
value creation in the
most efficient way as
your guiding light

13. 13

14. 14
Is your senior
leadership a true
A-Team?
Be ruthless, diverse and uncompromising
in the selection of diverse and senior
leadership (top individuals & outstanding
team players only)
New CEOs should make tough choices as
early as possible in their tenure!
Prepare the (next) CEO and the executive
team ahead of time on the comprehensive
skills they will require and the accountabilities
they will face (formal training/coaching
of short-listed candidates 2-3 years ahead
of time)
Consider rotating the executive team
according to the Decision and Delivery
agenda and renew your team as often as
required based on their achievements and
impersonation of the desired culture
Select and evaluate your team based on the
‘never arrived’ principle; there is no such
thing as achieving a performance milestone
and resting on your laurels
Expect and push for top individual
performance, but make sure that the team
is more than the sum of its parts and
in relentless pursuit of the company’s best
interest above personal agenda
Create double-hatting roles in your senior
team to encourage true teaming and shared
incentives
Pick a Non-Executive Board that is
informed, challenging and engaged: you
will not get any value out of Board members
who always agree with you!
Constantly ask the question: why would
people want to be led by you?
Accept that if top athletes need personal
coaching, so do you!
07.
Choose your leadership and Non-Exec Board
as if you are striving for Olympic gold
If you must
change the
team, change
the team!

15. 15
08. Do you have a strategic
capability agenda for the
next 5-10 years?
Ensure that your CHRO and your other
functional leaders are top caliber
strategists!
Your talent and capability strategy are a
cornerstone of your success
Translate 21st century business requirements
(‘future-back’) into a strategic & dynamic
capability & talent agenda: today’s capabilities
will not suffice for the next 5-10 years in
the age of rapid advancements of digital
technology
Move from ‘job strategy’ to ‘skills and
capabilities strategy’
Focus on what you are best at and
partner with the best-in-class for
everything else, meaning that you also
need to become excellent in managing
ecosystems or orchestrating platforms
Define and execute a lifelong learning
approach at all levels
Future-proof your
capability agenda
Develop a future proof
talent and capability
strategy!

16. 16
Never compromise on key people,
mediocrity breeds mediocrity. If competitors
have better talent, address the issue!
The market is truly efficient: don’t allow HR
bureaucracy to stop you from paying top of
the market rates for top talent
Have a long-term strategic vision and
investment plan for developing your top-
talent, not just in-year assessment
Do not delegate your talent strategy - it
should always be one of your top business
priorities!
Never hesitate to let go of people who do not
match your high expectations in terms of their
values, behaviours and performance
Keep challenging yourself on why anyone
would want to work here vs. anywhere
else
Probably your most important role as
a leader is to ‘create a top talent
environment’ by hiring and developing
people who:
• Are smarter and more knowledgeable
than you are
• Are obsessed with serving your customers
better than competitors and add value to
your products and services
• Get things done
• Are enthusiastic, self-motivated and
passionate
• Will grow (with) your team and with the
company
• Are well-rounded with unique capabilities
and talents
• Are uncompromisingly ethical,
communicate openly and are non-political
Make sure that you run your business
with truly diverse teams, reflecting your
customers and society!
Create a company environment
consisting of outstanding people
When you hire and develop truly
outstanding people, magical
things happen and management
becomes a lot simpler!
How does your talent
really measure against
competitors?
09.

17. 17

18. Is your culture truly a
source of competitive
advantage or an excuse?
10.
18
Uncompromisingly believe and live by your
own slogans
Adopt a 21-st century leadership style:
authentic, honest, purpose-led,
connecting. Ask yourself why people would
want to be led by you
Be consumer/customer-obsessed at all
times – always ask how what you do adds
superior value to your customer
Think big at all times! Mediocre ideas and
solutions will never help you achieve your
ambitions
Create negative incentives for internal politics
Always have a bias for action and speed:
act fast,with conviction,allow creative
experimentation,accept failure & prepare to iterate
Act as an owner. Never say “it’s not my job”
Set very high bars for approvals and establish
a culture of YES
Reflect on how you can make your company
a ‘best company to work for’- the benefit of
happy employees is almost always superior to
the cost
Default to open communication, full
transparency, make it safe to tell the truth,
‘fail well’
Challenge with empathy, even when it’s
uncomfortable to disagree, encourage candor –
but then commit and execute
Describe the future on the new culture you
envision and take specific and consistent
steps towards it
Stop cultural indulgence: there IS
such thing as a right or wrong culture
You are the embodiment
of the company’s desired
culture. Never fail to lead
by example!

19. 19

20. 20
How do you think
you score against
each of the 10
ground rules?
very poor very good
02
1 2 3 4 5 6
Fundamentally re-think the way
you manage performance.
very poor very good
04
1 2 3 4 5 6
Allocate your most
valuable resources like
a venture capitalist.
very poor very good
06
1 2 3 4 5 6
Make maximizing consumer/
customer value your core
operating mantra, instead
of just optimizing costs
very poor very good
01
1 2 3 4 5 6
Align around simple and
ambitious Purpose and
Definition of Winning
very poor very good
03
1 2 3 4 5 6
Focus on the 5 to 10
priorities that really move
the needle.
very poor very good
05
1 2 3 4 5 6
‘Kill’ the matrix
organization.

21. 21
very poor very good
08
1 2 3 4 5 6
Future-proof your
capability agenda.
very poor very good
10
1 2 3 4 5 6
Stop cultural indulgence:
there IS such thing as a right
or wrong culture.
very poor very good
07
1 2 3 4 5 6
Choose your leadership and
Non-Exec Board as if you’re
striving for Olympic gold.
very poor very good
09
1 2 3 4 5 6
Create a company
environment consisting
of outstanding people.

22. 22
Make this agenda your–CEO–top priority. Do not delegate
Start by selecting and training a top leadership team and have an open
discussion about how you want to manage together (‘own’ the ground rules)
Apply a “we discuss, we decide” philosophy to define the DOW and top
10 priorities
Agree also on a “we align, we commit, we deliver” philosophy with clear
leadership accountabilities on each of the top priorities
Each of the ground rules represent – for most organizations – fundamental
changes in the way they manage the company. While it is challenging
to successfully implement these changes, it is a much more focused
transformation effort and is doable but requires the uncompromising
commitment of the CEO and the leadership team
As CEO you can drive all these changes quickly, however you may not want
to transform the whole organization at once. You can – for example – start on
one priority and implement Decision Cells and Delivery Teams to learn. You
can then proceed with other priorities and Functional Backbones
We invite you to a dialogue on how to get started on closing your most
important gaps.
How determined are you to make a
difference in the way you manage?
Getting Started

23. 23
To start the conversation, reach out to:
Konstantinos Apostolatos
Managing Director and
Senior Partner
+32 493 49 78 05
Apostolatos.Konstantinos@bcg.com
Martin Danoesastro
Managing Director and
Senior Partner
+31 6 2053 8828
Danoesastro.Martin@bcg.com
Stuart Quickenden
Managing Director and
Senior Partner
+44 7930 442857
Quickenden.Stuart@bcg.com
Jessica Frame
Managing Director
and Partner
+44 7534 120943
Frame.Jessica@bcg.com

24. 24
Related BCG reads
Winning in the ‘20s: Optimize for Both Social and Environmental Impact
How to Harness the Power of Purpose
Beyond Great. How to Build Sustainable Business Advantage in a World
Where Great Is No Longer Good Enough
Building a Resilient Business Based by Biology
Squaring the Circle: Leading Companies in a Contradictory World
The Art of Capital Allocation
The Company of the Future
Achieving Agile at Scale
Demystifying Global Consumer Choice
Leadership Matters: When, How much, and How?
Is Leadership Your Agile Blindspot?
Organizing for the Future with Tech, Talent, and Purpose
A Strategic Approach to On-Demand Talent
When the Ground Shifts, It Pays to Be Agile
Diversity Is Just the First Step. Inclusion Comes Next.

25. START
REINVENTION
NOW!
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