Unpacking McKinsey 2026 – Part 3
High productivity, the ratio of output to input, is the organizational holy grail. The amount of value created per hour of work is the common metric. Whether the organization is in the commodity business of grabbing low-hanging fruit or in a premium “shaking-the-trees” service, most organizations know where their sweet spot is and strive to improve it.
For decades, leaders have been able to improve productivity by restructuring. They introduce new org charts with flatter hierarchies. They consolidate to achieve cost reductions that hit the bottom line. And this worked for several decades. But, as McKinsey’s The State of Organizations 2026 finds, with the tectonic forces at play today, those gains have plateaued. Specifically, the research shows that “updating the org chart without redesigning workflows often leads to a rebound in costs and inefficiencies.”
In terms of productivity, restructuring is obsolete; today, the new frontier is “flow.” End-to-end optimization of process design is the mandate. This means understanding how work moves across the organization, where the decisions happen, how information moves and is shared, and how complex all of these things are. Because complexity is the enemy within; it’s the vampire that drains the organization of its most precious resources.
The McKinsey survey shows that two-thirds of leaders now believe their organizations are overly complex and inefficient. They point to meetings that should be emails, processes that require too many approvals, and systems that don’t talk to each other.
The next generation of high-performing organizations will focus less on reporting lines and more on work design. This means simplifying processes, aligning teams around outcomes, removing friction between functions, and designing end-to-end workflows. This serves to clarify accountability, cut data points, automate dashboard reporting, and increase the speed of decision cycles. A byproduct of a redesigned workflow is improved employee engagement.
The goal is simple. Most people want to do great work. Make it easier.
