66% of Executives Know Their Organizational Structure Is Broken. Here’s How to Fix It.

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Why do so many companies say they need to move faster while creating organizational charts that slows things down? 

66% of C-suite executives say traditional functions cannot keep up with the demands of modern business. That’s the finding from Deloitte’s 2026 Global Human Capital Trends report which surveyed thousands of senior leaders about organizational structure and workforce strategies.  

Nearly 7 in 10 business leaders say speed and agility will be their main competitive strategy over the next three years. It makes sense. Companies need to move faster, pivot, and innovate like never before. 

I’ve seen this over and over. Most org charts were designed to make separate functions efficient, even when that structure slows work across those same functions. Take a highly tuned legal department that’s designed to mitigate corporate risk. The optimization needed to ensure compliance can stifle new product innovation. Or the brand team that’s owns the corporate identity but causes endless delays in getting product marketing, social media posts, and other materials out the door. 

The most savvy companies focus on the “lateral” processes and structures where speed is actually created. They’re called lateral because they cut across the org chart. And they’re spefically designed to connect functional silos by creating networks of people who collectively tackle a key business process or problem. 

Hierarchies Fail In Today’s World 

An org chart gives marketing, operations, IT, and other functions clear areas of responsibility. That accountability matters. But many of today’s highest-value priorities span several functions, including faster innovation, AI integration, and customer responsiveness. An org chart alone doesn’t create that type of critical coordination. 

When organizations are mired in bureaucracy, leaders often blame their “culture.” One CEO from a Fortune 500 company I worked with actually barred his executive team from using the word culture because he thought it was an excuse. 

I’ve found the deeper issue is usually just coordination. Decisions pass through too many people, while priorities get stranded between functions. Multiple functions structured as a hierarchy creates those boundaries, so companies need another way to cross and connect them. 

Redrawing the Org Chart Misses the Problem 

When a company feels slow or siloed, leaders often redraw the org chart. They move boxes, change reporting lines, or remove layers. Those changes address what leaders can see, while the underlying problem remains. Deloitte’s findings capture that gap: 66% of leaders recognize the dysfunction. Only 7% believe they are making real progress. 

Most organizations still assume that cross-functional decisions should move upward until they reach someone who controls all the pieces. That approach works when a single leader owns every function involved. The moment they don’t, different agendas and metrics can undermine the goal. 

The organizations making progress operate two systems at the same time. 

The hierarchy provides accountability and governance. A lateral network handles coordination and adaptation by connecting networks of people. Leaders can create that second system of collaboration by giving cross-functional teams genuine authority and holding functions accountable for shared outcomes.  

Agile Companies Add a Second Structure 

Another one of my clients needed to move faster and drive greater innovation and customer responsiveness. To do this, we identified the top processes that were either slowing things down or causing the most friction across departments. That was the starting point. 

We then convened cross functional task forces to tackle root cause problems for each process. In just a two hour session, we aligned a network of people that rarely got together. We confirm the bigger problem, defined each functions’ role in ensuring success, and a game plan for improving the process. 

Just having the right people in the room felt refreshing for most participants on those sessions. We convened the network and built connections across the siloed hierarchy. We also ensured people knew there was executive sponsorship at the highest levels for the work, which gave everyone permission to set aside their individual agendas and consider a larger purpose. 

Three Ways to Start 

Want greater agility? Consider doing three things: 

• • Organize around outcomes. Build cross-functional teams that own a defined business result and have the authority to deliver it. 
  • Put decisions closer to the work. Give the people closest to the work the power to make it better. 
  • Measure across functions. Track performance between departments focused on a larger goal, along with the results each function produces inside its own structure. 

Behind the urgency surrounding AI strategy and workforce redesign is a more basic question: can your organization coordinate work across functional boundaries? 

The org chart tells people where they sit. A lateral network determines what gets done.