What Works Today May Not Tomorrow

Cognizant can be a useful restructuring model for a global company, but remember there are no right answers and that organizations evolve

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There are many lessons about designing a global organization that can be learned from Cognizant's decision to give two leaders equal accountability, which they refer to as their "two in the box" structure. That company's decision illustrates many broader questions about how to design an organization to be global and to succeed globally.

The first lesson is that leaders need to keep in mind the strategic or operational circumstances their companies are facing. There are no right answers. Cognizant knew that its business strategy required that it fit the customers' needs locally and that it be able to draw upon an increasingly global workforce. It went about designing its organization around those strategies.

The second core lesson is that organizations are inherently dynamic. The right answer today will rarely be the right one tomorrow. That's particularly true for an organization that's evolving to become more global or to become global in different ways—the answer shifts with that evolution. What's important for understanding Cognizant's story is that it went through multiple structural cycles and experiments. Many organizations will start by being "functional," or arranged around a company's departments or business units.

But customer requirements often become increasingly complex. When that happened to Cognizant, it made the sensible move to shift the axis of the organization and put the customer first. And even though that didn't work as well, it was a necessary step to get to the current structure. If it hadn't deliberately built up the weak muscles of organizing itself around customers, it would be unlikely that Cognizant would have been strong enough to make the "two in the box" strategy overcome the more India-centric functional organization it had before. Often in restructuring a company, you'll deliberately swing the pendulum too far. That's O.K. The organization is often focused on restructuring to the exclusion of other things, since it's key to the strategy.

Something Cognizant did that we see too few companies do is to study what its own best people were doing. In general, we see leaders spending too much time studying external best practices and too little time understanding their own exemplars. What are their actions? What are their best work-arounds?

In the end, every organizational structure has both deliberate, intended outcomes and a downside. One of the final lessons is that it's important to make a decision after much internal debate—while knowing and understanding the downside. The disadvantage to Cognizant's decision is that the "two in the box" model doesn't have a single point of accountability. Senior leaders will have to focus on whether accountabilities are unclear, on whether people are unsure of how to work together, and as they expand further, whether this model is becoming too complex. I would not be surprised if even in a couple of years, Cognizant has to make a change again. As it becomes more global, the company may need to move toward a matrix structure that has both a leader on-site and people in the many different regions to which it will turn.

Niko Canner is co-founder and managing partner of Katzenbach Partners, a strategy and organizational performance consulting firm based in New York. What precedes is an edited version of his filmed commentary.