Avoiding ‘The Overlap Trap’: Poor org structure can sabotage results

Janet Sherlock is a digital and retail executive with a long track record of modernizing organizations, processes, and solutions. She has held various P&L and technology leadership roles at companies such as British Petroleum, ExxonMobil, Guess, and Carters. Most recently she was the chief digital and technology officer at Ralph Lauren, where she was responsible for the global e-commerce strategy and revenue as well as driving digital transformation.

On a recent episode of the Tech Whisperers podcast, I had the opportunity to talk with Sherlock about her career journey, her experience as an adviser to leaders seeking to create efficient, growth-driven organizations, and what it takes to design winning technology careers and organizations. Sherlock’s passion for these disciplines led her to pursue a doctorate degree in organizational change and leadership at the University of Southern California. Her dissertation, “The Overlap Trap,” focused on how overlapping functions and C-suite roles are undermining productivity, profitability, and progress.

After the episode we spent more time discussing organizational design, including Sherlock’s tips on how to design the IT organization of the future. What follows is that conversation, edited for length and clarity.

Dan Roberts: Organizational design is your gift and passion — and Chapter 2 of your career journey. Did you go into your doctorate program knowing you would be diving deep into organizational design, or did your USC studies spark that in you?

Janet Sherlock: For the past decade, I have observed a significant increase in C-level roles and functions, particularly in the tech space, but also across other areas. In my doctoral studies, I wanted to explore the driving forces behind this trend toward organizational proliferation and, more importantly, research the impact overlapping roles and functions were having on organizations. The Organizational Change and Leadership program at USC was an ideal fit for pursuing this research and for studying different aspects of organizational design and effectiveness. As a result, recognizing today’s immense need for organizational clarity, I’m shifting my career focus toward organizational design.

During the podcast, I made a prediction that someday we will be talking about ‘Sherlock’s Law.’ Can you share more about what that is?

Organizational design is a forgotten art and science. This oversight is having a negative effect on today’s corporations. Sherlock’s Law states that “structure enables results.” I’ve opted to take the positive spin on this concept, but the reality is, poor structure can cripple results. What I’ve seen is that, to address the rapid change and complexity in today’s business environments, leaders have created overly complicated organizational structures.

Teams, leaders, and employees want and need clarity. They’re clamoring for it. One of the major issues today is overlapping executive roles. My research reveals lack of clarity across overlapping functions has a negative impact on the workplace climate and reduces productivity by 22%. To increase efficiency, we have to place greater focus and consideration on organizational design.

Peter Drucker famously said, ‘Culture eats strategy for breakfast.’ The best formulated strategy typically can’t be executed when employees aren’t engaged or there is pervasive negativity in a corporate environment. I build upon that adage by saying, ‘Structure eats culture for lunch and dinner’ because lack of organizational clarity destroys culture. Infighting, turf wars, budget wrangling, and competition are often the source of cultural discontent. If you heed Sherlock’s Law, a clear, coherent structure can support the culture, strategy, and results.

Where do most go wrong with organizational design? What are some of the pillars or principles of great organization design?

There is no such thing as a perfect organization or perfect organizational design. However, the two most significant principles of great org design are: One, align with strategy; and two, create clear organizational structure. If you do those things right, communication, decision-making, and goal alignment become easier. 

When it comes to org design, there are a number of pitfalls leaders face today. One is designing organizations around specific people rather than strategy or function. Organizational structures and roles should be created irrespective of individuals. While there may be times organizational design decisions are made to accommodate a succession plan scenario or address an extenuating personnel situation, this should be the exception, not the rule.

A second pitfall is failing to replace senior leaders when needed. The proliferation of C-suite roles often occurs because the existing CxO lacks the necessary skills to lead new capabilities. Instead of adding roles like chief analytics officer, chief customer experience officer, or chief growth officer, CEOs should assess whether replacing the existing CxO is the more appropriate solution if they’re not equipped to handle developing trends.

And a third one is indiscriminately changing organizations and structures. This is a complex and competitive environment we’re all operating in, and that means conditions are evolving rapidly. But people are not all wired to adapt at the same pace. Constantly changing structures, complicating reporting relationships, and frequently shifting practices doesn’t enhance adaptability — it actually slows it down.

Given the speed and pace of change, what needs to be a priority today to optimize IT organizations of the future?

‘Shadow IT’ continues to be problematic for today’s technology functions. In the past decade, shadow IT has transcended from being a nuisance to CIOs to being detrimental to companies. Enterprise cybersecurity, data governance, analytics, AI, architecture, and business processes cannot be effectively managed when strategies stray and data siloes exist.

In my research, 59% of tech CxOs who straddled technology ownership across multiple leaders stated that there was overlap of responsibilities on technology ownership. However, even 23% of technology leaders with sole responsibility of technology in their organizations stated they had overlap of technology ownership with another executive. That 23% of overlap stems from aspects of technology management through matrixed organizations and shadow IT.

It’s imperative to have CEO support for technology strategy via the company’s CIO, or whatever title the technology leader has. The CIO then needs to take responsibility for creating clear lines of technology strategy and operations ownership across brands, geographies, channels, or families of business. CIOs must persistently assume this responsibility and not be victims or be passive when it comes to creating clear lines of responsibility for technology and data management across functional lines.

One of our mystery questioners on the podcast, Cummins CIO Earl Newsome, said you have ‘an amazing superpower’ ability to look at a problem from multiple angles to ensure all aspects have been considered. He asked whether you have a process for addressing those different aspects. Do you use a framework or model? Is there a set of principles that you apply to ensure everything has been considered before moving forward with the solution?

I’ve always been a strong proponent of theoretical frameworks, particularly for strategic diagnostics. Frameworks like the Burke-Litwin [Change] Model or the McKinsey 7S Model are invaluable when analyzing high-level strategy or aligning performance. These are especially useful when evaluating a new market, product, or strategy, or assessing the company’s performance efficacy.

Due to my doctoral work, I’ve become even more focused on organizations, people, motivations, and behaviors. As a result, I often rely on behavioral models like social cognitive theory or expectancy theory. I’ve become particularly attuned to understanding what motivates people in specific situations, actions, or decisions. I frequently ask myself, ‘What’s their motivation? Why are they taking this stance?’ Understanding what drives people’s behaviors helps you know how to react, engage, and proceed. 

However, I think Earl’s question lies somewhere between strategy and individual behavior — more about general problem-solving. While there are undoubtedly models that can assist with solution-building, I believe there’s no substitute for experience, expertise, and collaborative brainstorming. Bringing the right team together, fostering open-mindedness, and ensuring diversity of thought are crucial. And leadership plays a key role in facilitating these processes, especially in conflict resolution and decision-making. This combination is what leads to the best solutions.

For more from Sherlock on creating efficient, growth-driven organizations, tune into the Tech Whisperers podcast.