The Leadership and Structural Questions Growth Creates

There is a moment in every successful organisation’s evolution when the CEO realises the old structure won’t carry the new strategy. It is rarely dramatic. More often, it is a quiet recognition that the conversations in the executive committee have shifted, that decisions are taking longer, or that talented people are bumping into invisible ceilings.

For organisations expanding through acquisition, geographic diversification, or new business lines, this moment carries particular weight. The strategic moves that created growth now demand structural choices that will either enable the next phase or quietly constrain it.

The question is not whether to restructure. It is whether the CEO and board truly understand what level of work the organisation now requires, and whether they are willing to build the capability to deliver it.

The Transition Nobody Talks About

Most expansion follows a predictable pattern. A successful business in one market or product line extends into adjacent opportunities. Geographic expansion. Strategic acquisitions. New revenue streams that leverage existing capabilities. Each move makes sense in isolation.

But collectively, these moves can fundamentally change what the CEO role requires. The uncomfortable truth is that the capability that built the original business is not automatically the capability needed to run the portfolio.

The shift is from leading a business with a unified strategic intent to stewarding a portfolio of businesses, each with their own strategic accountability.

In Jaques’ Levels of Work framework, this is the distinction between Level 5 (Strategic Intent) and Level 6 (Corporate Citizenship). It’s not just semantics. It’s a fundamentally different type of work, requiring different cognitive capability, different decision-making processes, and different organisational architecture.

The Diagnostic Questions

If you’re a CEO whose organisation is expanding in scope and complexity, here are the questions worth asking yourself:

1. Am I managing businesses or managing business units?

A business has its own strategic intent. Its leader makes choices about where to compete, how to differentiate, which customers to serve, which opportunities to decline. A business unit executes within a strategy set elsewhere.

If your Overseas operations, your services division, your newest acquisition all operate within a strategic framework that you have defined, you are running a diversified Level 5 business. If each has genuine strategic autonomy and you are primarily managing the portfolio composition and resource allocation across independent strategies, you are doing Level 6 work.

Neither is better. But confusing the two creates chaos. Level 5 businesses trying to operate as Level 6 portfolios suffer from strategic drift and accountability confusion. Level 6 portfolios trying to operate with Level 5 centralised strategy suffocate the very independence that makes portfolio value possible.

2. Who is accountable for strategic outcomes in each business?

This is the structural question that reveals everything. If a business underperforms strategically, not just operationally, who owns that failure?

In a Level 5 structure, ultimately it’s you. You set the strategy; they execute. In a Level 6 structure, it’s the business CEO. You may choose to replace them, but whilst they are in role, the strategic accountability sits with them.

This matters enormously for talent management. Level 5 businesses need exceptional Level 4 operational leaders who can execute complex, multi-site operations brilliantly. Level 6 portfolios need genuine Level 5 strategic leaders who can develop and deliver their own strategic intent.

Those are different people. Promoting a superb Level 4 operator into a Level 5 strategic role when they don’t have the capability is cruel to them and dangerous for the business.

3. What conversations am I actually having?

Pay attention to where you spend your time. Are you in the weeds of operational decisions in subsidiary businesses? That suggests either they do not have adequate leadership capability, or you have not truly delegated strategic accountability.

Are you debating the strategic direction of individual business units in detail? That’s appropriate for Level 5, where you own the integrated strategy. It’s inappropriate for Level 6, where you should be challenging strategic proposals but not authoring them.

Level 6 work centres on portfolio composition, capital allocation, governance systems, enterprise-wide culture and values, and managing strategic interdependencies. If you’re not spending most of your time there, either the structure doesn’t match the strategy or you’re not working at the right level.

4. Could these businesses succeed independently?

A genuine portfolio business should be able to operate successfully as a standalone entity, even if there are synergies from being part of the group. If a business unit is fundamentally dependent on central strategy, shared operations, or integrated systems to function, it’s not an independent business. It’s a division.

That is fine, but call it what it is and structure accordingly.

What Actually Goes Where

Once you’re clear about whether you’re running integrated divisions or independent businesses, the structural decisions become clearer. The question shifts from philosophy to practicality: what sits at the centre, what belongs in the businesses, and what might be shared?

For Level 6 portfolio structures:

The centre should be lean. Corporate holds what must be consistent across the portfolio: governance, audit, group finance, treasury, legal, corporate development (M&A), and often group HR policy. Everything else should default to the businesses unless there’s compelling economic or risk logic for centralisation.

Each business needs complete capability to deliver its strategy: its own finance team, operations, marketing, business development, IT, HR. If a business can’t function without constantly drawing on central resources for core activities, it’s not genuinely independent.

Shared services become an option, not an obligation. If businesses choose to use group procurement, group IT infrastructure, or centralised property management because it’s economically sensible, fine. But they should have the option to go external if the internal offering does not serve their needs. That market discipline keeps shared services honest.

For Level 5 integrated structures:

The centre can be considerably larger because you’re driving a unified strategy across different operational units. Central strategy, central marketing, integrated supply chain, enterprise technology platforms, shared operations support all make sense because you’re optimising the whole, not managing independent parts.

The business units focus on execution excellence within their geography or product line. They need strong operational leadership but don’t require full strategic or functional independence.

Shared services are not optional; they are how you drive efficiency and consistency. The centre sets standards, mandates systems, and coordinates across units.

The hybrid trap:

Many organisations end up in an uncomfortable middle ground. They’ve got business units that are told they’re independent but can’t actually make meaningful strategic choices. Or they have a corporate centre that’s too large for a portfolio structure but not genuinely driving integrated strategy.

This happens when CEOs want the flexibility of portfolio thinking without giving up the control of integrated operations. It rarely works. People in the businesses feel constrained. The centre feels ignored. Costs are higher than either model would produce.

Better to choose clearly and structure accordingly.

The Talent Implications

Once you are clear about what level of work the organisation genuinely requires, the talent questions become more tractable:

For organisations moving to genuine Level 6:

You need to conduct ruthlessly honest capability assessments of your current leadership. Do you have people capable of Level 5 strategic work running what will become independent businesses? Not people you hope might grow into it. People who demonstrably have that capability now.

If not, you face difficult choices. Bring in external strategic talent. Restructure to match current capability. Or accept that this particular expansion is not viable without a different leadership team.

Your succession planning also changes fundamentally. You are no longer developing one successor for your role. You are developing multiple Level 5 leaders, one of whom might eventually step up to Level 6 corporate leadership. That requires different development experiences, different exposure, different assessment.

For organisations remaining at complex Level 5:

You need exceptional operational leaders who can manage complexity across geographies, products, or channels. But you also need to be honest that these are not CEO development roles in the traditional sense. They are building breadth and operational excellence, which is valuable, but it’s not the same as developing strategic capability.

Your succession challenge is different: identifying and developing someone who can eventually do your Level 5 work. That might come from running a complex regional operation, but it might also come from enterprise-wide strategic roles, major transformation leadership, or new business development.

The Board Conversation

Any competent board will ask about structure and succession as expansion accelerates. What they should be probing:

• Does the CEO have clarity about what level of work the expanded organisation requires?
• Is the current structure actually fit for purpose, or is it an interim compromise?
• Do we have honest assessments of leadership capability at the next level down?
• What is the succession risk if the CEO leaves in the next 12 to 24 months?
• Are we developing strategic capability, or just operational breadth?

The board’s job is not to design the structure. That’s management work. But the board should absolutely satisfy itself that management has thought this through properly, with appropriate expertise, and is not simply adding businesses without considering the organisational capability required to run them effectively.

The Culture Question

Structure isn’t just about boxes and reporting lines. It’s about how decisions get made, what behaviours get rewarded, and what it feels like to work in the organisation.

Moving from a unified business to a portfolio changes culture profoundly. Suddenly, different businesses might have legitimately different cultures, appropriate to their markets and competitive contexts. The question becomes: what’s the enterprise-wide cultural core that must be consistent, and what is appropriately variable?

Values like integrity, quality, customer focus might be non-negotiable across the portfolio. Operating styles, decision-making speed, risk tolerance might legitimately vary. Getting clear about this distinction prevents the cultural confusion that often accompanies structural expansion.

A Final Thought

The CEOs who navigate this transition well share a common characteristic: intellectual honesty. They are willing to interrogate their own capability, admit when structures are not working, and make difficult decisions about talent before problems become crises.

They also recognise that growth creates choices, not obligations. Just because you can acquire another business does not mean you should. Just because you could structure as a portfolio does not mean you must.

The right structure is the one that matches your strategic intent, your leadership capability, and your appetite for complexity. There’s no virtue in sophistication for its own sake.

But there is considerable danger in building a Level 6 portfolio with Level 5 thinking, or constraining Level 6 capability within Level 5 structures. That mismatch doesn’t resolve itself. It compounds until something breaks.

It’s best to ask the hard questions now.