A simpler structure doesn't necessarily mean a simpler organisation

As Australia’s major banks reshape their operating models, the real test of simplification may not be how many management layers disappear, but whether the organisation becomes easier to operate.

Australia’s banking sector is undergoing another significant period of organisational change.

In October 2026, National Australia Bank announced plans to reduce its workforce by up to 2,500 roles, approximately 6 per cent of its workforce, as part of a broader effort to simplify its operating model, reduce duplication and improve productivity.

The announcement follows ANZ’s September 2025 restructuring, which included plans to remove approximately 3,500 employee roles and reduce its reliance on external contractors.

While the timing, circumstances and strategies of the two banks differ, their announcements share a common ambition: to create simpler, more efficient organisations with clearer accountability and faster decision-making.

These are understandable objectives.

Large banks operate in highly competitive markets, face considerable regulatory obligations and must continually adapt to changing customer expectations, technology and economic conditions.

But organisational simplification raises a question that deserves more attention.

When you simplify the structure of an organisation, what happens to the complexity that structure was managing?

Because removing management layers, consolidating functions and changing reporting lines does not necessarily remove the underlying complexity of the business.

It changes where that complexity sits, who is responsible for managing it and how decisions need to be made.

And unless those changes are understood throughout the organisation, simplification at the structural level may not translate into simplification at the operational level.

Complexity doesn’t disappear when a management position does

Consider what happens when two business units are brought under a single management structure.

Previously, each team may have operated with its own management responsibilities, decision-making authorities, procedures, reporting arrangements and established ways of working.

Consolidating those functions might eliminate duplication and create opportunities for greater consistency.

But the responsibilities associated with the former structure don’t automatically disappear.

Customers still need decisions. Employees still need guidance. Approval authorities must remain clear. Risk controls must continue to operate. Policies and procedures must accurately reflect the responsibilities of the people applying them.

The individuals assuming broader responsibilities may also inherit operational knowledge that was previously distributed across several experienced leaders.

Some of that knowledge will be documented.

Much of it may be embedded in established practices, informal relationships and years of experience navigating the organisation.

The challenge is not simply reallocating work.

It is ensuring that the people now responsible for that work understand the operational requirements, dependencies and decision-making frameworks they have inherited.

An organisation can remove duplication from its structure without removing duplication, inconsistency or ambiguity from its operations.

That distinction matters.

The hidden operating model

When organisations talk about their operating models, the discussion often centres on structures, functions, reporting lines, responsibilities and technology.

These are visible, relatively tangible elements.

But beneath the formal operating model sits an extensive network of organisational information that determines how the business actually functions.

Policies establish expectations and requirements.

Procedures describe how work should be performed.

Delegations define decision-making authority.

Controls establish how risks are managed.

Operational instructions help employees interpret and apply those requirements in their daily work.

These elements are connected, whether the organisation has explicitly mapped those relationships or not.

A change to a management structure may require updates to delegated authorities, escalation arrangements, approval procedures and control ownership.

A decision to consolidate two functions may expose differences in policies or working practices that previously existed independently.

Changes to one process can affect several other teams, particularly where activities cross organisational boundaries.

In a bank, those dependencies can extend across lending, customer servicing, operations, technology, finance and risk.

And while each individual policy or procedure may be accessible, understanding how all these requirements interact is considerably harder.

The complexity of a bank isn’t just found in its organisational chart. It’s embedded in the relationships between everything the organisation expects its people to do.

That’s the operating model that is often hardest to see.

When accountability changes, operational alignment must follow

Structural simplification often aims to make accountability clearer.

Fewer management layers, broader responsibilities and streamlined reporting arrangements can create opportunities for more effective decision-making.

But accountability cannot be established through reporting lines alone.

It must also be reflected in the systems, policies, processes and authorities that support decisions.

Consider a simplified example.

A bank consolidates two business lending functions, bringing their management responsibilities together.

The new structure establishes a single leader accountable for both areas.

But what happens if the underlying lending procedures contain different escalation requirements? What if an approval matrix still refers to a position that no longer exists? What if related risk controls remain assigned to the former business unit?

These are hypothetical examples, not findings about any particular bank. They illustrate the practical dependencies that organisations need to consider when responsibilities change.

Resolving them requires more than communicating the new structure.

It requires understanding how existing requirements connect to the people, functions and processes being changed.

And identifying which of those requirements need to be reviewed, revised or reconciled.

The more complex the organisation, the harder it becomes to establish that understanding through manual processes alone.

Why this matters for banking governance

For banks, operational alignment is not simply an efficiency consideration.

It is also central to effective risk management and governance.

APRA’s Prudential Standard CPS 230, Operational Risk Management, requires regulated entities to manage operational risks, maintain effective internal controls and support the resilience of critical operations.

The standard also addresses change management risk and the responsibilities of senior management for operational risk across business operations.

This creates an important connection between organisational change and the ongoing effectiveness of the operating environment.

When responsibilities are redistributed, organisations need to understand whether control ownership, oversight arrangements and operating procedures remain appropriate.

When processes change, they need to consider the consequences for related activities and risk controls.

And when new management structures are introduced, the organisation needs to maintain clear accountability for the decisions being made within them.

These requirements exist regardless of whether a restructure is driven by cost reduction, technology investment, strategic repositioning or growth.

The challenge is not that organisations lack governance frameworks.

Banks already invest heavily in risk management, compliance, audit and operational controls.

The more difficult question is whether those frameworks remain consistently connected to how the organisation operates as it changes.

A control can be documented without being properly reflected in an updated procedure.

A policy can be current while related operational guidance remains outdated.

Responsibilities can be assigned while the dependencies between them remain poorly understood.

This is where organisational alignment becomes a practical governance issue.

The institutional knowledge problem

There is another dimension to structural simplification that deserves consideration.

When experienced employees leave an organisation, they take more than their job descriptions with them.

They may hold detailed knowledge of why particular processes exist, how exceptions are managed, where operational dependencies lie and which organisational requirements need to be considered before decisions are made.

Some of this knowledge is documented.

Some exists in relationships between teams.

And some is simply understood because the individuals involved have spent years working within the organisation.

When responsibilities are consolidated, that knowledge needs to remain available to the people assuming them.

Otherwise, organisations can find themselves reconstructing the rationale behind existing policies, decisions and procedures long after the people who understood them have moved on.

This doesn’t mean organisations should preserve every role or established practice.

Simplification may be necessary and valuable.

But it does mean that knowledge continuity needs to be considered as part of the change, not merely as a handover activity.

The objective should be to remove unnecessary complexity without losing the understanding needed to manage the complexity that remains.

The limits of document consolidation

One common response to organisational complexity is to consolidate information.

Bring policies into a central repository. Standardise documents. Improve search. Make guidance easier to access.

All of these steps have value.

But information accessibility and organisational alignment are not the same thing.

An employee might be able to find every relevant policy and still be uncertain which requirement takes precedence.

A manager might have access to multiple procedures without knowing whether they contain conflicting instructions.

A risk team might maintain an accurate control register while the operational guidance used by employees has not caught up with a change in accountability.

The problem is not necessarily the availability of information.

It is understanding the relationships between that information.

Which policies govern a particular process?

Which procedures depend on a specific delegation?

What else is affected when a requirement changes?

Where do different business units apply inconsistent interpretations of the same obligation?

And how does the organisation identify those issues before they become operational problems?

These are difficult questions to answer when organisational information is treated as a collection of separate documents rather than as an interconnected operating framework.

From periodic restructuring to continuous alignment

Perhaps the more significant opportunity is to reconsider how organisations maintain operational alignment between major transformation programs.

Traditional operating-model reviews are often triggered by substantial events: a new strategy, an acquisition, a change in leadership, a regulatory requirement or pressure to reduce costs.

But organisational complexity doesn’t accumulate only during major transformations.

It builds gradually.

A new policy is introduced.

A responsibility moves between teams.

A procedure changes to accommodate a new system.

A temporary workaround becomes an established practice.

An approval process is modified, but related instructions are not.

Individually, each decision may be entirely reasonable.

Over time, however, the relationship between what an organisation intends, what its policies require and how its people actually work can become less clear.

The answer is not constant restructuring.

Nor is it an endless cycle of document reviews.

It is developing a stronger, ongoing understanding of how organisational requirements connect, where inconsistencies may be emerging and what needs attention when something changes.

Advances in technology create opportunities to support that understanding by analysing relationships across organisational information and identifying potential dependencies, gaps and contradictions.

These capabilities should support, rather than replace, the expertise and accountability of business leaders, risk professionals and policy owners.

Technology can help identify where a possible inconsistency exists.

Determining its significance and deciding how it should be resolved remain matters for appropriately authorised people.

The opportunity is to give those people better information and a clearer picture of the organisation they are responsible for managing.

That could fundamentally change how businesses approach operational alignment.

Rather than trying to reconstruct relationships during each major restructure, organisations could develop a more continuous understanding of how their operating requirements fit together.

A different measure of successful simplification

NAB and ANZ’s restructuring announcements have understandably attracted attention for the scale of their workforce changes and the financial outcomes they are seeking.

Behind those numbers are employees, careers and families facing considerable uncertainty.

That human dimension matters.

And from an organisational perspective, there is another important measure of whether simplification succeeds.

Not simply how many roles have been removed.

Not just how many management layers have been eliminated.

And not only whether the projected cost savings have been delivered.

The longer-term test is whether the organisation becomes genuinely easier to operate.

Are accountabilities clearer?

Can employees make decisions with greater confidence?

Are policies, procedures and controls consistent with the new operating model?

Can leaders understand the implications of change across the organisation?

And can the business maintain that alignment as it continues to evolve?

These are the questions that determine whether simplification delivers more than a leaner structure.

Because a simpler organisational chart doesn’t necessarily mean a simpler organisation.

The real opportunity is to make the complexity underneath that chart more visible, more understandable and easier to manage.

And that may ultimately be the more meaningful transformation.

Sources and further reading

• National Australia Bank, Simplifying NAB to better serve customers, 20 October 2026.
• ANZ, ANZ announces changes to better focus on priorities, September 2025.
• ANZ, CEO and CFO remarks — ANZ 2030 Strategy Update, October 2025.
• Australian Prudential Regulation Authority, CPS 230 — Operational Risk Management, version effective 1 July 2026.