Category Archives: Organization Structure

Hot Spots

“So, I am the one to fix this problem with my silos,” Regina slowly realized. “And I can’t just leave my managers in the room to figure it out. Where do I start?”

“Putting your managers in the room is not a bad idea, but they will not be able to figure it out without you. Your role is the integrator,” I said.

“So, I get them in the room, then what?”

“Your managers are competent at work flow charting. Get them to step back and draw, not a system flow chart, but a functional flow chart.”

“Not sure I understand,” Regina quizzed.

“Your managers can flow chart the steps in a system. This exercise would be to flow chart all the systems in your business model sequence. Take this list, put a box around each element and flow them sideways on the white board.

  • Marketing
  • Business Development
  • Sales
  • Contracting
  • Engineering
  • Project Management
  • Operations
  • QA/QC
  • Warranty

In this exercise, we are not looking for the problems inside each function, we are looking for the problems that exist as one function hands off work to the next. We are looking for transition issues, capacity issues, clarity, timing, dead space, delay, undiscovered defects, inspection points.”

“How will we find those?” Regina asked.

“This is a hot spot exercise, just look for the pain. Your managers may not be able to fix the issues, but they know exactly where they are.”

Dotted Lines Create Ambiguity

“Each department manager turned toward internal efficiency because you told them to. No waste, no scrap, predictable output,” I said. “But now you have multiple departments, multiple systems and subsystems. You have silos. Silos that compete. Silos that compete on budget. They compete for resources. They compete for your managerial attention. Most companies stay stuck here. It’s your move.”

Regina was thinking. Her eyes looked down, her vision went inside. “I am the problem,” she observed. “I told them to be this way?”

“You are the problem,” I agreed. “And you are the solution. Your departments are perfectly capable of creating those internal efficiencies, but those internal efficiencies have to be optimized. Work goes sideways through the organization. It starts with marketing, then goes to sales, then to contracting, then to operations, then to warranty, looping into R&D. Work gets handed off from one department to another.”

“So, I can’t just put all the managers in a room and tell them to figure it out?” she guessed.

“Your role is one of integration,” I nodded.

“Like all the dotted lines on the org chart?” Regina offered.

“Your dotted lines on the org chart have your best intentions. Intuitively you understand the horizontal cross-functional working relationships, that’s why you drew the dotted lines. But dotted lines create ambiguity. No one understands the specific accountability and the limited authority that goes with those dotted lines. So people make stuff up. And that’s where the trouble begins.”

The Problem is Normal

“Each department manager turned toward internal efficiency because you told them to,” I repeated.

Regina was stunned. She had difficulty seeing the root of the problem as her management directive.

“All crumbs lead to the top,” I said. “And, don’t think it’s because you are a bad manager. Every company has to become system focused at some point. It’s normal. But the solution to become efficient creates the next step of organizational friction. All these internally focused departments, these silos, have to work together.”

Regina’s look of surprise began to calm.

I continued. “If the problem comes from an internal focus by each department, where do you think we will find the solution?”

Regina turned her head. “With an external focus?” she floated.

I nodded, “Yes, and that’s where you come in. This is a higher level of work.”

You Told Them To

“It’s killing us,” Regina complained. “Our silos are killing us.”

“How so?” I asked.

“It’s like there is a little internal competition out there. It started with the blame game. Departmental managers in a meeting, pointing fingers at a problem. Not my fault, everyone said. Then it became CYA behavior. Departments began to build steps into each process to actually shift responsibility for problems to other functions.”

“Why do you think that happened?” I pressed.

“I don’t know,” Regina replied. “There was a time when I thought a little competition was appropriate. It seemed to help everyone perform at a higher level.”

“So what is happening, now that there is a little competition?”

“Our production department cranks up output, while our warehouse department tries to figure out what to do with all the finished goods. The sales department promises delivery with no visibility to purchasing, so we run out of raw materials. Production gets choked off and we run overtime while guys stand around with nothing to do. It’s a mess.”

“Why do you think it happened?” I repeated.

“I don’t know. It was like we just grew up into the problem.”

“You did. You just grew up into the problem. You told everyone to be efficient, no waste, no scrap. You wanted high utilization of precious resources. Each department went internal to re-sequence for that efficiency. It was a noble move and required at the time. Each department manager did it, because you told them to.”

Silos are a Normal Phenomenon

From the Ask Tom mailbag –

Question:
How do you overcome the obstacles of silos when the silos are the organizational culture and come from the top?

Response:
I originally posted this last week and then left you hanging as I went underground, buried in travel.

Silos, in an organization, occur as a normal phenomenon. It is counter-productive to growth and profitability, but it is perfectly normal and predictable. It happens.

Silos emerge as a natural by-product of stage three growth. To reduce the noise in Go-Go, there begins an internal focus to create systems. Systems are good. Systems create internal efficiency, internal predictability and a focus on profitability (profitable action).

_________Adolescence – internal focus on system creation
______Go-Go – define and document methods and processes
___Infancy – focus on sales, production, find a (any) customer

The problem is the internal nature of the focus. In adolescence, it is a required focus, but, as a solution to the problems of go-go, it creates internally focused silos that emerge as the next organizational challenge. Silos are normal, but will grind an organization to a halt, cap its growth and make everyone miserable.

To continue its normal growth, a process of integration must occur.
____________Prime – multiple systems/sub-systems create friction, integration required

This is no easy task, and requires capability at S-IV level of work. The saga continues. Tomorrow, I promise.
______

This model is adapted from a comparative study of two models, Corporate Lifecycles, Ichak Adizes and Requisite Organization, Dr. Elliott Jaques.

Temper Tantrums Don’t Work

From the Ask Tom mailbag –

Question:
How do you overcome the obstacles of silos when the silos are the organizational culture and come from the top?

Response:
Whenever I look at organizational underperformance, total throughput, all crumbs lead to the top. The culture an organization has, is the culture the organization deserves. And, all crumbs still lead to the top.

But your question is “What to do?”

Temper tantrums don’t work. Parents know that. Most management consultants who think they have the answer are behaviorists who have no children.

Visually, we can draw pictures of it. Interruptions in workflow, rough hand-offs from one function to another, undiscovered defects blamed on another department. Some CEOs believe a little internal competition keeps everyone sharp, when the product of that strategy may be counter-productive.

But it works in sports? Yes, but sports are not organized to accomplish work. Sports are organized for entertainment.

Indeed, what to do? Comments?

The Symptom Goes Underground to Fester

WHY I wrote Outbound Air

Every company wants to go to the next level. Most have no clue what the next level is. This model provides guidance, anticipates predictable challenges and provides solutions to assist from one level to the next.

_______________Stable – challenge is sustaining the machine, relevance to the market
____________Prime – multiple systems/sub-systems integration
_________Adolescence – internal focus on system creation
______Go-Go – define and document methods and processes
___Infancy – focus on sales, production, find a (any) customer

This model guides us in the creation of structure. Organizational structure is the defined accountability and authority in the working relationships of the team. As the organization winds its way through these stages, its challenges assume false appearances, symptoms. Most think they have a communication problem or a personality conflict. They fall prey to resolving the symptom that only goes underground to fester.

It is only when the organization understands structure, that it can begin to define the accountability and authority necessary to get work done and that is WHY I wrote Outbound Air
_____

A detailed version of this model (SI-SVII) is contained in the appendix of Outbound Air. This model is adapted from a comparative study of two models, Corporate Lifecycles, Ichak Adizes and Requisite Organization, Dr. Elliott Jaques.

Necessary, But Not Sufficient

WHY I wrote Outbound Air

This subtle shift in the Prime stage is a precursor to the next level of organizational challenge. Everything we have examined over the past few days looks inside, the internal ticking. This subtle shift is a sea change of focus from internal to external. The organization has to maintain all the internal systems (functions) optimized and integrated, but that is no longer enough.

Sitting outside the organization is an external system that will now determine its fate. Sitting outside the organization is the market. Internally, the success of the company has built up a whole lot of overhead. This is no simple enterprise. Headcount blew past 100, perhaps 500 on its way to 1000. Simply sustaining the machine becomes its organizational challenge. But the internal efficiency and optimization is no longer sufficient.

If this organization is to survive, the strategic focus shifts to creating a clear and compelling vision that is relevant to the marketplace.

_______________Stable – challenge is sustaining the machine, relevance to the market
____________Prime – multiple systems/sub-systems integration
_________Adolescence – internal focus on system creation
______Go-Go – define and document methods and processes
___Infancy – focus on sales, production, find a (any) customer

The good news is, once the organization has nailed this down, it can relax, because markets never change. Just kidding. This begins a never-ending quest to remain relevant to a constantly changing market. Market responsive.
_____

A detailed version of this model (SI-SVII) is contained in the appendix of Outbound Air. This model is adapted from a comparative study of two models, Corporate Lifecycles, Ichak Adizes and Requisite Organization, Dr. Elliott Jaques.

Tear Down the Silos? Really?

WHY I wrote Outbound Air

Everything about the organization has been internally focused, first on survival, then on efficiency. This internal focus creates the next organizational problem. Roles grew into departments, departments grew into silos. Some companies try to tear down the silos, but that’s not the point (nor the solution).

We still need the dedicated function inside the company. The solution is NOT to tear down silos, it is to integrate them together. It requires an integrator, someone in the organization who can see the internal workings AND the external necessity of integration. It requires someone with the capability to look outside each system and define the connection points.

We imagine managerial relationships in a vertical way, even if we put the customer on top and the org chart upside down, we see managerial relationships vertically. But that is not the way work goes through the organization. Work goes sideways –

Marketing => Sales => Contract => Ops => QA/QC => Warranty => R&D

It is in this prime stage that we see the emergence of cross-functional horizontal working relationships. If the organization can successfully integrate their systems together, acceleration occurs, to the next wall.

____________Prime – multiple systems/sub-systems integration
_________Adolescence – internal focus on system creation
______Go-Go – define and document methods and processes
___Infancy – focus on sales, production, find a (any) customer

This model is adapted from a comparative study of two models, Corporate Lifecycles, Ichak Adizes and Requisite Organization, Dr. Elliott Jaques.

The Chaos of Go-Go Disappears

WHY I wrote Outbound Air

The organization re-sequences its methods and processes into coherent systems that bring efficiency, consistency and predictability into sharp focus. The chaos of Go-Go disappears and profitability emerges. The entrepreneur relaxes as cash flow improves. Sales volume increases as the market has higher confidence in the reliability of the product or service. The company offers a warranty program.

The roles defined in Go-Go grow up into departments where groups of people focused on the same function transform into teams. The system becomes more efficient as the focus turns inward, each step examined for time and motion, work hand-offs flow-charted for sequence, planning organizes resources, paring unnecessary elements. Every function goes through this transformation as the organization careens toward the next wall.

This internal focus builds the competence of internal teams, but the organization suffers the malady of the next level of friction. Those internally focused teams begin to compete for budget, resources and managerial attention. They stand next to each other and shout – “NO, look at me, pay attention to me.” One or two teams (departments) outperform, but the throughput of the organization grinds to a halt with the laggard teams setting the pace.

____________Prime – multiple systems/sub-systems create friction
_________Adolescence – internal focus on system creation
______Go-Go – define and document methods and processes
___Infancy – focus on sales, production, find a (any) customer

Many organizations get stuck and stay stuck. Some survive. Survival depends on a higher level of work.
______

This model is adapted from a comparative study of two models, Corporate Lifecycles, Ichak Adizes and Requisite Organization, Dr. Elliott Jaques.