Tag Archives: organizational structure

The Struggle for Emerging S-IV

From the Ask Tom mailbag –

Question:
It took a long time, but our company has grown. Our business model is a distributor, it’s all about supply chain for our customers. Because our business model is driven by the logistics of incoming and outgoing material supply, we recently promoted our warehouse manager to VP-Inventory Control. For us, it was more than just a change of role title. Our warehouse manager took us through re-binning our inventory, bar coding SKUs, RFIDs on serialized product. He is a really bright guy. But his promotion to VP-Inventory Control seems to have gone to his head. With his new-found power, he has emerged as a prima-donna. In our executive team meetings, he believes that inventory control should be the deciding factor in every business decision for the company. If he keeps this up, he is going to get fired.

Response:
Indeed, the move from a Stratum III (S-III) inventory manager to an (S-IV) is a dramatic change in level of work.

  • S-III – System (creates the system, monitors the system and improves the system)
  • S-IV – Integration of multiple systems and sub-sytems (attention to dependent systems, interdependent systems, contingent systems and bottlenecks)

The focus at S-III system level is internal. We demand each of our systems be efficient, profitably leveraging its resources for maximum output. Your inventory manager did just that with a bin system, bar codes and RFIDs. Kudos.

The focus at S-IV is integration. With an internal focus on inventory management, his new role is to assist in the integration of inventory with all the other systems in the company. It is no longer a matter of profitably leveraging resources for maximum output, but optimizing output with the other systems in the company. It is a matter of how one system’s output (reinforcing system) is impacted by another system’s output (balancing system).

This requires the focus for the new S-IV to transition from internal to external. You don’t have a prima donna personality conflict. You have not clearly defined and communicated the new role, nor its differences from the prior role.

You also skipped a step. How did you know if the inventory manager was ready for these new accountabilities? You didn’t. You blindly promoted and now you have a bit of a chocolate mess. The step you missed, prior to the promotion, was assigning S-IV project work, coaching and evaluating the output. Team members should NEVER get a promotion. They earn promotions by successful completion of project work similar or identical to the work in their new role. -Tom

Without This, a Void Filled With Shenanigans

I am told that we need more leadership around here. I am told that we manage things, but we lead people.

My experience tells me otherwise.

I believe, especially as companies grow larger, that we need more management. I would concur that it is very difficult to manage people. People resist being managed. But, it’s not the people who need to be managed, it’s the relationships between those people. In a company, it is the working relationships that need to be managed.

I hear about personality conflicts in an organization. But, I don’t see a personality conflict, I see an accountability and authority issue. In an organization, we rarely define the accountability and authority in the working relationship. We never defined where people stand with each other, who can make the decision, who can make a task assignment and who is accountable for the output.

We take relationships for granted. We take for granted that people know how to behave with parents, with siblings, with teachers. We take for granted that people know how to behave as managers, but, in most cases, managers behave the same way they were treated by their managers.

There is a science to all this. It has to do with context. Effective managers are those who create the most effective context for people to work in. It is that unwritten set of rules that governs our behavior in the work that we do together. There is a science to context.

Organizational structure is context. It is the defined accountability and authority in our working relationships. Without it, people fill the void with all kinds of shenanigans. Not their fault. It is the responsibility of the manager (including the CEO) to set the context.

Don’t Get Rid of Your Silos

This Thursday, Nov 3, 2016, in Fort Lauderdale, public presentation of Management Myths and Time Span. Register here.
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From the Ask Tom mailbag –

Question:
In your workshop, for the bottom three layers, S-I-II-III, you said there was an internal focus. What happens at S-IV and S-V?

Response:
The Basic Building Block (S-I-II-III) populates every organization, no matter how big or how small. These layers have an overriding internal focus. Why? Because, we told them they had to be internally focused. We (S-IV and S-V) created very specific work instructions, to be efficient, profitable, no waste, no scrap, high utilization of available resources. Those work instructions are internally focused.

S-V – Business Unit President – Internal AND market focus
S-IV – Internal AND external system focus (multi-system integration)
S-III – Internal system focus
S-II – Internal implementation focus (make sure production gets done complete, accurate, on-time)
S-I – Internal production focus

To be effective at S-IV requires a combined internal and external system focus. As the organization grows, it creates more than one system. It ends up with multiple systems and sub-systems. Individual roles grow up into teams. Teams are created inside a single function, or department. With multiple departments (multiple systems and sub-systems) we observe the silo effect. Silos don’t get along with other because they are internally focused.

This internal focus is normal. We told each S-III system to be internally focused, but now we have a silo problem. You likely heard you need to get rid of your silos. Wrong. You need those silos AND you need those silos to be internally focused (efficient, profitable and predictable). The resolution to the silo issue is not to get rid of them, but to integrate them together.

Multi-system integration at S-IV requires an internal AND an external focus. Roles at S-IV have to be able to see outside a single serial system and understand the impact of one system on another system. Roles at S-IV are integration roles, optimizing multi-system output and transitions or work handoffs from one system to another system.

Some companies stay stuck with silos. Some resolve this organizational friction. But to resolve it, requires capability at S-IV, integration, a holistic look at the organization. -Tom

The Danger of Missing Stratum III

Registration continues this week for Hiring Talent in the Heat of the Summer. Find out more – Hiring Talent.
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From the Ask Tom mailbag –

Question:
Our company somehow always manages to pull the rabbit out of the hat, put the fire out that saves the refrigerator, crosses the finish line crawling through glass. But, we can never relax. Every major project is drama. Every major project is the one that will put our company over the top, but we never quite make it. We are always in a state of overwhelmed. Don’t get me wrong, our customers are very happy and return to us, project after project, but it is such a struggle. We never get to breathe, we never finish in stride.

Response:
Your company is operating at S-II (implement), in a market that requires S-III (system). If your organization is completing one project well, what does it get? Another project.

If your organization is completing two projects well, what does it get? A third project. How does it do the third project? The same way it does projects one and two. So, what does your organization get? Another project.

But, what if your organization got fifty projects? How would it do fifty projects? Certainly, not the same way it did projects one and two. Most S-II companies would kill to get 50 projects, not realizing that the 50 projects will kill them. What’s missing? S-III (system) capability.

S-III stands back from the 50 projects and sees the common pattern, extracts that pattern into a system. The system optimizes resources, reduces waste and minimizes effort. The company that wins the race is the one that goes the fastest with the least amount of effort.

S-III (system) brings consistency of output, it’s always the same. Consistency of output yields predictability of output, so we can codify our system. This predictability helps us understand the real cost, now predictable, so we can build in reasonable profit.

Whenever I hear about a profitability problem, I never look for what‘s causing the problem. I always look for a who. In this case, it is a who, with capability at Stratum III. -Tom

Breakdown in Communication is Only the Symptom

From the Ask Tom mailbag –

Question:
You talk about how most problems are structural problems. I don’t get it. Our company has a communication problem. Because people don’t talk to each other, at the right time, balls get dropped. If we could just communicate better, things would go smoother.

Response:
You think you have a communication problem. And, you can have all the communication seminars you want, you will still have breakdowns in communication and balls will still get dropped.

You have a communication symptom of a structural problem. Structure is the defined accountability and authority in working relationships. You have a communication symptom because the working relationship between two people was never clearly defined.

As the manager, you know specific information should be communicated at a specific time, and you assume the two teammates will figure out what (needs to be communicated) and when. So, when that doesn’t happen, you think you have a communication problem. That is only the symptom.

The communication never happened, or didn’t happen at the right time, because, as the manager, you never required the information be passed on at a specific time. As the manager, you never defined the accountability in the working relationship, so the two teammates were left to twist in the wind.

You have a structural problem (defined accountability), with a communication symptom. Define the specific accountability and the communication symptom fixes itself.
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Twelve Months From Now

I repeated my question. “What things do you need to pay attention to, that will have an impact one year from now?”

“This company is pretty stable in what it does,” she replied. “We may replace a machine or our volume might go up or down. But what really changes, is the people. You never know what is going to happen with the people.” Melanie’s mind began to race like she had just discovered uranium.

“You’re right,” she continued. “The biggest thing that always changes, is the people.”

“And even if the people don’t change, the people change. Even if it’s still the same people, they are not the same people.”

Melanie’s discovery of uranium was shifting to panic. This new world that opened up just a few seconds ago, suddenly got very scary.

“So, I am responsible for knowing that, a year into the future?” she asked.

I nodded.
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Watch for the release of our online program – Hiring Talent 2016, scheduled for Jan 15, 2016.

Being Busy

“You were promoted because your manager was promoted. I didn’t think you were ready to make the move from supervisor to manager, but the position was open and the COO was impatient. He is now having second thoughts when he looks at your turnover statistics.”

Melanie was quiet. Her voice, calm. “I didn’t know that. But you said two of my supervisors quit because they graduated night school and got better jobs. I can’t help that?”

“We found out in the exit interview. They had jobs lined up three months before they gave you notice. And you didn’t know.”

“But how was I supposed to know. We stay pretty busy around here,” she protested.

“Melanie, the job of being a manager is not about being busy. It’s not about scrambling to save the day. As a supervisor, you were effective at that. Now, it is killing your effectiveness as a manager. As a manager, your role is completely different.

“You said you could anticipate things, as a supervisor,” I continued. “You said you could see the future. I need you to see even further into the future. As a manager, I need you to think out 12 months.”

Melanie shifted, sat up, “But, who knows what is going to happen a year from now?”

“Indeed,” I said. “What things do you need to pay attention to that will have an impact one year from now?”
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Watch for the release of our online program – Hiring Talent 2016, scheduled for Jan 15, 2016. Here are some responses to the program.

“Drilling down to get to the core of what candidates actually did and were responsible for was a big take away for me. Before this course, I would have moved to the next question without getting the answer I needed to make an informed decision as people do try to answer what you want to hear not with what they have demonstrated they are capable of.”

“There were two ideas that were the most helpful to me. One was taking the time to develop a set of interview questions for each role that focused on how the candidates meet the job requirements. The other idea that was helpful was the decision matrix, especially when considering a number of qualified candidates.”

“The biggest concept that is sticking with me is the importance of the interviewer controlling the interview so that they obtain the important, detailed information from each candidate regarding the candidate’s skills, capabilities and attitudes. It is so easy for the candidate to control the interview and “dazzle” the interviewer with made-up answers that are pleasing to the ear but not necessarily true. This program taught us not only that it is important to create specific questions that elicit the truth from candidates, but it taught us HOW to create those questions. It was extremely helpful that we created questions for an actual job that exists in our company because it made it easy to apply the concepts of the course to our own real situations at work.”

Transition From Supervisor to Manager

“Do you know why you were promoted from supervisor to manager last year?” I asked.

“Because, I was the best darn supervisor the company had,” Melanie replied.

“And, being the best supervisor, what did you do that none of the other supervisors were able to do?”

“Oh, that was easy. I could see the future. I could tell when something was going to get screwed up, weeks ahead of time, and I could adjust the schedule to make sure we stayed productive. You know, if you reject some raw material because it’s out of spec, that means you have to shift some stuff around.”

“Yes, you were one of the best schedulers around.”

“What do you mean, were?” quizzed Melanie. “I still am.”

“Not exactly. Do you know why you were promoted from supervisor to manager last year?”

The Clarity of Accountability

“it’s funny,” Byron thought out loud. “You always ask me, as the manager, about my contribution to the problem. Immediately, I always think – Who? Me? I didn’t contribute to the problem.”

“And, what have you discovered when you deny accountability?” I asked.

“I just have to stop. I have always confronted my team with blame-colored glasses. When I realize that I am the one accountable for the output of my team, everything changes. When I realize that I am accountable for the output of the team, I take ownership. Ownership is a powerful stimulant for caring about my team. Constructive coaching automatically follows, not because I have to, but, because I am accountable.”

“And your team?”

“They change too. They are no longer on the receiving end of blame, but are now, part of a team, supporting me, as their manager,” Byron nodded.

“And did that change happen because you circled the team to sing a song?”

“No, it happened because we got clear about accountability.”

But, We Have an Org Chart

“But, everyone understands the structure. Everyone knows who they report to. I mean, we have an org chart,” Andre protested.

“And, I said – clear recognition of individual team members, each with individual accountability in clearly defined working relationships. That’s different and rarely exists. Tell me how things work around here,” I asked.

“The managers tell everybody what to do and then correct their mistakes,” Andre looked puzzled at his own response.

“Exactly, in what you just described, which is typical for most organizations, I have no clue who is accountable for the work output. I have no idea of the work of the manager. And, I have no idea how people work together when neither is each other’s manager. In the absence of clarity, people make things up, on their own and that is why you see petty bickering, overt passive-aggressive behavior, borrowed staplers not returned, people eating other people’s lunch (metaphorically). That is why you see bright ideas, ignored or made fun of. Project assignments are hoarded and protected. Promotions are based on favoritism.” I stopped. Andre’s eye were wide open.

“How long have you been watching us?” he asked.

“I think I have been here the better part of ten minutes,” I replied.