Tag Archives: organizational structure

You Told Them To

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“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.”

Temper Tantrums Don’t Work

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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

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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

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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?

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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

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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.

Smile Training

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WHY I wrote Outbound Air –

As the organization grows, the chaos of Go-Go is killing the organization. The company has clearly defined its methods and processes, but the sequence is not necessarily efficient. Mom and Pop, who started the organization, long for the days when they could just do everything themselves. This motley crew of people (the team) is going through the motions, doing what they have now been trained to do.

For the most part, the product or service makes it to the customer, and for the most part, the customer is happy. But as sales volume grows, the chaos of Go-Go creates enough substandard output that people begin to notice. Deadlines are missed, defects become visible. The organization reacts by creating a customer service department, to apologize and smile.

But smile training doesn’t cut it. The company is now in pursuit of some sort of consistency, so that every product consistently meets its specification, so that every service meets the standard, every time. The strategic focus turns to a system focus.

____________Adolescence – system focus
________Go-Go – define and document methods and processes
____Infancy – focus on sales, production, find a (any) customer

The methods and processes are examined for sequence and priority to create a system that is efficient, predictable and most of all profitable. The bank wants that line of credit paid off.
______________
Homage to Ichak Adizes, Corporate Lifecycles, 1988.

The Entrepreneur Becomes Prey to the Charlatan

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WHY I wrote Outbound Air –

As organizations struggle with (normal) growing pains, I watch entrepreneurs grasp at futile straws to make the pain go away. Often the solutions they seek aggravate the condition. Most often, the effort is to find a quick answer to a complex circumstance.

The entrepreneur becomes prey to the charlatan. There is a multi-billion dollar industry dedicated to fleecing CEOs looking for a quick fix. Outbound Air is a warning. The helpful stranger is not necessarily your friend.

Most issues that organizations face are structural. The symptoms look like breakdowns in communication or personality conflicts. They are NOT. Most challenges that organizations face are structural.

Structure is the defined accountability and authority embedded in the working relationships of the organization. Most companies do not define those accountabilities and that is where the trouble begins.

“Oh, we must have a communication problem.”

No, you don’t have a communication problem, you have an accountability and authority problem.

“Oh, we must have personality conflict.”

No, you have an accountability and authority conflict.

This is the beginning of WHY I wrote Outbound Air.

What Comes After Go-Go?

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WHY I wrote Outbound Air –

I watch organizations struggle. It is normal, uncomfortable, but normal. This organizational discomfort causes the founder to look for answers, in all the wrong places.

Go-Go is the most fun stage for any business. There is energy and enthusiasm. With a sustained momentum of sales, there arises a new feeling, invincibility. The entrepreneur says, “We faced the odds against us and we didn’t die. Our customers love us. We have a superb business model. Flawless execution of a brilliant business plan. We could take our business model and conquer any industry.”

This organization bounces inside its geography, opportunistic in its behavior. Its organizational challenge is focus. It cannot figure out if they are in the real estate business or the shoe business, because they believe they could make a fortune in both.

The momentum of sales has turned the negative cash flow of infancy into revenue streams of Go-Go. With a credit facility for expenses, this organization is on top of the world. The customer is happy and promises to buy more. But a subtle inspection in the wake of this organization produces body bags and friction. It is a wonder there is not more collateral damage. Efficiency is elusive. Profit is fleeting (in spite of the appearance of cash).

All of this is normal, but the entrepreneur is stumped, wondering why the organization does not run more smoothly and why it staggers in inefficiency. There are many who would provide answers, but most would be wrong.

This is the beginning of WHY I wrote Outbound Air. Tomorrow, the next stage.

The Manager Lives and Dies by the Decision

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From Outbound Air –

“I have an issue where I could use your help,” Jim explained to the group. “And I think your understanding will have impact all the way to the top of this organization.

“As a manager, you each have a team,” he continued. “And you defined a manager as that person held accountable for the output of the team. So, if there is a decision to be made, related to the objective for that team, who is accountable for the consequences of that decision? Is it the manager, or the team?”

“Are you kidding me?” Johnny replied. “It’s the manager. If it turns out to be a wrong decision, we don’t fire the whole team, the manager is accountable.”

“Then, whose decision is it to make?” Jim floated the question, the same question that frustrated Kevin DuPont. “Whose decision is it?”

“It’s the manager’s decision,” Johnny responded. “The manager is accountable, the manager lives and dies by the decision.”

“But what if the manager doesn’t have all the facts to make an informed decision,” Jim protested, “and needs the team to participate. Needs the team to gather the facts, analyze the facts. Then, whose decision is it?”