Tuesday, February 9, 2010

Describe Your Organization's Structure...

When I ask someone to describe their organization's structure, the response is almost always some variation on the classic Organization Chart or Facility Tour.

In the org chart, "the service team reports to the project leader, who reports to the business services manager, who reports to the director of information services, who reports to the CIO who reports to the CEO and the board." Or, "We've got purchasing over here, accounting there, research at the 6th Street offices, marketing here, production out back with shipping at the east end of the building and receiving at the south. The service department is through those doors, and reception is out front by the executive offices."

What's interesting is that neither approach comes close to capturing what the organization actually does, how they actually do it, who actually works with whom, and how the organization actually makes money or otherwise fulfils their mandate.

When you look at the FLOW of work through an organization, using process maps, flow charts, value stream maps or other tools, you always find that the way the work actually gets done has very little to do with the Org Chart or the department-centric Facility Tour.

Work is messy. Work crosses departmental boundaries.  The relationships that really matter day-to-day are NOT the relationships so diligently plotted on the org chart. The way the work really flows through the organization does NOT conform to the discrete departments we so rigorously manage.

A key first step on a continuous improvement journey is to start describing your organization's structure in terms of flow, in terms of what actually happens, in terms of who actually needs to interact with whom, and what information exchange is necessary to make everything function. This is cross-discipline cooperation, this is value-stream management, this is "we're all in this together" rather than "my department saved 6% this quarter."

Many businesses don't have a clear map of even their most important processes. Most workers don't really know how they fit into the system, into the flow of value to the customer. If you've never looked at these Lean principles and tools, you are falling behind your global competitors.

Take a look, and start thinking of your organization in terms of "How we do what we do", rather than "Who reports to whom" or "What department am I in."

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