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Inside the August issueQuestion of the month: What is the benefit of alignment by product-flow over alignment by function? Find the answer at the end of this newsletter.
BY Chris Anderson This month we examined organizational design principals including corporate culture, organizational structure, and leadership behavior. Organizational design is integral to the success of process improvement programs. successful process improvement programs. Tools like Six Sigma, Lean Thinking and Theory of Constraints are great, but without the right culture, structure and leadership, change will keep eluding your organization. Corporate CultureYour corporate culture represents your readiness and willingness to change. How well does your organization accept new ideas for development and implementation? How much risk can your organization handle? Moreover, how does your leadership promote change? These simple questions provide the answers to your readiness and willingness for real change management to occur. Read more about Corporate Culture… Organizational StructureYour org chart or organizational structure could be affecting your process improvement efforts. However, the far stronger impact is likely being caused by the evolutionary processes that your organization underwent to get to the current state. One of the core causes of organizational dysfunction today is too much focus on span of control—the number of people directly reporting to you. Competent workers have little need for a manager to guide them. Therefore, span of control is inversely proportional to subordinate competence, trust and layers of management. Read more about Organizational Structure… Alignment by Product-FlowBy increasing the number of employees each manager supervises, an organization "flattens” allowing productivity to increase. But, to realize this productivity increase you will need to consider the total cost of ownership and ensure that your workers are competent through training and aligned to the product flow instead of by function. Instead of a sub-optimized departmental view of individual budgets, goals or priorities, there needs to be a systemic focus on improvement. After all, the customer just wants the finished good or service at the lowest possible price. This is the total cost of ownership or the sum of all costs required to bring the product to market. Read more about Alignment by Product-Flow… Organizational LeadershipLeadership is about communicating vision, strategy and goals & objectives. An organization will inevitably head towards desperation if its leaders fail to have a vision to move the organization beyond status quo. Leaders consistently facilitate the changes required to realize their vision, creating a dialogue, a sense of community that unites disparate groups within the organization. What is the difference between a leader and a manager? The manager gives orders, describes the objectives, and measures the activity to see that the work gets done. Leaders, on the other hand, are the ones that everyone turns to for an explanation of why the job needs to be done. Read more about Organizational Leadership… Organizational Design plays a crucial role in the success or failure of your process improvement initiatives. A culture of aspiration, motivation and confidence can counterbalance the instinctive behavior of risk aversion usually associated with change. Equally important are your organizational structure, trust between management layers and employees, and leadership's ability to form and communicate clear vision and strategy. The trick is to understand that, besides the process improvement program you chose for your organization, you alos have to carefully examine organizational design issues to ensure the sucdess of the program you choose. To learn more about using process improvement programs for your organization attend the next How to Align a System of People and Processes for Results class. If you are eager to learn more about creating more order out of the chaos you are feeling at work then the How to Create Well-Defined Processes class is right for you. ISO 9000 Quality Auditor classes are forming now for Internal Auditor or Lead Auditor. Reader FeedbackAs always, we thank you for all thanks for all your feedback, including questions and comments about possible topics for the future. We also receive requests for clarification on certain parts of our articles and the general topic of developing policies, procedures and processes. This mode of communication, where we send you a newsletter and you write back, is mostly one-to-many (or many-to-one). To better facilitate this rich exchange of ideas, Bizmanualz will launch a virtual discussion forum in September. This new forum will enable you to engage in a many-to-many communication with thousands of other users in our list who share a common interest in policies, procedures and processes. We will send more details and sign-up instructions in a few days. I urge you to join the forum and benefit from the exchange of ideas. On That NoteAnswer to this month's question: Alignment by product-flow takes into account the total cost of ownership—what it costs the system to bring its products and services to market. After all, the customer only cares about total value, not how your organization is structured. Most organizations prefer to align by function and create departments like sales & marketing, purchasing, or production to achieve economies of scale and specialization by tasks. Instead of working as parts of a system to support product flow, departments tend to sub-optimize their areas by focusing on their goals. Next month we will discuss the organizational design foundation required for successful process improvement including corporate culture, organizational structure, and leadership behavior. Let us know if you'd like any specific topic addressed in our future article-series. This concludes our discussion on process improvement. Next month we will discuss IT and MIS which are gaining in influence and impact as technological advancement necessitates the involvement of these areas in many job functions. Let us know if you'd like any specific topic addressed in our future article-series. Best regards, |
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