Organizational Design for Process Improvement

Bizmanualz Solutions

Part 1 of a four-Part Series

Part 1: Organizational Design for Process Improvement
Part 2: Organizational Structure for Process Improvement
Part 3: Organizational Structure — Alignment by Product-Flow
Part 4: Organizational Leadership for Process Improvement

This month we are examining the organizational design principles that lead to the foundation required for successful process improvement programs. Tools like Six Sigma, Lean Thinking and Theory of Constraints are great but, if your organization is not designed for change then it just is not going to happen.

Organizational design is about corporate culture, organizational structure, and leadership behavior. This week we will discuss corporate culture.

Corporate Culture for Process Improvement

Does anybody want to change? Your 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.

Accepting New Ideas

Adoption Curve

New ideas follow an adoption curve. A new idea is introduced and then grows rapidly through to maturity and eventually enters decline. Organizations dedicated to process improvement (i.e. Toyota, GE) have very short Idea Adoption Cycles and are able to improve quickly.

What drives the Idea Adoption Cycle? There are two primary motivators: aspiration or desperation. Every organization uses one or the other to drive new ideas. Which one does your organization choose? Unfortunately, for most of us it is usually desperation over aspiration.

Fear is a powerful motivator used by many to get change started. Things like, “the company is going out of business unless we change�? or “you will lose your job unless you change�? are examples of fear motivating change. However, unless the organization is self-motivated to change, the result will only be temporary at best.

How long will it be before things improve and the organization goes back to the old habits? You know, profits improve, fear subsides, and complacency sets-in. Sound familiar?

Aspiration is the key. In order to create the self-motivation we need to paint a strategic picture of a more positive future. We need everyone’s buy-in. We need the organization to want to improve, to aspire to greater things. Without the organization’s buy-in we will have an empty process improvement program with limited effectiveness and very long Idea Adoption Cycles.

How do we shorten the Idea Adoption Cycle? We need to grease the wheels of change by reducing new idea risk.

Risk Aversion

Risk is the possibility of loss. Everybody is risk averse to some extent because we would prefer to keep what we have (know now) instead of taking a chance at gaining something we do not have (do not know now). We have discussed how desperation reduces short-term risk – change or else, what do you have to lose! But, how do you reduce the risk of new ideas with aspiration?

Fear comes from what we do not know. Confidence comes from what we know. Desperation is the result of a fearful organization decaying from status quo, whereas aspiration results from a confident organization built through education and effective training. W. Edwards Deming believed that knowledge is essential for creating value in a system, while fear is destructive to both the system and to individuals. We need to neutralize fear of the unknown with confidence from education of the known.

If you let fear govern your organization, then change will simply not take place because of the associated risk of failure, thus leading to desperate acts to regain motion. On the other hand, if you let aspiration guide your organization, then change will not only take place, but you will be creating a self-motivated, self-learning organization that will desire to continuously improve, which is what you really want.

Promoting Process Improvement

Leadership must clearly understand and communicate the motivation for change – they must get Buy-in. Are your visions and goals clearly communicated and understood by everyone in the organization? Ask yourself “What are you in business to do? How do you get it done?�? The answers should be clear, consistent, and concise from everyone. Without such clarity of purpose, your organization will not be able to transform objectives into results, which means it is not ready for change.

Leaders must determine whether the organization is ready for the disruption and uncertainty that is about to follow. No change management program occurs without some bumps along the way. In fact, you will often time see things get worse before they get better. That does not mean the management system is not working it just means that there is a lot of garbage in the system that must be worked out first. It is all a part of becoming a better manager.

In addition, leaders must provide the right incentives to empower employees: rewarding new ideas, providing resources for training, and allowing time for the organization to learn together and make mistakes. Learning occurs through trial and error until you get it right. And, even when you do get it right, you will find that everyone else has to get it right at the same time. The whole organization has to come together at the right time and place.

Deming was especially concerned with effective uses of motivation, and emphasized the motivating power of joy, satisfaction, and pride that occurs when everyone contributes to an effective system. He noted how many typical employee reward programs are contrary to appreciation for a system, and hurt, rather than help, morale. He also was concerned about organizational cultures based on fear, which is destructive to both the system and to individuals.

This week we discussed corporate culture and your readiness and willingness for process improvement. We learned how organizations accept new ideas, how risk affects change, and what leaders need to do to facilitate change. Next week we will look at the Org chart and the role it plays in Organizational Structure for Process Improvement.

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.

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