Guest Article
Organizational Reliability

Silos, Contention and Waste..... Oh My!
By Don Burnstine and Eric Meger
© 2006 Clarity by Design

“That department is growing an empire.  You can’t get any cooperation from them.”

 “Why can’t I get what I need from those guys?”

 “Another half-day of meetings… arggh!!  We don’t accomplish anything. We just…. meet!”

“Another slippage!  I thought our new PDP process fixed that.  What slipped through the cracks this time?”

These kinds of comments are heard in far too many large and small organizations. This is 2006.  Why do these symptoms keep recurring when we have been talking about them for more than 40 years with the same level of frustration?   They cost a lot of money in rework, redo, reconfigure, returns, lost customers, lost opportunities, lost time, and poor morale, as well as much aggravation and emotional upheaval.  We keep spending and spending and spending to resolve them with one type of theory or tool set after another.  Yet they persist.

Our name for these symptoms is Organization-itis. Organization-itis is an area of “inflammation” that irritates, distracts, reduces effectiveness and inhibits the flexibility of any organization, just as bursitis and other -itis’s do in the human body.

 Organization-itis is one of the most insidious, painful and costly problems facing most organizations.  And it is hidden in plain sight.

There are many kinds of such -itis’s. Here are four:

These and other –itis’s are most often the result of incomplete organization designs. All managers create org charts and their variations to assign accountability and responsibility—but the interrelationships between the people and departments are left to individual groups to sort out.

Why aren’t organizations more reliable?

A reliable organization has the same definition as a reliable information system: Any technical system is reliable if it meets expectations consistently — that is,
if it produces the outputs that it was designed to produce, with the expected quality, so long as the system is maintained properly. If a technical system doesn’t run smoothly, produces erratic output, or runs with poor efficiency, there is a diagnosis and repair process that we know how to tackle because the system and its interfaces were completely designed.

Organization design in most organizations begins and ends with an org chart. This tool is the correct fundamental starting point for designing the functional work breakdown and the accountability structure for the management of the organization. Some time later, problems develop and the org chart is revised
(or people are added or removed).

The core issue is that the org chart only addresses part of a complete design. Identifying the organization elements and their reporting structures (departments, divisions, business units, etc.) handles the vertical relationships. However, most work moves across and around the organization. Leads are generated by marketing, leads turn into orders in sales and orders turn into products in manufacturing, etc. These activities don’t flow up, over and down the paths shown on the org chart. They flow across and between the functions at various levels. Despite the fact that all of the value created for customers by an organization happens this way, these cross-functional interfaces are usually not designed in a disciplined manner.

By interface, we mean the point at which a request is received and a deliverable is transferred in return.  It is not the workflow but the interactions between the parties that is relevant here.  We are talking about points at which expectations are established, implicitly or explicitly.

What usually happens is that the staff and management in each group are expected to develop their own procedures and processes to ensure that their people and processes work well with their colleagues. Because most people are dedicated and smart, things often do get done. At other times however (and at least sometimes in every organization), the processes and procedures of one group don’t fit well with those of another. Silos, contention, delays and waste (Organization-itis) are the resulting symptoms.

When these problems are finally addressed, it is often with a large Business Process Re-engineering program that attempts to automate processes in order to make them “more efficient” and to take out the “human factor.” Research shows that more than 70% of change programs fail to meet the expectations of management. We believe that this astonishing failure rate occurs because such programs are too frequently focused on automating the work of organizations beset by Organization-itis.

The Solution

The solution is to actually design the cross functional aspects of the organization to accomplish its goals using tools that show the underpinnings of the organization in the language of business management and operations, so no technical knowledge is required. With a designed organization and a set of tools for communicating and managing the design as it evolves, Organization-itis virtually disappears. Problems will still occur but they can be rapidly diagnosed and fixed. The designed organization is healthy and reliable. Once the relationships are complete and clear, most of the contention, silos and anxiety
in the organization simply resolve. Figure 1 shows how these relationships complete the design of an organization.

Figure 1

When we do a design, we examine the interrelationships among the activities of the organization.  Essentially, we overlay our mapping on the organization chart.

We ask these and several other questions:

• “Who is whose customer?”
• “What is asked for and delivered?”
• “What do they do when the deliverable is late or doesn’t work?”
   

This approach clearly identifies the operational relationships between the activities of the organization.  The questions permit each person to explore the dynamics of the exchange they have with others.

When these dynamics are documented and distributed, all affected people know and understand how their part of the organization operates in relation to the rest of what is going on.

With this knowledge in place, many of the causes of Organization-itis are removed and the health of the organization improves.

Clarity by Design has developed a cost-effective approach to designing, documenting and managing the cross functional interfaces. Our approach does not rely on massive investments in technology. Instead it focuses on the people and the bi-directional communication.

Whichever technique you choose, the key to ensuring reliability in any organization is to be disciplined and explicit in defining the communication between organizational groups. By making these relationships crystal clear and establishing agreement on the relationships, you can avoid the pitfalls of silos, contention and waste.  The organization will then be more reliable.

For over 30 years, Don Burnstine has worked with complex organizations large and small to solve Organization-itis. His unique approach to organization design has saved his clients tens of millions of dollars in costs and, more importantly, enhanced their abilities to innovate and grow. His methodologies create a solid foundation for change efforts.

info@claritybydesign.com

519-342-4015