Breaking Old Habits
Organizing for success with Lean is a interesting proposition. The fact is, most organizational designs are poorly thought out and disappointedly implemented. Lean practices and tools lead us down the path of organization through process design vs. reorganization. Our focus tends to be affecting change through existing processes and refining those to the most efficient point possible. When your Lean tools lead you down a path, we tend to follow faithfully. It cannot be debated that organizational design matters. The question remains … can we organize with Lean practices?
Change Comes Through Organizing
Unfortunately, most organizational redesigns are not defined or outlined by a problem statement. Organizations jump into these endeavors because they can ‘claim’ they are making a change, but in reality, it is being done for the sake of being done. When starting an reorganizational change, be very clear on the purpose and value of making that change. Ensure that everyone in the organization clearly understands the need and purpose for the reorganization. Clarity is the key to success. This leads us to the next challenge, which is considering the people factor. Much discussion can center around whether an organization should focus first on the good of the business or the good of the people. Making a case in every situation will remain fluid, but generally, the organization should be the priority in large organizations, and small organizations should clearly keep their people first and foremost.
Reorganization With Confidence
Be willing to take risks and be creative when exploring the process or reorganization. Some believe that when experimenting with organization, that process becomes disruptive to the organization. The fact is, experimentation can be disruptive, but only for the short term. Determine how to measure the success, define design options and then perform your experiments, as there is no single right answer. Lean practice and tools are perfect for navigating the challenges of organizational change.
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A lot of companies think reorganization is a solution, but often it never addresses the root cause of the problem. Many different organization structures will work, but the real importance is knowing who drives the priorities in the company. It should be the value stream manager, the one who sees across the value stream for each product/service. They should know what the customer needs, and where the improvements needs to be made.
Too often, the functional managers (Quality Manager, Industrial Engineering Manage, Procurement Manager, etc) set the priorities for their direct reports. They are also co-located near their direct manager, not with their product/service team, which is another reason why their priorities are misaligned.
From a lean perspective, aligning the work priorities with the value stream is the best organizational structure. Ideally that’s a direct line reporting structure, but a dotted line structure can work as well, as long as everyone is on the same page.