Avoiding the mistakes from the past

Too often change and improvement can get locked in to cycles of change which feel
like progress is being made at each stage but they are often just repeating both the successes and mistakes of the past.  The most obvious one is changing between the functional and the process based organisation.

Let me illustrate the point.  A new CEO comes in to an organisation structured around functions and sees that it is slow to respond to customers.  They also notice that innovation is slow and uninspiring.  They switch to a process based organisation  to shorten lead-times and to create responsiveness and ownership.

Their successor comes in and finds an organisation which has a high cost base and sees duplication of resources with a lack of professional standards.  They switch back to a
functional organisation.

Cycles of switching between process-based organisations and functional
organisations follow.  Whilst a radical switch in organisation style may deliver real improvement in performance, it can also breed cynicism if the employees feel that it is only being done to demonstrate control.

We know that both organisation types have their strengths and both have their weaknesses.  For any organisation at a point in time, there is the right balance to be found between the two forms.

As an example, a process based organisation may lead to a slip in professional standards.  A switch to a functional organisation would be an extreme solution to this.  A more insightful solution would be to improve training or to lay down a standard process and policies or to improve mentoring.  Similarly dividing up a scarce resource in to a process based organisation to improve responsiveness can be expensive and it can lead to big gaps in the service provision.  Sticking with a functional structure but finding processes for managing the priorities is usually a better solution.

As organisation leaders, we may rightly start an improvement process with a transformational change but we must watch what happens and from that learn how to make constructive adjustments to further enhance performance.

Leave a Reply

Your email address will not be published.