A group of sailors were out in an old boat. The boat hit a rock and sprung a slow leak. The group began to fight over whose fault it was that they hit the rock. Then they argued over whose responsibility it was to fix the hole. Those on the starboard side shouted that those on the port side, where the hole was, should be responsible for fixing it. All the while, the boat filled with water and floundered in the increasing heavy seas. As the shouting and finger pointing grew, a large wave swamped the boat. Everyone drowned at sea.
Traditional functional or vertically managed organizations force the people to act like those foolish sailors. Individual departments, branch or field offices work to optimize their own performance. Goals, objectives, performance measurements, and career paths move up and down within the narrow walls of these functional chimneys. Managers and their teams focus on doing their own jobs or segment of the production, delivery, or support process. The big picture gets lost because everyone focuses on a narrow piece of the organization.
Functionally managed organizations reduce organization performance levels while increasing cycle times and costs by:
- Fostering an “us-versus-them” approach to communications and fighting for organizational resources
- Leaving unmanaged gaps between departments which disrupt cross-functional work processes
- Making improvements or changes in one department which hurts the effectiveness of other departments in the process
- Losing sight of customer/partner relationships and meeting everyone’s needs. With a narrow focus on their own departments or functions, people in a vertically managed organization easily forget that they’re all in the same boat.
While organizations have been organized vertically, their operations depend on processes that flow horizontally. In the fifties, sixties, and seventies, that didn’t matter. Expensive layers of inspectors, coordinators, expeditors, supervisors, and managers plugged and patched the leaks to keep their organizations afloat.
In the 1980’s and 1990’s, manufacturers were forced by their superior quality Japanese competitors to dramatically improve their production processes — or sink. Many manufacturers made huge gains in quality, productivity, cycle times, and cost reduction by rediscovering process improvement techniques.
By the mid-1990’s, managers realized that the information technology revolution wasn’t the answer to their prayers they were looking for. Automating processes that were already in place didn’t solve the core process problems. Once managers realized this, horizontal processes began to improve.
For more information on process management, contact us.