SOURCE: Kay Sever | June 30, 2021
Last month you read about including the organization in efforts to achieve what I call “full optimization” across a site or a company. As part of this work, leadership teams must understand where organizational weaknesses occur and the barriers that separate them from “best possible” performance… not just with equipment but in the organization as well.
FACT: The structure of organizations was never designed to achieve optimization. Why is that important? Because management teams are working with tools day after day that will not help them be the best… in fact, some of the tools they use to manage with help create weaknesses in organizations and barriers when “best possible” is the goal.
One of the sources of organizational weaknesses is the organization chart. The organization chart is a management tool used for decades to 1) structure/control the flow of information (communication and reporting), 2) delegate management authority, responsibility, and decision making, 3) group the workforce by function/workflow into departments and 4) assign departments to management team members. The organization chart defines “vertical channels” for communication, reporting and decision-making within the company. Defining these vertical channels creates an orderly structure that people at all levels can plug into and understand.
However, organization charts can create invisible barriers that prevent certain activities from occurring. For example, these barriers make it hard for the leadership team or the workforce to see or understand the “big picture” view of processes, workflows and interdepartmental touchpoints that can create or destroy value. Anything that inhibits “big picture” thinking and decision-making will cost you money… lost production, higher costs, rework, or investing in equipment that will not deliver the best result for the value stream.
Organization charts make it harder to see the “big picture” and tend to encourage departmentalized thinking in many areas… communications, reporting, management authority, budget goals, problem solving, etc. This mindset is one of the single greatest enemies that management has if optimization is the goal! Strategies designed to overcome departmentalized thinking may be the most valuable tool is management’s optimization tool box. Why do I say this? Because escaping a departmentalized mindset is a critical step in achieving a sustainable optimization program over the long term.
You may have heard my analogy for optimization and auto racing before… race cars can only achieve top speed when there are no hazards on the racetrack. Using that same kind of thinking, companies can only achieve their “best possible” performance (i.e., optimization) when the management team has overcome or removed the barriers that are holding them back.
Am I saying that companies need to throw out their organization charts when optimization is the goal? Absolutely not! But I am saying that management teams need to be aware of invisible barriers within the management system that make optimization hard to achieve. If they know about these barriers, they can develop a strategy to overcome them. Just as optimization may require new equipment and systems, it may also require a few new management strategies that help people overcome organizational barriers that keep them divided and prevent “big picture” thinking from taking hold.
An optimization truth…
If leadership teams are not aware of their organization’s role in optimization AND are not familiar with organizational weaknesses and barriers to optimization within every company, they will forever be handicapped and not know it. If the organization is not part of the scope for optimization, achieving optimization or “best possible” performance will remain out of reach. The numbers will show gains from new equipment and systems procured for the optimization effort, but management will not know that those gains could have been higher! Invisible losses caused by organizational weaknesses will partially offset the gains… organizational weaknesses that could have been fixed for free!
Thought for the month: Seeing the “big picture” and using that vision to change what needs to be changed to optimize performance is a real key to success with optimization.
Kay Sever is an Expert on Achieving “Best Possible” Results. Kay helps executive and management teams tap their hidden profit potential and reach their optimization goals. Kay has developed a LIVESTREAM management training system for Optimization Management called MiningOpportunity – NO TRAVEL REQUIRED. See MiningOpportunity.com for her contact information and training information.
To comment on this story or for additional details click on related button above.