SOURCE: Kay Sever | June 4, 2023
In January, 2023 I introduced the term “organizational dynamics” as a key factor in optimization success. Dynamics is defined as the science of the motion of bodies and the action of forces in producing or changing their motion. If we apply this definition to business, “bodies” are individuals or groups in a company and dynamics refers to how these individuals or groups act, react and interact in the workplace. This article explores a new invisible dynamic… interdepartmental touchpoints.
Organization Charts – An Overview
Organization charts are a picture of the structure of an organization. Organization charts are used to determine levels of management and assign responsibilities to everyone in management. These charts:
- 1) Display a box for each set of processes/work activities in every group/department/function in a company or organization. Each box has a supervisor/superintendent/manager/executive that oversees the activities in that box.
- 2) Show rows of boxes of related processes/activities connected with lines to a single box above them. This box has responsibility over all the boxes linked to it on the level below.
- 3) Define the vertical reporting structure/levels from one horizontal layer to the next… from the boxes at the bottom that represent steps in a production workflow to the executives at the top that are ultimately responsible for results in all the boxes reporting to them.
- 4)Are used to develop:
- A “chain of command” information flow for each level of management.
- A “delegation of authority” decision guideline for each level of management.
- A roll-up/summarization structure for reporting operating statistics and financial data for a site/operation, division and corporate.
So far, there is nothing that I have mentioned that is problematic about the organization chart structure or its traditional application with the management system. However, there is one thing that is overlooked by almost everyone in management because of the link between organization charts and the way management responsibilities for a box (department) are defined.
Organization Charts – The Invisible Weakness
If you are a person with management responsibilities, you “own” a box on your company’s organization chart. You were given a set of management responsibilities/guidelines (your job description) to help you oversee the processes/activities that occur in your box. Why is this important to think about?
The performance of each person in management will be judged based on how good they are at “managing their box”. What if your job is easy most of the time because all of your people are excellent… they are focused on quality, they hold themselves accountable for doing good work, they let you know if one of the processes in your box could be improved, and they notify you immediately if a problem arises? Your people are enthusiastic about working in your department and your boss tells you often that you and your people are doing a good job. You and your people often receive bonuses as part of your incentive plan for meeting your goals.
What happens if another department gives your department poor quality inputs or incorrect information that causes rejects, rework or mistakes to be made in your department? All of a sudden you can’t meet your goals and your department’s performance drops. You have no authority to “fix” the problem yourself, but you can ask the manager of the department sending the poor quality inputs or incorrect information to fix the problem. If the problem is not impacting the performance of the problem-generating department, their bonuses will not be reduced for this problem. As a result, the other manager may ignore your problem.
Your next option is to go to your boss and ask for help. If your boss oversees the problem-generating department, the problem will likely be fixed. However, if the problem-generating department reports to a different manager/executive, more than one higher level manager must be involved for the fix to occur. What happens next has to do with management choices that extend beyond the boundaries of traditional job descriptions AND the structure of the organization chart.
Interdepartmental Touchpoints – A Void in Management Oversight
Saleable products are made as inputs and information pass from one department to the next along a value stream workflow. Traditional management job descriptions focus inwards on a “box” on the organization chart, which means NO ONE is responsible for the touchpoint between departments.
Processes with interdepartmental touchpoints (i.e., what is required by the receiving department to do excellent work) are ASSUMED to be co-owned by managers – in real life, there is often no joint accountability on the organization chart, in the incentive system or in execution of management activities that make touchpoints a priority. As a result, weak touchpoints become areas of contention between departments and may go unresolved for years, even in the midst of a Process Improvement or Optimization Initiative.
Interdepartmental Touchpoints and Optimization
Value stream process touchpoints are a source of financial loss that is seldom quantified or reported. As a result, companies can lose millions of dollars and not know it. If there is nothing in place to reinforce the co-management of these touchpoints, significant losses can continue for years without abatement.
Management is in charge of these touchpoints, not the equipment and not the workforce. If a management team is pursuing “best possible” performance for production equipment but does not hold themselves accountable for choices that can deliver “best possible” performance for the organization, they have unintentionally forfeited the opportunity to reach their best performance goals. When this happens, optimization cannot be achieved.
Next month: Join me when we will talk more about interdepartmental touchpoints and the power of management choices.
Thought for the year: There is an astounding lack of management awareness about the power of moments… moments when opportunities to capture millions of dollars hang in the balance… moments when courage is the defining factor in preventing or stopping losses and shaping a corporate culture capable of sustaining optimization over the long term. Executives and management teams that have this awareness are empowered to help their people achieve optimization and accomplish great things!
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 spent 3 years analyzing the impact of management systems on optimization success. As a result of that study, she developed a LIVESTREAM management training system for Optimization Management called MiningOpportunity – NO TRAVEL REQUIRED. See MiningOpportunity.com for her contact information and training information. Email Kay directly at [email protected].
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Kay has worked side by side with corporate and production sites in a management/leadership/consulting role for 35+ years. She helps management teams improve performance, profit, culture and change, but does it in a way that connects people and the corporate culture to their hidden potential. Kay helps companies move “beyond improvement” to a state of “sustained optimization”. With her guidance and the MiningOpportunity system, management teams can measure the losses caused by weaknesses in their current culture, shift to a Loss Reduction Culture to reduce the losses, and “manage” the gains from the new culture as a second income stream.
