Paul Harding SAQI MD
I remember when our first Japanese CEO came to our plant in South Africa. He immediately gave up his fancy office and converted it to a training / meeting room. He then took up a desk alongside the production managers in an open plan office. This was not just a token move, it was a clear message that he needed to communicate directly with his managers and understand what was happening in the sharp end of the organization. This of course is not unusual in Japanese style management.
Historically each manager had their own separate office and each director sat in a plush suite in the main administration building. All the executives and managers were focused on their lines of responsibility in their particular functions in order to meet their targets and Key Performance Indicators. This was typical of an organization that works in silos and does not fully communicate. The role of the CEO was to sit at the top of the hierarchy and give commands.
Below you will see an illustration of a model that depicts a typical manufacturing organization. Each department or function is illustrated by a small triangle. Does it look familiar? Probably each of these functions had a manager who sat in his office and focused only on what objectives he had been told to achieve.
If we look at the figure above we see the triangles that indicate various functions within an organization.
Count the number of triangles that you can see in the figure.
Look carefully before you come to your conclusion. Each of these functions has a role to play in the success of the operation. No doubt each of these areas has a list of policies, procedures or work instructions supported by job descriptions relating to what must be done in each department.
The figure shown is manufacturing based but it could also apply to any service organization as well with a couple of minor modifications. So what we are looking at is a process based organization that may be working in silos with little team work or communication across functions.
How many triangles did you count?
One of the simpler definitions of systems thinking is that “The whole is greater than the sum of its individual parts”. So how can we achieve this in our illustration?
Let’s start with the 4 triangles at the top of the model. We have a CEO, Business planning function, Finance and Logistics. Now of course if we want to implement a strategic plan for the organization we need input from each of these 4 functions. So we have now created a larger triangle that incorporates all these functions. However, we haven’t produced anything yet. So let’s look at the logistics function as the top of another 4 triangles and incorporate Production, Quality and Research and Development. Do we need further input in order to achieve success? Well how about including Training, Customer service, Information technology, Sales and an Audit function. Now add all of these nine functions together and you now have a bigger triangle.
Get the picture?
Now go back and count the triangles all over again and see how many you can find this time? Of course this is a lot of theory about systems thinking but does it really work?
Well what our Japanese CEO did was to form Cross Functional Teams (CFTs) that needed to cooperate in order to meet the organization’s objectives. So although each of the divisional managers had their functional KPI’s they were also allocated CFT KPI’s too. So the Production manager had a CFT KPI for achieving Quality targets as well as his allocated volume targets.
So we have 16 small triangles in the model. There is also a large triangle surrounding the model that can be depicted as the organization itself. These 17 triangles can be indicated as the sum of the individual parts. However, the organization can be much stronger if the whole is greater than the sum of the individual parts. So now add all the triangles in the model.
Who counted 27 triangles? Well done. Now apply it to your organization