Realigning the Organization

Organization or reorganization schemes have been proposed ad nauseam as solutions to many business problems. As a general rule, organizational changes, especially those that simply reshuffle the same names into different boxes on the organization chart, don’t improve anything. This does not mean suggesting some new organization approach that is better suited for these turbulent times. However, many organizations are too top-heavy, over-structured, and over-satisfied to be responsive to market needs and too costly to be competitive. The structure and staffing of any organization must be rigorously challenged to ensure it is really geared to accomplish the fundamental objectives of the business in as cost-effective a manner as possible. An honest evaluation of the answers to the following critical questions will provide a good function for action.

a)        Is the organization structured to serve markets or simply to manage functions and sell products? Have priority markets been identified? Does someone have primary responsibility for ensuring that the product/service package is tailored to each target market? Do mechanisms exist to ensure cross-markets? Is there any kind of a market focus in the selling organization?

b)        Are there enough discrete profit centers? Do enough managers feel the burden of full profit responsibility? Is the business unit larger than its most successful smaller competitors? Are there any big cost centers that are not assigned or allocated to someone who has a profit and loss responsibility?

c)        Are there corporate group or division staff redundancies? Do the same titles exist at different levels (e.g., corporate controller, group controller, division controller, plant controller)? If so, does it make sense? Can staff position or groups show how they actively contribute to profit results? If so, do line managers agree that these functions are worth the cost?

d)        Are there too many layers? Are there more than five layers between the business unit manager and first level workers? Are there managers with assignments limited to managing one, two, three or four people? Why? Can any of these activities be combined under one manager? Why not?

e)        Is the ratio of supporters to actual results producers satisfactory? How many people actually make a direct contribution to results (e.g., first-line sales personnel, direct hourly workers, sales order engineering and order entry workers, handlers of incoming materials, and storing and shipping personnel)? How many managers, staff, and support personnel are cheering them on? If there is more than one support person for every two producers, what do they do? How do they contribute to profits?

The questions are not new, but the answers are more important now than ever. Traditional or experience-based answers are probably wrong because conditions have changed so dramatically. Moreover, it is doubtful whether existing management can or will ever come up with the right answers, because they have vested interests and the changes needed are simply too tough for them to swallow. These organization structure questions are not as serious for many small to medium-size companies since they are not as likely to be troubled with highly structured, functionally focused organizations lacking a dedicated market orientation. However, even managers in these companies must constantly fight the natural tendency to become more structured, bureaucratic, and lethargic.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit, Line of Sight

Barriers to Team Progress

  • Insufficient training. Teams cannot be expected to perform unless they are trained in problem-solving techniques, group dynamics, and communication skills.
  • Incompatible rewards and compensation. In general, organizations make little effort to reward team performance. Because of a strong focus on individual rewards it is difficult for individuals to buy into the team concept. Similarly, performance appraisals do not accept input from peers or team members.
  • First-line supervisor resistance. Supervisors are reluctant to give up power, confident that they can do the work better and faster, are concerned about job security, and are ultimately held responsible.
  • Lack of planning. A lack of common direction or alignment on the use of collaborative efforts, internal competition, redundancy, and fragmented work processes all prevent team progress.
  • Lack of management support. Management must provide the resources and “buy into” the quality council/sponsor system.
  • Access to information systems. Teams need access to organizational information such as business performance, competitive performance, financial data, and so forth.
  • Lack of union support. Organizations need union support for the team to be successful.
  • Project scope too large. The team and organization are not clear on what is reasonable, or management is abdicating its responsibility to guide the team.
  • Project objectives are not significant. Management has not defined what role the team will play in the organization.
  • No clear measures of success. The team is not clear about its charter and goals.
  • No time to do improvement work. Values and beliefs of the organization are not compatible with the team’s work. Individual departmental politics interfere with the team’s progress. Management has not given the team proper resources.
  • Team is too large. The organization lacks methods for involving people in ways other than team membership.
  • Trapped in groupthink. Team members all have a mind-set that no actions are taken until everyone agrees with every decision.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit, Line of Sight