Fact of the matter is that customers don’t really care what goes on inside an organisation. They raise a need and simply expect to receive a corresponding product in return. But this customer perspective is rarely what is foremost being discussed day-to-day inside the organisation. Although all the different operational areas have an overall common goal, they can often have differing and possibly even conflicting day-to-day aims.
People with experience in organisations may recognise discussions similar to the following. Design manager: “I need this new part from a new supplier”. Purchasing manager: “No, I won’t buy it because it conflicts with my goal of reducing the supplier-base and obtaining overall best pricing for everything else”. Production manager: “I can’t worry about what part you select, because my immediate focus is on improving our production schedule”. Delivery manager: “I don’t really care for what you all do, as long you design something that helps me cost-optimise the loading of my delivery vehicles”. All statements are valid and important, but they are not coherent or focused.
We can define an organisation as integrated or non-integrated, in terms of how its teams collaborate on transforming customer input requirements into a corresponding output – i.e. transforming needs into outcomes. In the non-integrated organisation, the activities are divided per the organisational structure. This results in narrower procedural thinking, handovers, duplication of efforts and in tasks being optimised in isolation of the wider purpose. This is referred to as a silo mentality. From the customers’ perspective, they will perceive an organisation that has an internal focus and thereby becomes static to the evolving requirements – because customer needs reside outside the organisation and they are forever changing.
Instead of thinking of the organisation as a structure of departments, we should learn to also think of it as the core process that flows across it. This enables us to better focus on the customer, at the start and end of the organisation’s overall purpose, and to be responsive to the forever changing needs. The organisation can be looked at as a value-chain that end-to-end interlinks the customer input (need) with the product output (outcome). Improvement is about continually and collaboratively enhancing what adds value, while reducing or eliminating what does not. This is particularly true when implementing multiple systems standards that overlap.
Organisational units within the core flow must share and align to an over-arching common goal, to enable focus on the customer at the start and end of the process, and to be responsive to the forever changing needs. The concept falls apart when any one unit emphasises its own goals above those of the whole – i.e. seeking to maximise its own performance or benefits in isolation of the wider objectives, even when this is perhaps done with well-meaning intentions towards the customer. The actions within any one sub-unit should not become a burden up- or down-stream to itself. This may mean, at times, making one’s own activity less efficient, or taking on or giving away responsibilities, where this benefits the greater purpose of improving the overall system outcomes.
Process workers may be grouped by their functions – e.g. the design team is grouped and led by an expert designer. However, the concept of team must be wider than simply this functional grouping. Team is also the chain of functions across the organisation, transforming the customer input requirements into a corresponding product. The designer is just as much team with purchasing, production and delivery colleagues, as he or she is with other designers. Any weakness or support need within the total chain is everyone’s problem.
Grouping the teams by their functional structure is good for optimising the pooled competencies and skills scheduling and efficiency.
Grouping, or integrating, the teams per the core flow across the organisation is the good for optimising customer-focus and processes interlinking.
The integrated flow-centred team grouping can feel more abstract, compared to the physical organisational team-structures, and is therefore more easily overlooked. However, it is what makes the organisation responsive to customers and organisational requirements. Care must be taken that the structural/functional team does not over-rule or de-emphasise the integrated flow-centred team.
In practice, we need to apply both team concepts. Every person within the organisation belongs to both a functional structure and to a process structure. For example, if we teamed up per the process flow alone, and ignored the functional structure, then we may lose the critical mass for like-minded competencies getting together to do sufficiently evolved thinking and creating the next new thing.
By nature of the short horizon-span in customer aspirations (they mostly prefer what they already know), systematic pure customer responsiveness will mostly lead to stagnation or smaller incremental improvement only. Innovation happens when people temporarily looking outside the day-to-day demands and start thinking up new ways of fulfilling yet unrealised customer needs that are not yet being demanded. If we did solely what the customer asks for then there may be an optimised process flow, but there would be little structural re-design and innovation. The optimised flow may meet current customer requirements, but it would never, in the longer term, exceed expectations or excite customers. Some specification can only be found or created outside the core process flow. There are therefore periods, ranging from minutes to days, where we must step out of the process flow, to take time to think beyond the immediate customer expectations.
The following example is, in my opinion, an area where the functional vs process approach has unintentionally (and possibly unavoidably) become unbalanced. Society’s rising health expectations, coinciding with economic austerity and healthcare skills shortages, has over the last decade have given rise to a trend in which health services across the world have felt forced to divide up specialist departments per their workflows. In some hospitals, the treatment of patients with respiratory difficulties has been divided into three flows, according to severity. Mild cases are no longer admitted to the specialist department, but are instead treated in a general care unit. The most severe cases of respiratory distress are transferred away to a fewer number of highly skilled regional centres of excellence. The remaining original specialist department continues to receive about the middle third of patients. The fragmentation of the specialist area into three smaller thirds has appeared to be obviously necessary. However, it now makes it more difficult to efficiently schedule the individual smaller workflows, such as flexibly covering night shifts, holidays and unplanned staff absenteeism with a smaller sub-group of people. It is further suggested that it has become more difficult to develop and maintain skills, because of the loss of insight and cross-fertilised thinking within the wider peer group. It has become more difficult to evaluate how a patient progressed from being a mild case to becoming severe. The best skilled staff, exposed to nothing but the most distressing cases, become prone to higher sickness rates and burn-out. Hence, the improvement from establishing a customer-centric workflow has in this case become negated by reduced resources effectiveness. It has not resolved the root issues.