Power Management: Simplifying the Organization

by Daniel Lock

Organizational complexity and bureaucracy are a threat that managers must continually be wary of…

The term change fatigue is a real and common problem that organizations face and must deal with when considering a change or transformation initiative, or even a simple process improvement initiative. But at its source is the manager. The late Peter Drucker once said, “Much of what we call management consists of making it difficult for people to work.”

W. Edwards Demming, another management guru, believed that most organizational problems were a management problem. That is to say, and management actually was making it harder for people to do their work properly and well. Demming pioneered the concept of systems thinking and process improvement, which has culminated in “lean” which most factories floors have embraced. The same concepts of streamlining the factory can and have been applied to offices too – but there is a long way to go.

In an effort to understand the impact of complexity and bureaucracy, Boston Consulting Group created an “index of complicatedness,” based on surveys of more than 100 U.S. and European listed companies.

They say, “The survey results show that over the past 15 years, the number of procedures, vertical layers, interface structures, coordination bodies, and decision approvals needed in each of those firms had increased by anywhere from 50% to 350%. According to our analysis over a longer time horizon, complicatedness increased by 6.7% a year, on average, over the past five decades.”

This is a huge drag on productivity. In the 20% of organizations that are the most complicated, managers spend 40% of their time writing reports and 30% to 60% of it coordinating meetings.

How to manage an organization we don’t understand

A goal orientated system (or process) must have a rate limiting step preventing it from achieving its goal. This is the constraint. You don’t need to fix everything – only this one process. Focus here.

For example, the average manager spends 15% of their time in meetings, and senior executives 22%. Personally, this seems low. But the goal of management is to enable people to work effectively, and then the constraint on management becomes their time. Time spent in meetings is a useful place to focus in order to free up time and productivity and reduce complexity.

Once the constraint is defined, you need to subordinate the rest of the process to this. What this means in a manufacturing sense, is the if the bottleneck is mid-stream, don’t run the upstream steps at 1005 because there will be a build of inventory at the bottleneck and the system as a whole won’t get to it anyway.

The value of a project manager

The middle and project managers are vastly underestimated. Consider this study by Wharton University researcher Ethan Mollick. He wondered, just how much value project managers created?

The results were surprising:

“After controlling for many factors, such as the genre of the game and the size of the project, I found that individual producers account for 22.3% of the variation in company revenue. Designers, by contrast, account for just 7.4% of the variation — a relatively marginal impact. For comparison, everything else that’s part of the firm, whether it’s senior managers or strategy or marketing, accounts for just 21.3% of the variation in firm performance.”

Inventory costs money. In an office and creative environment inventory is the backlog of work in progress. Taking a process orientated approach, this means standardizing input’s wherever possible. In engineering operations such as maintenance and overhaul of aircraft they call it “full kitting”.

This same full-kitting concept can be taken to support managers. For example, the simple use templates for meetings, for minutes, for when to have a meeting, when to not have a meeting can save a bundle of lost time. Eddy Groves, the CEO of Intel famously implemented meeting rules for the organization which included, having a clear purpose, five reasons for having a meeting. If any of these weren’t fulfilled, then why have the meeting?

Waste not, want not

If an organization is becoming bloated and complex, you’ll need to tackle the management. Managers implement the value system by rewarding and punishing the types of behaviors they wish to see and reinforce. Managers should therefore understand and have to explain the complexity load their imposing on the organization.

Boeing and the Seagate Technology, a data-storage company, both do this by measuring and therefore limiting the number of meetings, emails, and projects in progress. Approaches such as this will do a lot to remove complexity and therefore the change fatigue people feel, and therefore they’re more able to focus on the changes that really matter.

Consider these tips for power management in your organization:

  • Sequential versus parallel processing: Consider the former when quality is important. The latter when speed is important.
  • Bottleneck management: the process as a whole can’t go quicker than the slowest step. Focus your attention here for quick results.
  • Speed up decision making: this avoids working on unnecessary tasks.
  • Standardize options: Depending on the amount of customization you offer, consider standardizing options and having dedicated processes to handle them.

Want to Learn More About Change Management?

I’ve created a free eBook on Fundamentals of Change Management. In this ebook, you’ll learn the fundamentals of change management, why it’s critical to achieve business outcomes, as well as tools and techniques to make change work for you. Click Here to Download

image credit: bigstockphoto.com

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Daniel LockDaniel Lock helps organisations unlock value and productivity through process improvement, project & change management. Find out more about him at daniellock.com.

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