Coordinating work across structure
Uncover how coordination across teams and organisational levels connects the work that creates value, keeps day-to-day activity aligned with strategy and helps the operating model work as a whole.
Summary ideas
Connect across boundaries
Coordinating mechanisms provide the glue that enables work products and information to flow across structural boundaries.
Keep work flowing
Horizontal glue connects work units, moving value-creating work and information along the value stream.
Align strategy with daily activity
Vertical glue connects long-term strategy and immediate priorities, guiding behaviour from senior leadership to frontline workers.
The completion of a structural design, which is the formal grouping of core work into useful units, is often where traditional consulting ends. Yet, it is where the true operational life of a modern enterprise begins. Every structural choice groups together some work while separating it from related work activity. Without the next component of design, these separations, or boundaries, tend to become silos characterised by increasingly independent behaviour. Successful companies learn to coordinate and integrate effectively across units and teams.
Coordinating mechanisms
Coordinating mechanisms, as introduced in the prior chapter, are the glue that stick discrete organisational units into an interdependent whole. All work units (or teams) are defined by a boundary that differentiates the work and focus of a unit from other work units. Work products and information must flow across unit boundaries in order that each unit can make its value-adding contribution. Each mechanism that will span these boundaries – how it will work, who is involved, etc, requires design thinking.
There are two dimensions of interest:
- Horizontal – These mechanisms ensure work products and information are reliably passed between work units and that they flow along the value stream.
- Vertical – These mechanisms keep the entire organisation, from top senior leadership and enterprise strategy to frontline workers and the day’s activity, directed towards the same objectives.
Horizontal coordination
Moving work along the value stream
The central concern of horizontal coordination is moving value-creating work products and information along the value stream. Each unit within your organisation necessarily has input requirements, work processes and outputs. A primary concern of any work unit is ensuring it receives the inputs needed to perform effectively. Teams must understand what inputs are required, where they come from, the quality standards they must meet, when they will be received, and how they will be delivered. A secondary concern, also very important, is the similar set of questions that identify how it must pass its work product along to its customer, internal or external.
The answers to these questions are the horizontal glue that integrates work units.
As previously mentioned, work fragmentation is a threat to efficient and effective work process. The more fragmentation in your organisation, the more boundaries work and information must cross. Each boundary crossing is an opportunity for error in the end-to-end system. Let’s simplify an example and claim each boundary crossing is 98 percent reliable. If a work product must flow across one boundary, the expected error rate is 2 percent. If a work product must flow across three boundaries, the expected error rate grows to about 6 percent. This will come as no surprise.
Horizontal mechanisms that facilitate effective handoffs include the following general items, ordered in development order from simple to complex.
The suitability of any mechanisms for a specific integration requirement is a design conversation between a receiving unit and the supplier of its input needs.
Vertical coordination
Keeping the organisation aligned to strategy
Vertical mechanisms keep the entire organisation, from senior leadership to the frontline, directed towards the same strategic objectives. There are few organisations with no improvement opportunities found in process to align top to bottom. Like horizontal glue, vertical glue helps determine how effectively the organisation can compete. Vertical interests include:
A characteristic of vertical glue is that it can be understood as an integrated process that generally works top to bottom. The starting point of this vertical process is often the strategy development step with its sub-processes such as environmental scanning. To connect this lofty level of strategy development to core work in the value steam, additional steps are required to interpret strategy at successively more granular levels in your organisation. These levels could be geography, divisions, departments, sections, teams, etc.
Vertical interests
1. How will the strategy formation process work?
2. What is the mechanism to translate strategic intent to operational planning? (eg, Hoshin Karni strategy deployment planning is an example)
3. How will strategic targets become embedded into value stream objectives and metrics?
4. How will performance management reward systems focus front-line workers on the right activities? How will they align workers’ objectives with those of senior leaders and the organisation as a whole?
management activity
- Managing shifts and handovers
- Production planning
- Volume forecasting
- Resource planning
- Deploying strategy through operational units into the value stream
The Management Operating System
The Management Operating System (MOS) is management activity and systems needed to keep the complete value stream aligned to strategy and operating as intended. It is different from horizontal glue mechanisms which move core work products and related information across work unit boundaries. The MOS is concerned with various types of management activity that are necessary but do not directly add value to a product or service.
It is important to note that while such activities may be part of a management operating system, it is not necessary to place them into a management job. They can integrate into line worker jobs. This will be the case if design intention is to push managerial decision-making and responsiveness towards the value-creating work. It remains management work regardless of what job title performs it. It is not necessary that a traditional management job that sits above core value-creating work activity performs all management activity.
Primary concepts
1. Value-creating work – Directly adds value to a product or service for the customer.
2. Management activity – Enables value-creating work and shapes culture and customer value indirectly.
3. Value stream – Sequences the work needed to design, produce and deliver a product or service.
4. Structure – Organises value-stream activity into focused work units.
5. Boundaries – Separate work units and must be crossed by work and information.
6. Horizontal glue – Moves work products and information effectively across boundaries.
7. Vertical glue – Keeps the value stream aligned with strategy.
8. Management operating system (MOS) – Keeps the value stream running and on target.
Structure, glue and MOS
This chapter covers a fair number of related details. When we look at specific items in a system, it is easy to lose the big picture. The primary concern of an operating model is the execution of core, value-creating work required to produce and deliver something of value to a customer. Work systems of any size must be organised into units that separate work. Horizontal glue mechanisms reintegrate these work units into a complete, unfragmented value stream. Management work, summarised in a label called the management operating system, overlays the value-creating system with necessary but not value-adding activity.
CASE EXAMPLE
Turning strategic priorities into coordinated action
Aligning with strategic prioritisation had always been a problem. With a future value stream agreed for the design process, it was clear a mechanism was needed to translate strategic intent into channel priorities which must be reduced and sequenced for maximum whole-company benefit while fitting into the capacity of the organisation. A decision mechanism was needed wherein priorities would be agreed by multiple stakeholders and turned into aligned activity. How would this work?
An agreed outcome was based on a common view of the value stream and shared understanding of capacity limits. A design process convened key operational leaders from various teams in the future operating model design. Together, they designed a series of process steps aligned to a calendar timeline, agreed interfaces and input requirements, and defined in-process metrics and a process scorecard. During the design process, they also agreed that the initial design was provisional, and it was subject to edits based on forward learning. The process was simple, agreed by all stakeholders and built on a common understanding of the end-to-end value stream. The result was a transparent planning process created to optimise the whole of the business.
SOURCES
- Galbraith, J. (1994). Competing with Flexible Lateral Organizations, Adison-Sweley Publishing Company.
- Kaplan, R. S., & Norton, D. P. (2008). The Execution Premium: Linking Strategy to Operations for Competitive Advantage. Harvard Business Press.
- Mintzberg, H. (1979). The Structuring of Organizations. In Readings in strategic management (pp. 322-352). London: Macmillan Education UK.