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Organizational Design Solves Lean Challenges

Organizational design can be used to solve problems or enhance lean methods. I wrote on the relationship that HR can play with lean, and fitting in with organizational design, in Organizational Design and Role of HR in Lean. Certainly mental models are challenged within a lean journey and the organizational structure must change around these changes. Sometimes it is changes in the structure, and sometimes it is just changes within the roles.

Problem 1: Rapid problem solving and help chains

In a lean organization, the ability and desire to spot problems quickly is heightened. Employees on the front-line whether in a call-center or in back-office processing must engage help quickly to resolve these problems before the flow of work stops or the problem grows.

However, often front-line supervision is not a suitable escalation path. First, they often aren’t as deep into the technical capabilities or procedural aspects of the work itself. Of course, we can solve that by changing the scope and skill level of the supervisors, but that’s not always an easy solution. Second, supervisors are often spread very thin, depending on the supervisor to team member ratio. With these aspects in mind, there are generally two potential organizational solutions that work to enable rapid problem escalation and solving.

1. Change the supervisor to team member ratio and supervisor skill. The supervisor ratio must be designed around problem response capacity, often ending up in a ratio between 4:1 and 12:1, depending on the type and frequency of problems. This also means that supervisors must be as or more skilled at the tasks at hand than team members and this requires a learning curve and focused development plan. Companies using front-line supervision as a entry-level post for other professional roles would have to change their strategies, as most of these supervisory hires would come from team members. Problem solving skills and coaching will be highly desired skills under this strategy.
2. Add a team leader. This team leader does not come between the supervisor and team member. It does not add a layer to the organization chart. It is simply a role in the team that is a first responder to problems. They are multi-skilled and a good coach. Problems escalate through the team leader. They know where in the organization to go for more help if it is needed. Team leaders need to be respected by their fellow team members and to be successful, must enjoy the role for it’s own benefit rather than it being higher paying or a stepping stone position. This solution almost always is the best choice when team member roles are highly technical or have long learning curves.

Problem 2: Improving Flow

Much lean improvement work will focus on improving flow. This results in better speed, flexibility, and connectivity to the customer. However, traditional functional departments create natural barriers to work flow through handoffs, queue, and disjointed communication.

Functional departments are meant to establish depth within a skill set and to manage and optimize workload across a pool of resources. However, the price paid is a separation of work and slowing of flow.

To improve flow in certain processes, establish “work cells” that combine multiple functions into one team helps cut through the handoffs and delays. For example, for a graphic arts company, one cell (involving combining desks with face-to-face seating arrangements) might involve customer service, advanced artwork, materials purchasing, and art production preparation. One order can be processed straight through the various stages of work without queueing or disruption in handoffs.

As with any solution, there can be a price, as you have a harder time managing depth of expertise within one pool and depending on the balance of work within each functional department, can lose resource optimization.

Problem 3: Connection to the Customer

Many new business services, even within a large business, start with the core knowledge resources interacting directly with the customer. This is done both because process and routines are not well-enough established to turn them over to retail fronts or call centers. Secondly, core knowledge resources generate tremendous learning in a new service launch by engaging directly with customers. Third, the business is just not large enough or predictable enough to establish a customer-facing organization.

Once scale and stability is reached, customer engagement is turned over to another organization. However, customer understanding and learning is lost from those developing and improving the products and services.

There are several solutions to this, only some of which require organization changes.

1. Because of technology improvements through wikis and other search tools, many lower-order questions can be handled without direct resource allocation. Then, complaints, concerns, and needs not addressed simply can still be routed back to the product and service owners for answers. Because the volume is lower, this can be an activity that the product and service owners can retake ownership for, improving connectivity and learning with the customer.
2. Some organizations have established rotating involvement in call centers and other customer engagement organizations. This might be once a year or once a month, but it is regular, planned, and purposeful. It must be built into resource plans in both ends of the organization. It is important that this strategy be deployed with an engagement and learning objective and not just a cost reduction effort during seasonal or peak demand periods.
3. Resident expert programs take resources out of product and service ownership groups and insert them in the field to be able to answer questions and solve problems based on the embedded knowledge and experience. Resident expert structures can last weeks or even years depending on the cycle of new product, program, or service releases.

Problem 4: Different Cycles of Work

When an organization is used to working in minutes, responding to fires, and generally reactive in many ways, it is very hard to get resources to spontaneously start making proactive, long-term thinking improvements. In order to break this momentum, it is often most effective to break up the different cycles of work. While most of the organization is still consumed with reactive work, a smaller set of resources is relieved from this obligation with the intention of focusing more on proactive improvements.

This is the logic and intent behind most continuous improvement departments, facilitators, managers, and champions. Most organizations, whether departments or entire companies, end up with some resources of this kind until the momentum flips over and the normal body of resources starts working on more proactive and planned work, breaking the vicious cycle of firefighting.

There is no right size or even level in the organization for this type of resource to be staffed. In industrial-based companies where there is more data on the subject, surveys show that 1 percent of organizations are dedicated to continuous improvement. Size is often less a predictor and cause of success than type of resource. Long-term success come from investing the types of resources that departments didn’t think they could live without into continuous improvement activities.

Problem 5: Job Descriptions as a Minimum Standard

Most job descriptions are written for the intention of hiring, and used more to weed out those incapable of meeting the standard than as a learning and development tool. Job descriptions in the end contribute very little to improvement and learning.

Beyond job descriptions, developing an ideal state for a job can generate more improvement within roles. It describes what perfection looks like. Obviously, people will not be fired for not meeting perfection, but will be “performance-managed” for not meeting criteria within the job description. Ideal states for jobs paint a picture, stretch imaginations, and allow for those who can excel to do so without necessarily violating standards or leaving others behind.

Very few organizations develop ideal states for individual jobs, but truly lean organizations do. Although often they are unwritten, they are talked about and discussed particularly in manager-subordinate relationships.

I’m sure there are many more challenges to face in a lean journey that good and innovative organizational design can help you solve. What challenges do you face? What solutions have you developed? Please share your story by commenting here.