Any business / any organization has its key business processes that create the products or services that make that business / organization “be”. Without these products / services the organization would not exist. The more these products / services address “must have” requirements of its customers with the agility to continuously evolve them to address customer needs and wants, the more successful that organization is.
“MAKING MY NUMBERS”
There is no secret that in many organizations there is a “silo” approach in doing business. The pressure of making money is so great that for each important sub-process of the end-to-end process (or enabling processes), there are “queens”/”kings” (i.e. higher level managers) that are expected to do anything in their power in their “domain” (read “silo”) to meet the numbers. Even their incentives are such that they have to improve “their” (“silo”) productivity, efficiency, etc, “to meet the numbers”. Please see the figure 1 below to understand the impacts:
This illustrates a simplified view of a business: we see the key business processes that create outputs – ideally, “value” for customers; we see the strategic planning process aligned with mission, vision, values and creating the strategic goals; and we see the many supporting enabling processes in any organization (finance, IT, HR, etc).
MANAGING BY PROCESS VS. MANAGING BY SILO
Assuming that I am (after a long effort in building my career) finally a higher level manager, say leading operations for Dept. 2 and assuming that I am in a traditional organization where “managing by silo”, rather than “managing by process” is the norm, this means that my incentives are such that I have to meet the numbers that are somehow decided for me for Dept. 2. In that case, of course, that I’ll be very focused on my Dept. 2 to meet my numbers, of course that I may have conflicting priorities with my peers. This is a reflection of the systemic approach in managing organizations by silos that may create white space risks. if I have to be focused only on my Dept. 2 to meet the numbers, I may not have bandwidth to spend more time taking with Dept. 1 to let them know what I really need and with Dept. 3 to understand really well what they need.
WHITE SPACE RISK
By not having continuous and effective communication and collaboration along the end-to-end process (the chain of creating value for customers) we create and accumulate “white space risk”. This has a big impact not only on the quality of our products / services, but in the overall risk in our key business processes. Even more: as head of Dept. 2, I am a higher level manager with many people reporting to me. If my incentive is aligned to meeting the numbers of my silo, I will deploy this approach to all the people reporting to me: to stay focused and do the best they can in our silo. It is very hard for me, as manager, to encourage communication and collaboration with the teams in Dept. 1 and Dept. 3 (or, in general along the end-to-end process). When this happens, the organizations pay the price of white space: not being able to monitor and improve quality of their products / services and having to deal with a lot of waste and risk in their end-to-end processes. Most of the waste and risk is generated by the white space created by the “managing by silo” approach.
HORIZONTAL AND VERTICAL WHITE SPACE RISKS
Aside from the “horizontal” white space risk in the chain of creating value for customers, there is also the “vertical” white space risk: there are few critical processes that should be bi-directional from the top of the organization (senior leadership) down to individual contributors and back up: cascading strategic goals, senior leaders communications, senior leaders focus on action plans to ensure achieving strategic goals, continuous improvement of operations, etc. Many times, these “vertical” processes have white space risks: the more layers of management, the more opportunities for white space that increases the enterprise risk. When white space exists in the approach of how the strategic goals are cascaded down to execution levels, this may change the operational requirements which will impact the quality of services / products for customers. When senior leaders communications are not in place or they are not end-to-end “vertical” processes fully deployed (again, “vertical” white space), this has a direct impact on workforce by NOT fostering a culture of engaged and empowered employees. People will come for the pay check, not for being part of a team and, by extension of an organization.
Any business / organization that is moving from a managing by silo to a managing by process approach will create a much stronger framework of reducing risk, business sustainability and a culture of an agile workforce based on collaboration.
References:
- Baldrige: http://www.nist.gov/baldrige/index.cfm
- EFQM: http://www.efqm.org/en/Home/tabid/36/Default.aspx
Biography:
Adina Suciu CSSBB, CMQ/OE, is principal consultant at Adav, LLC a Seattle based company focused on helping people and organizations to attain and sustain agility. She is also a Baldrige judge and examiner and assessor for the European Framework for Quality Management. She can be reached at adina@adavconsulting.com and at 206.234.8014.