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MANAGEMENT UNLEASHED

Organising the organisation

To increase efficiency and profitability, make sure as many people as possible are responsible for measurable results

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More organisations are structured on whim and politics than commercial needs. Every corporation I've worked in has been overwhelmed with its own version of the Emperor's New Clothes. The boss says this is right, therefore it is right. A top man's ego has no place in organisation development.

ORGANISATION is necessary but don't delude yourself, it is not the answer to everything. We hear the words restructure or reorganise every other day. Managements have a touching faith in the power of moving the chess pieces round on the board. It has to be faith. Anecdotal evidence suggests that reorganisations rarely lead to improvement, while often disrupting without benefit and costing a lot of money. In one company I worked for, we used to have a Cost Reduction And Profit Improvement programme every three years. It was known by its initials CRAPI. Appropriate.

Your business should be built to maximise performance all the time. If it doesn't do so, it is a poor structure. In this series of articles, I am suggesting ways in which some of the present management practices can be upturned with productive improvement at very little cost, or, indeed, with actual cost savings.

Work flow and structure

Organisations are generally established by workflow needs. That makes sense, up to a point. The original, strict hierarchy leads to silo management. If your boss or subordinates didn't know the answer, you didn't get one.

Thus, the matrix organisation was born. You might have several "dotted lines" to people outside the primary line of command. Very sensible but for one thing. Instead of these being what I call "access lines" they became secondary reporting lines. Now we have a number of bosses, not all of them working together on all aspects of someone's career. Employees hate the confusion that results about who matters to them.

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A sensible, open organisation doesn't need dotted lines to allow for communication. It needs enterprising individuals who find their way around, seek out the best helpers and tap them for the particular knowledge and skills they can provide. Dotted lines give a spurious authority when what is needed is mentoring and coaching.

Moving your work along at a timely pace is likely to guarantee the best results, soonest. But soon today is often not early enough. The competition is snapping at your heels, making promises with offers that are better than yours. The answer is to put on more pressure. The consequences can be disastrous. From Samsung handing the press a field day with their so-easily-broken foldable screen to Boeing with a safety responsibility like no other in the world, too soon may be too final. Timely is an easy word to use, a difficult concept to engage.

Every corporation I've worked in has been overwhelmed with its own version of the Emperor's New Clothes. The boss says this is right, therefore it is right. This circular behaviour causes the downfall of many companies, including a recent example in Singapore, Hyflux and one yet to be lived out, the British Conservative Party. The boss is not always right. We need bosses who admit that.

What is an organisation for?

What do you want from your organisation? Top performance, top discipline, top motivation, top profits. And yet how seldom is the top really involved in seeing if those are delivered. Like a President endorsing his army's parade, a nod of the head and "carry on" and it's all over. All over, bar the hard work of trying to make sense of a whim. For more organisations are structured on whim and politics than commercial needs. The temptation to assuage one troublesome member of the team at the expense of efficiency is seldom resisted. Flattering a top man's ego has no place in organisation development.

Since business is about efficiency, competition and cost-profit relationships, it should be organised so that as many people as possible are responsible for measurable results. It doesn't matter how many profit centres you have. Each has a discreet purpose, a reckonable result. Cost centres can be just as effective. In both cases the team running them receives what ought to be 50 per cent of its rewards for achievement - and none of that extra for non-achievement. Moreover, they should decide the target to reach. I hear gasps of disbelief. Surely targets are set from above? Not in my businesses. My managers decide their rewards, their targets, their forecasts, with the help of their direct reports. Help, as in pin-sticking pressure.

There is a simple formula for doing this which I am happy to share with those seriously interested.

Those who decide, deliver

Those who aim and achieve, receive. Those who aim and fail, don't. Considering it makes a significant difference to your wages, you think about it. Once established, you achieve it. The decisions are thus passed down the line to those who must carry them out. Once people accept responsibility, they run with it. As boss you are then there to encourage, to help when asked, to learn about what is making your managers tick, to understand that no system is perfect, that good managers are flexible. Now the rhythm of commercial life is set in such a way that you can do your job, not theirs.

Where does the matrix organisation fit into this concept of responsibility passed down the line? Well, it doesn't. To me, the matrix organisation is an attempt to classify and describe something that ought to be automatic - or to systematise something that not only doesn't need systematising but actually gets damaged by rules. Dotted lines are dotty. What people want in their lives is clarity. Clarity is established by a simple hierarchy of knowing who you report to and who reports to you. Yes, you need safeguards to see that personality clashes don't dominate a working relationship. I call that management observation.

Confidence to seek help where it can best be found is the hallmark of a good organisation

You need personal development to grow and learn. That is mentoring. You need lessons in communications and cooperative operations. That is coaching. You need skills updating and new learning. That is training. Most of all you need to know that you have access to anyone in the organisation at any time to answer legitimate queries, to advance the knowledge of rising stars, to make the organisation alive and not just a chart of lines and colours. What serves an organisation is what serves the people working in it. No structure, no cross-reporting, no SOP can substitute for the personal responsibility of the individual who asks "am I sure that is right?" Any plan that lessens that responsibility or weakens the sense of personal pride of achievement is a bad plan. It is on the way to reducing trust. When you reduce it enough, trustworthy people become untrustworthy. Just look at any of the professions, anywhere in the world, and observe how increasing regulation is leading to increasing fraud.

Uniqueness never dispenses with fundamentals

Every business is different. The organisation to suit one business will be different from that to suit another. The fundamentals never change. Those who make your business work will only embrace it when the business embraces them. It is a mutual act of respect, as all embrace should be. As the senior of the two parties - probably both in wisdom and age - it is the boss's responsibility to show how that embrace is made effective, collegial and supportive.

For our greatest lesson in life is to understand that support comes from those who are supported, dedication from those to whom we are dedicated. In the Navy they put it like this: "The strength of the Ship is the Service, and the Strength of the Service, the Ship".

Who understands that runs a trim, tight and happy ship.

And builds value beyond all expectations.

  • John Bittleston is founder mentor and executive chairman of Terrific Mentors International.

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