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Chances are that you unfortunately have the wrong structure for your business

In the two previous weekly newsletters, I described how important it is to have structure in our improvement work and also a new improvement structure in our operations.

Now I will most likely step on the toes of some who read this. This is because I will argue that the structure that the majority of colleagues in the industry work with and teach, does not work. The likelihood is that if you have already done process work, you have got that structure for free.

Accomplice, once upon a time

I know, because I have also worked according to that structure. But like many of my colleagues, we see that it never really worked out. By “good” I mean that there was never a real “swing” as a result of the process development.

As a result of this work, there was once again a project to improve the way of working, but it did not have the effect that was expected. It was never something that anyone really cared about and took to heart. It became something that only a few in the business work on, but not something that everyone works on.

What is the reason then?

  • Well, it’s because it’s a structure that doesn’t hang together.
  • A structure that is only technocratic and not logical.
  • A structure that does not show the real flow of value creation that exists in the business.
  • It is a structure that allows you to create processes, which are not actual processes.
  • And a structure where it is easy to get processes that are not connected to anyone else, but just there, “hanging empty”.

And since this structure does not show the natural flow, but is technocratic, illogical and makes no sense, well, nobody will recognize it and will not want to use it.

It will continue to be a structure for consultants and specialists in the business. But never anything for the employees. Never something that representatives proudly show off when explaining how their business looks and creates value.

Wrong structure

So what is the wrong structure? Well, it is the structure based on three types of processes:

  1. governance and management processes,
  2. main processes and
  3. supporting processes

So, there you have it; that the structure that the majority of businesses use, in my experience, does not work.

I told you; I was going to step on some toes. 🙂

The right structure

But in order not to just be the one to say what doesn’t work, I will of course say what does work.

The structure that I completely switched to over 15 years ago is logical and focuses on whose requirements and expectations you are satisfying. In fact, this is the key in any process; someone wants something and there should be processes (networks of interrelated activities) that deliver this something.

This focus makes this structure logical and a natural part of the value creation flow.

This is because the requirements of a business change through the value creation flow.

First in a business we have the requirements of the owners. They want to ensure that the business lives up to the WHY they set.
Then there are the demands of the profession and the demands of the market. These require that the right conditions are in place to deliver value to your customers. If the right conditions are not in place, staff will not want to work in the business. Those who are market to the business, i.e. are likely to become customers, will never choose to become customers.
Finally, we have the most important requirement maker, and that is the customer. The customer, whatever you call them in your business, is the one who has chosen to pay, directly or indirectly, to have value created for them.

This means that these three requirements also become three phases of processes. These are:

  1. We take out the direction of travel
  2. We create the conditions
  3. Delivering value to our customers

We take out the direction of travel

In this phase of an activity’s processes, there are all the processes that create the very value that phase is called; taking out the direction of travel. It creates comprehensive plans that take a long-term view of the business and where it is going.

Typical things that are “talked about” in these processes are the strategic plan, the overall business plan, acquisitions and sales of companies and units, and more.

Typically involved in these processes are the management and the board. But as we are talking about processes with roles as performers, it is of course not tied to any line organisation, but employees from the whole business can participate if needed.

We create the conditions

In this phase of the business, we create the conditions needed to create customer value. Typical processes here deal with product development, investigation of development needs, development of facilities following these investigations, personnel development, marketing or information management, and more.

If you don’t create these conditions, you won’t have anything to deliver to your customers. You will also not have as many customers as you would like as they will not know you exist, or what value you can deliver.

Delivering value to our customers

In this phase, you deliver value to your customers, whatever you call them, in a way that makes them happy and satisfied. Of course, these differ greatly depending on the nature of your business.

  • If you supply water and sewerage, this is where you connect properties and serve the property owner if necessary, and of course this is where the supply of water and disposal of waste water is. You also do meter readings and billing, as well as meter changes, inspections, and more.
  • If you are a property owner, this is where you make sure to adapt the premises to the needs of the tenant, take care of the premises on an ongoing basis (such as cleaning), and service the tenant based on their ongoing needs.
  • If your business is in the social field, this is where you deliver home care, home health care, financial support, assistants and more.
  • If you sell shoes, this is what you do; sell shoes. But also serves customers when they have needs after purchase, such as perhaps repairs, complaints, cleaning and more.

When you can clearly see the processes in this phase, it is also much easier to work with your product portfolio. That is, what it is you deliver to your customers and how you do it best. And also if there are things you can learn from your deliveries that will enable you to develop your products further (in the We create the conditions phase).

Two more parts

There are two further elements to a well-functioning operational structure.

The first one is to gather processes that can be called from all other processes, so there is also the group of cross-functional internal processes. These include processes for financial monitoring, management of IT support, payment of salaries and support to staff.

The second is the so-called Perspective, such as quality, environment, work environment, safety, and so on. This includes all the elements that permeate your entire business and all the processes you have.

Things that many people put into supporting processes, but which are not actually processes in themselves, but, as I said, should permeate all other processes. These are the ones that come to life here and will facilitate their impact in the business.

I hope you can begin to see the strength in thinking differently from what has been the norm for so many years?

In order for this weekly newsletter not to become a whole essay, I choose to stop there. But if you want to read more about this structure, you can do so in the book A Little Like the Dalai Lama for Organizations. It is available for purchase (SEK 200:-, incl. shipping) by replying to this email. Just write DALAI LAMA and I will send you the book.

If you would like to know more about what the above structure would look like for you in your business, just reply back to this email with “STRUCTURE” and I will contact you for a briefing.

And if you want to buy the book and at the same time learn more… well, write both words. 🙂

I wish you a happy spring, with all that it entails with raking, planting, boat polishing, car washing, window cleaning and more.