Lean OFfice FAQ - Lean Office Management Structure

Management of different skills and expertise, geography, and customer segments or products is a top down or vertical process. This places the vertical management of activities at 90 degrees to the horizontal process of creating value. The two are cross-purpose to each other.

Consider a company that is organized by functions such as sales, marketing, engineering, production, and customer service. The value stream to launch a new product is a horizontal flow through each of these functional organizations. But the management of a new product launch occurs vertically by separate organizations depending on the current activity. Using vertically centered management to coordinate the horizontal flow of work causes no end of problems. Think silos.

Lean Office helps tackle the vertical management of horizontal value streams by establishing a system-wide view of how value is created by the organization. It adds a discipline of managing value to managing skills, location, and customer requirements. Maintaining a value discipline helps guide management decision making to optimize the horizontal flow of work.

Top

2. Does Lean Office require senior management commitment for it to succeed?

Lean Office can be implemented both from the top-down or from the bottom-up. For an organization to reap the full benefits of Lean Office eventually both will be required. But Lean Office techniques are easy to adopt. They do not require extensive training or "black belt" certification to get started. Experience can be gained with Lean Office prior to rolling it out across an entire organization.

A single group can apply Lean Office concepts to a single value stream within that group. For example, a sales organization could look at applying Lean Office to order processing. Most organizations process multiple types of sales order. To get started, Lean Office could be applied to just one type of sales order. A value stream map can be created for that one order type and Lean analysis conducted to maximize the value and minimize the waste.

The organization will benefit from applying Lean Office to any value stream regardless of its size. The techniques to improve performance are also tend to be independent of size. So in addition to the immediate performance benefits the organization will also learn Lean Office techniques that scale as the size of projects scale. Then senior management can be engaged when Lean Office techniques are well understood and the projects start to cross interdepartmental boundaries and require management involvement.

Top

3. How important is leadership for Lean Office?

Command and control organizations rely on the assignment of formal management authority. All decision making starts at the top and weaves it way down to those performing the work. All results and status information follow the same chain of command in reverse. The result is a vertical organization that requires a tremendous amount of overhead to manage the work as it flows horizontally from one person to the next, one department to the next.

Lean Office requires organizations to rely more on leadership than a strict command and control structure. Leadership emphasizes modeling the way, inspiring shared values and encouraging the heart, enabling others to act in concert - as opposed to giving orders. Leadership involves skills such as inspiration, persuasion, and creativity, so those without direct authority can still positively influence others.

Lean Office techniques help to establish the value priorities for each value stream of an organization. Once value priorities are established, leadership is critical to maximize value creation and minimize waste, by maintaining shared value priorities across employee (functional), regional, product/service, and customer domains.

Leadership requires permission of the group that is to be led. It is not enough to set yourself or anyone else up as a heroic figure leading the charge. Lean Office requires that employees agree to be led in the pursuit of value creation and waste reduction. Without this buy-in, change management becomes an effort greater than any potential improvement. With this buy-in, Lean Office leadership establishes value priorities and identifies where each employee contributes; while employees are empowered within that structure to continuously knock down barriers and search for ways to add value to every activity performed.

Top

4. How does the concept of span-of-coordination benefit Lean Office?

The Lean Office Glossary defines span-of-coordination as the reach of an individual's or team's responsibilities; involving both leadership and support responsibilities in addition to authority (span-of-control). In the past management hierarchies almost totally functioned under span-of-control. Coordination involves the exchange of ideas, formally and informally, outside of span-of-control boundaries.

In an office environment work can be thought of the flow of ideas from one activity to the next. Sales, marketing, engineering, and customer service all work with ideas; capturing, enhancing, connecting, and promoting them. Lean Office is an umbrella term for techniques to maximize the value of ideas.

Establishing span-of-coordination concepts within an organization helps to maximize the benefits of Lean Office by increasing the breadth of individual and team responsibilities. They will be encouraged to maintain a view outside of their particular span-of-control and engage in leading or supporting system-wide efforts to maximize stakeholder value.

Top

5. How does Lean Office serve as a tool for building matrix organizations?

The purpose of any organizational structure is to provide management focus. When considering options, the organizational structure chosen for any period of time should reflect the areas needing the most management focus. At the same time reducing management attention on less critical areas or those that can operate under autopilot. Given these concepts it is rare that a single organizational structure will suffice over a long period of time given the amount of change in most markets.

Matrix organizations inherently provide greater span-of-coordination than traditional organizational structures. The advantage is wider management focus and increased optimization of resources across a greater range of the business. The challenge of a matrix organization is its complexity; both defining and executing it.

Lean Office can be used as a tool to define and execute matrix organizations. With its emphasis on stakeholder value creation, Lean Office provides a structure for evaluating matrix alternatives. Matrix organizations are usually defined across two or more of the following domains:

Employee (function)
Product/service
Process
Region
Customer

For example a team within a matrix could have responsibilities for both product/service and customer or function and geography. Which is more appropriate? Lean Office can provide the answer using the following approach:

Establish the values and performance principles governing the targeted organization
Define the current state value stream maps using roles & flows
Build a table with value stream roles down the side and the planned value matrix domains across the top
For each cell of the table establish whether the matrix role has 1) authority, 2) leadership, or 3) support responsibility for the value stream role
When the table is complete evaluate the breadth and depth of each matrix role to determine if the objectives of the reorganization are met

Once the organizational matrix structure is established then the value matrix table also facilitates the matrix's execution. Metrics can be developed for monitoring, motivating, and maintaining the performance of key roles of the value stream. Since each cell of the table defines the intersection of responsibilities, performance objectives for those metrics can be assigned based on the defined responsibilities. The health of the value streams becomes a fundamental indicator of the success of the matrix organization (and of the organization in general). And any issues with value stream performance can be traced directly to the responsible areas within the matrix organization.

Top

6. Is it necessary to adopt a matrix organization with Lean Office?

Implementing Lean Office techniques has two impacts on the structure of an organization. Lean Office increases the organizational awareness of:

The flow of value producing work from one organizational role to the next
The need to manage complex interactions that reach across organizational domains

Prior to Lean Office the majority of focus is typically on the work performed by an individual or team without regard to where it came from or how it impacts the rest of the organization. Management and staff attention is oriented more vertically than horizontally. After Lean Office the horizontal viewpoint expands. In order to increase the stakeholder value of an activity it is necessary to do so in the context of all of the activities that proceed and follow. The same is true to reduce most waste.

This is not to say that Lean Office requires formal adoption of a matrix organization structure. Lean Office can be implemented within the classic command and control structure of a functional organization. To maintain a program of continuous improvement using Lean Office does require the adoption of company-wide value priorities and principles. It also requires that at least some metrics and management objectives are aligned with end-to-end stakeholder value creation. This is as much for the empowerment of individuals and teams to cross organizational boundaries in the pursuit of value enhancement; as it is to measure and manage progress.

Top