Think outside the box, or inside the Silo?

I recently read some very interesting discussion points answering “How to get employees to be more innovative and creative?” in the Operational Excellence Group on LinkedIn. One of the points that was brought up, and that I’ve witnessed myself, is that in organizations that do not subscribe to lean philosophies, management in these organizations tend to build their organizations with silo structures.

There seems to be a utopian view of silos by some managers where assigning resources to a specific function and ensuring they only focus on that function brings a certain level of control. In fact, it can be said that the silo structure is a very good way of controlling and knowing what everyone in an organization is doing. In general, managing silos is easier because functions are dedicated and thus knowing where an additional resource is needed or not needed is relatively easy to identify. This makes for ease at work-load balancing.

We’ve all heard the terms: “you have a job to do”, or “don’t color outside the box”. The big problem I have seen with Silos, and I’ve experienced this first hand, is that the spirit of cooperation between groups is limited to working and improving deliverables from one silo to another. Because the nature of silos is to ensure resources are used to the max, individuals have little lee-way in experimenting with extracurricular tasks. The goal is to do the job that’s been assigned. Even the attempt to assist or make an unsolicited suggestion to improve another silo is viewed as interference.

Lean organizations, by nature, break with the silo mentality and thus require a different kind of management team. They require one that is engaged with and spends time at Gemba. Because resource allocation is not black and white, they need to coach and foster a cross-functional culture. They understand that 80% of an individual’s work load is to complete a specific job, but the other 20% is to engage in extracurricular functions. These functions, in general come down to cross-departmental training or participating in kaizen activities. These managers understand the value of giving individuals flexibility to learn and observe. They provide the tools and time to allow them to engage functions outside the box.

The benefit of lean is that individuals are encouraged to work outside the box, and think outside the box. The very nature of lean requires everyone to continually improve. It’s not about delivering the task you’ve been assigned, but going one step further and improving it. Teamwork and idea sharing (yokoten) is a key component here, and thus individuals are welcome to participate and collaborate in problem solving cross-functional teams.

This type of functional cross pollination results in what is termed a ‘learning organization’. The ultimate benefit is that teams and individuals are not only trained on their tasks, but also have good knowledge of other functions of the organization. This allows them to improve and innovate more effectively because they have an understanding of upstream and downstream processes. They no longer innovate to improve their work areas, as they would in silos, but rather innovate to improve not only their area, but other’s areas. Often, workers in lean organizations are referred to as "engineers" because they are in a position to not only identify problems but solve them too.

Ultimately, for managers, this gives them a different kind of control. Even though they must spend more hands-on time at gemba, they are given the benefit of the agile organization. One that is more adaptable to rapidly changing situations.

So what how does this translate to that original discussion on LinkedIn? In silo based organizations it is hard for individuals to be innovative because the encouragement is not there. They are constantly being reminded to “do their jobs”, and that usually does not mean to engage in improvement activities. In a lean organization individuals are encouraged to improve. In fact “do your job” has a different meaning in lean… it includes not only performing you main functions but also working to improve the organization as a whole. At the center of “the house of lean” is people, teamwork and Kaizen… and Kaizen is innovation (albeit, incremental innovation).

Thinking outside the box is a byproduct of lean.

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Are you able to improve your Business Processes effectively?

Organizations are always striving to be better, meet their customer’s ever-rising demands, and remain competitive. There are many methods, practices, and philosophies in which they engage to achieve this (Innovation Management, Continuous Improvement, Lean Manufacturing, 6-sigma etc.), and organizations invest heavily in tools and consultants to implement these effectively.

One of the often overlooked methodologies is BPM (Business Process Management). Organizations, when asked, will normally state that they feel their processes are under control, but if asked how they make sure they are constantly improved and modified to meet changing needs; their answers get a little blurry.

It turns out; most organizations do improve their business processes, but usually as a reaction to a problem. Even though they engage in some of the above mentioned improvement methodologies, they are usually product and service centric, and not Business Process centric. They lack the tools and culture to proactively engage in Business Process improvement like they would in their manufacturing and service delivery processes.

If we follow the WikiPedia definition for BPM (Business process management is a holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients), we realize that Business Processes actually govern all other processes engaged in by organizations. We actually need business processes to accomplish all other processes in the business cycle.

Most organizations will have tools and procedures to enable their team members to identify and execute on improvement opportunities in their products and services. This is because of tangible gains (normally reflected in the bottom line) to be had with the execution of improvements. The tools used will ensure the improvement is captured (process flows, instructions and standards are updated in central repositories), communicated, and translated to the bottom line. The tools and processes used ensure teams impacted upstream and downstream are in-the-loop.

However, organizations seldom invest in tools and expertise to effectively manage and improve their business processes. A major reason for this is that they do not look at business processes as being equal to, or more important than a manufacturing process.

The benefits of improving these don’t automatically translate to the bottom line, and thus organizations usually do not take a proactive approach to improvement. Problems with poor business processes are usually reflected in wasted time (usually made up by employees working overtime), and are normally not addressed unless they have an adverse and measurable effect on the bottom line – sometimes leading to a real line-stoppage (i.e.: someone did not place an order for parts using the ‘new process’).

These types of line-stopping (and consequently very expensive) events are usually a result of not having well defined standards and procedures to manage the business process lifecycle. This can be quickly identified by two critical missing elements:

a) Business Process Maps:
Just like a manufacturing process flow-chart maps the flow of material and value-add activities at each station in the process, the Business Process Map shows the flow of objects (Usually Information) and activities performed at each step. There are specific sets of instructions, standards, documents, roles and resources related to each process step. The business process map becomes the standard baseline from which change can be made.

The result of not having Process Maps can be illustrated by team members having poor knowledge of upstream and downstream processes and how they fit into them. This in turn makes it hard to identify upstream/downstream areas that will be impacted by change, as well limits the ability to measure and justify change (specially improvements). This normally means Status-Quo is the rule, and change is only initiated after a business ‘catastrophe’ occurs.

b) Effective communication tools;
We have all experienced the occasion when we followed a known procedure, to later find out from a downstream process that we did not follow the ‘new’ process, or used an outdated document, thus resulting in repeating the work. (This specific scenario probably causes billions of Dollars in wasted effort every year.)

In a manufacturing process, where a line stoppage can lead to enormous costs, it is imperative to communicate changes to ensure downstream stations are prepared and don’t receive a ‘line-stopping’ surprise. Business processes should be no different, however, seldom are business processes tied to exact execution times, and thus communication is not given high importance. In fact, it is typical to see communication happen reactively like this:

• Dept. B changed a form, and everyone in Dept. B. knows. 
• Mr. X from Dept. A. uses the old form and submits to Dept. B. 
• Mr. X is told the form is outdated and has to resubmit it to Dept. B. 
• Mr. X now warns his Dept. A. colleagues to make sure they use the new form. 

Effective communication tools and methods are critical to ensure everyone relevant to a change is instantly made aware of the change and the impact to their work.

In conclusion, when looking to improve your business processes ask yourself this: Do I have a documented process standard (typically process maps), and the right communication tools in place to ensure changes and their impact are immediately known across the organization?

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