Alternatives to address Departmental Inefficiency

Organizational Structure Alternatives

As organizations grow, the inevitable question becomes how to remain lean and mean? How do firms avoid a staid, bureaucratic future when adaptiveness and creativity spelled their success?

Especially in today’s world, one option must be to remain small. ‘Small’ in this context implies several alternatives:
1. Give up growth. Notice for large holding companies this option functionally becomes identical to the one below.
2. Refuse corporate overhead. Pushing support functions down to operating divisions implies duplication of effort and lack of synergistic leverage. But this strategy avoids the issues above leaving corporate management to a single minded focus on the organization, the benefits of which can not be over-emphasized. Notice this option often implies a preponderance of outsourcing.
3. Limit complexity of the organization. Concentrating on very few products or services, or separating large functional processes allows the whole enterprise to understand the mandate despite hierarchical silos; there is less to learn. Unfortunately this alternative has a tendency to re-arrange the silos.
4. As complexity of the holding company rises, create separate overheads in an effort to resemble 1.1 above. In practice this option means building all support groups at region, channel or product levels to control complexity and retain single mindedness of purpose. This option is nuanced in execution, and threatens confusion on many levels. Still, it is at least a theoretical possibility.
Add staff in constrained departments to keep up with demand. This is perhaps the most popular alternative. The foundational assumption here is that the department is already running at peak efficiency. More on this topic later, but notice that it does not fully answer all the issues outlined in the previous article, namely the isolationist effect of silos.
Allow constrained departments to outsource. This alternative provides some relief in that it may address the bottle neck issues, and it may goad IT to increase performance by introducing a competitor even while providing them with hiring candidates. The concern is that it requires yet another set of rules and regulations governing the circumstances where outsourcing can occur. And it threatens to cause friction between departments by disrupting team atmospheres (e.g., telling your doctor you’ve decided to choose someone else for your treatment) and requires further training of the third party.
The preferred choice is to permeate the systemic hierarchy altogether and embed IT professionals in the groups they support. If the IT professional supports multiple departments or profit centers, reflect it in your ABC accounting.

Benefits of Embedding Support Groups

Highland regiment organization, on Flickr

If innovation and productivity are goals, there are only two alternatives in the above list for the long run; refusing corporate overhead altogether and embedding Associates. No other options address all the issues. Embedding IT (and other support) Associates reduces bottle necks, increases cross pollination, innovation, and cross training.

Multi-disciplinary teams arranged by purpose or project or process develop content, cultural and team synergies with benefits beyond inter-departmental isolationist prejudice. Embedding increases the likelihood of quantum automation and productivity gains by reversing the stimulus response cycle outlined above. Since they are now intimately involved in the daily activities of the group, tech savvy professionals can initiate, prioritize and develop production improvements themselves.

Embedded IT professionals can also act as liaison with IT since they speak the language and understand the mini-culture if there is one. After all, IT is where they ultimately report although compensation incentives will reflect their new home and associated dotted line authority.

The value of this paradigm change can not be under-estimated. Consider a prevailing example. How many users in a given department are inefficiently maintaining duplicative manual databases or spreadsheets that a day of programming could negate? What are the ultimate costs to the system of adding surrounding manual complexity utilizing inappropriate talent to do inefficient labor? It ultimately threatens the organism.

Knowledgeable IT professionals bring almost unique abilities to increase productivity to operating team members given the technology tools available in today’s changing world. Programming priorities could easily change in 80% of an organization’s RFPs if IT more holistically understood the daily responsibilities and future challenges of its operating divisions.

Immersion of IT in the front lines also changes IT mentalities and culture. Too often IT has been rightly maligned for building systems that end up solidifying IT control and guaranteeing maintenance positions. Putting them in the teams themselves nurtures a more distributive and empowering view of development. Not only are they now us, there is no one left in the back office to do the work anyway.

Lastly, creative managers will notice this strategy is implementable without IT approval or C-level mandate; at last resort they can directly hire IT professionals into their operating groups. The risk here, depending on corporate culture, is departmental alienation by IT and in general as a consequence of implementing maverick actions.