Organizations have been traditionally structured to manage work in a top-down manner. Using this structure, leaders formulate and implement business plans by allocating resources and directing managers along department lines, and through business functions and job responsibilities. These jobs are typically bound by vertical and hierarchical reporting relationships with increasingly narrower increments of responsibility.
Often missing in this thinking is the recognition of the more natural workflow-based relationships that exist between jobs, functions, and departments. Workflows horizontally across organization boundaries from department-to-department, function-to-function, and job-to-job. What connects workflows are business processes that align to form business systems. Employees access enterprise knowledge to perform tasks; tasks combine to create processes; processes connect to form business systems, and business systems align to deliver an overall enterprise purpose. When done well, workflow-based management structures seamlessly facilitate the movement of work. When done poorly, the organization structure becomes a barrier to be overcome to get work done.
Traditional Organization Structures Become Barriers to Workflow Execution
We know that most problems lay hidden in the whitespace between organization boundaries, functions and jobs. Over 70% of all business problems are directly related to deficient business processes. Most business processes are undefined, not followed, too complicated, full of waste, unmeasured, lacking customer understanding, and missing accountability. By organizing vertically, it is difficult to uncover the real cause of a business problem, where it lays, who is responsible and who has authority to solve it.
Organizations invest substantial sums in facilities, technology, people, and equipment to provide the assets necessary to achieve their mission. It is rare, however, to see these same organizations invest in business processes. Yet, it's the effective management of business processes that turns assets into productive value. Without strong processes, asset investments often perform poorly relative to their potential and enterprise performance suffers as a result.
Think Horizontal to Better Manage Work
Organizing horizontally is an essential element to building strong business systems and processes. And strong business processes provide the engine that powers enterprise performance. They make the execution of leadership’s intention possible. By defining, improving and aligning strong business processes, organizations better manage work to create superior customer value, improve profitability and the substantially mitigate risk.
Further Reading: THE PERIGON METHOD