Did you ever hear the album What were once vices are now habits by the Doobie Brothers? Well, except for a couple of songs, you didn't miss much. I always thought the title was rather clever though. Their point was that over time people's perceptions changed to see things in a different light.
Today's riff will center on the fact that we've allowed what were once capabilities to become stovepipes in our business. Yes, it's time to take on the traditional corporate structure, in which capabilities like sales, finance and marketing have become rigid stovepipes and barriers to work across the enterprise.
Once, a long time ago, probably just before the age of the railroads, business were mostly small craftsmen and merchants. Many times the person who procured raw materials, made an item and sold it were the same person. I gave the breakpoint as before railroad (BR) and after railroad (AR) since the advent and growth of the railroad forced people into specializations - the railroads even forced the US to accept a more consistent national time keeping.
Railroads were one of the businesses which introduced the concept of a stovepiped organization and a command and control business operation. This was fine, since the railroad and telegraph were the two technologies which moved information along and information did not move any faster than these two technologies.
Command and control and functional silos were important as organizations grew larger, and a few knowledgeable managers were responsible for directing large numbers of blue collar and uneducated workers. This model grew and evolved through the 1950s and into the 1970s when a change occurred. By that time, the average employee had much more education than before, was able to manage information much more effectively and had a much more vital stream of information at his or her fingertips.
The Japanese, without such a long history wedded to the command and control organization, were the first to experiment. They formed work teams, quality circles and many other self-organized and self-managed teams. Gradually, the rest of the world took notice and began to push down decision making and team building to the individual worker.
Then, of course, we could do away with the middle manager! Not so fast. The middle manager was the "glue" that kept upper management and the actual workers together, translating corporate vision into actual direction. There are still two problems in this model: 1) the vision of the company that the senior managers hold - which is still wedded to the command and control structure - and the actual capability of the individual worker - who has much more initiative and capability than the senior managers are willing to unleash.
So, where are we heading? What were once capabilities - sales, manufacturing, customer service - are now rigid stovepipes, but don't add a lot of value to the customer or the product on a regular basis. Workers are more educated and more capable of making decisions, and have more information and the tools to decipher that information. We can restructure lines of reporting and business processes much more easily than ever before.
We have the ability to unleash teams and organize them in any way we can imagine - along a business process for example, or to optimize customer relationships. We have the right people, the right technologies and most importantly, the right information to organize in any way we see fit. What we don't have yet is the cultural awareness and commitment to change the business structure to fit the needs of our customers, business partners and employees.
What's the right model for your business? Top down command and control? Functional stovepipes? Organized around a business process? Emphasizing a specific capability or function? Geographic concentration? Organized specifically for a specific customer or group of customers?
There's no mystique to the command and control top-down stovepiped organization. Organizational models have mutated and changed based on the needs of the firm and the capabilities of its workers and its data management. The next evolution in organizational structure is just around the corner. What are now interesting experiments will soon be the established corporate structure.