Or the act of hammering a round peg into a square hole without even knowing it.
To drive the flow, to enhance the value creation the creator and maintainer of the product must be connected to the user so she/he can adjust, tweak, change and create more according to what the market wants.
When the organisation grows this leads to creation of an organisational structure to guide the information-, product- and work-flows. Take a typical large industrial entity like Apple as an example: it designs in California, produces in Shanghai and sells in Paris (and everywhere else). Product and it’s information must flow from the top, and the frontline must report from the bottom up so the folks in Shanghai can increase or decrease the production, and the designers and coders in California can tweak the product, or create new.
On the top of the organisation the mother spider has a leg on each string to allow resources to be allocated and prioritised. After all there are iPhones, iPads, iMacs and much more to spend on.
That would be the classic commercial industrial structure, full of “ERPs” (Easily Repeatable Processes), a “top-down” structure.
But service organisations that offers help one way or the other – say lawyers, consultants and healthcare – are facing a very different reality:
The end product is unknown when the customer walks in the door – will it be a simple cut and paste of a contract or will it be weeks of research, court cases and more? Will it be a quick rinse and patch or will it lead to life-long in and out of different healthcare entities? Every product delivery will be different and the whole value-creation and delivery process is a “BRP” (Barely Repeatable Process).
And most important, the really big difference to the “top-down” organisation: now the creator, maintainer and supplier of the product is next to the customer, she is on the coalface, decisions must be made in situ according to needs, or what happened just prior.
So now there is no need to route every bit of information upwards for detailed decisions on the top. The product creator-producer her/himself must be able to change the product- and work-flow path on the fly.
The mother spider needs only to have the overview so she can act according to overall needs and make general allocation decisions – shall we focus more on business law? Shall we outsource brain surgery? What resources do the creator-producers need?
This would be a “bottom-up” organisation.
And of course, this is how it is out there: take a look at a smallish law or consulting firm – all are producers, perhaps only supported by an office administrator that keeps the copy machine filled with paper, the one who prepares the environment for the producers. There might be a leader but no managers in the top-down sense.
This can only function if two things are present, and they often are: transparency and total accountability. Two things that are easy to have in small organisations where the lawyers or consultants eat lunch together or have other impromptu meetings where they exchange war stories or ask each other for help and in general develop their products. And accountability and clear responsibility? Easy, it usually takes the form of “it’s my customer”!
Then what happens?
The “bottom-up” organisation grows in size and starts looking for “proven solutions” that one can adapt.
And that’s when things often start to go horribly wrong – one looks for the most used, the best documented and what the management handbooks are full of – one adopts the “top-down” model. Sometimes under new and fancy names in order to look smarter, like NPM (New Public Management) for government services, a nice example of the emperor’s new clothes.
Example of misunderstood support arrangement.
Now the sound “bottom-up” organisation is hammered into a “top-down” structure that starts chipping away on the creator-producers ability to make decisions, and his/her value-creation time: New management layers are introduced which means new authorisation requirements, new rules and regulations, meetings, and a flurry of reports.
The flow grinds to a halt, glitches in the flow starts to appear, value creators spend more and more time on administration and duplicate work, while costs simply explode (somebody has to pay for the managers and the extra time things take).
Luckily, most lawyers and consultants are too smart to completely fall into the trap – at most they create some small partner-associate structures purely for financial reasons (increase personal income for partners), but never real new management layers.
But there is one glaring exception: Healthcare and in particular public healthcare in some European countries are big monsters and they’re funded by politicians who are on the prowl for votes at all times. This leads to a double whammy – adoption of “top-down” industrial structure, then even more parallel layers of control so the politicians can fulfil their urge to control, hidden behind the unassailable banner of democracy.
There’s another noteworthy effect, simple but devastating: When applying an ERP structure on a BRP situation you will produce huge amounts of exceptions! And each exception will produce it’s own process with reports and meetings galore. Then we have created an ever growing snowball rolling in the wrong direction.
And there we are today. Healthcare workers are getting more and more disillusioned as their days are getting more and more hampered with pleasing the controllers instead of working with patients. Costs are exploding thanks to ever increasing layers of non-value-creating managers and less and less time to spend on patients and better outcomes.
Time for a radical rethink: the governments and leadership must recognise what model healthcare fits into – it’s a “bottom-up” type situation with more or less only BRPs, it’s not a “top-down” situation and the ERPs are few and far apart.
Then they might start looking for a round hole for the round peg where the healthcare worker could be allowed to get back to his patient and the overall costs could become sustainable again.
(Cross-posted @ thingamy)