Monday, August 8, 2011

Org Design Deep Dive – Part 2

When our company merged and we designed the new Treasury area, we performed all the standard process design activities – SIPOC diagrams, process flows diagrams, input and output analysis, metrics and measures, etc.
I was overjoyed to be a part of this process, since Lean and Six Sigma has been a pet research area of mine - I have read a lot of books – for years.
So why did we find it so difficult to apply these concepts to Treasury?
My grudging conclusion is that a Treasury professional is at heart a knowledge worker, and that the major process analysis methodologies like Lean are related to production work, not knowledge work. Knowledge work is a different animal.
In production work, we have sample sizes of thousands where we can make statistically valid standard deviation based control charts, and we have tangible items that we can design pull-based procedures around.
Knowledge work centers around process design, problem-solving, creativity, exchange of relevant information, and other activities. These are difficult to measure and monitor in the same way as production work.
To make an analysis of cash flows or investments pull-based there would be a significant amount of time that would need to be spent providing the basic information so an analysis could readily be pulled. These hours and hours of effort are wasted if the analysis is never requested.
One solution many use is to identify up-front what information is needed and at what frequency. But this gets back to our earlier problems regarding perfect prescience. The analysis and work generally required of knowledge workers is ad-hoc, based on the situation on the ground at the time, continuously morphing from one shape to another as events unfold. It is in large part unpredictable, and cannot therefore be planned into the IT department’s annual project budget, or the quarterly closing item checklist, etc.
Yet it must still be done. Are you going to say to the CEO that the analysis they are requesting is unavailable because they did not have the foresight to request that particular piece of information two years ago?
This juxtaposition of knowledge work and its dynamics, layered with the operational realities of the company, will form the heart of our analytical model. Stay tuned…
I would love to hear your thoughts about organizational design or your stories on this topic if you have them.
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