From Processes to Hierarchies

In Reengineering the Corporation, Michael Hammer wrote about how times have changed, that specialization and division of labor of complex processes into simpler steps processed by a vast number of people are ways of the past. Efficient they may be, but no longer effective at satisfying customers. And therefore, processes of the past have to be reengineered. One of the main reasons is that as the number of steps increases, so does the likelihood for errors and/or delays. As I was recalling back some of my readings of Michael's book, it got me thinking about how it applied to organizational hierarchies.

Try this exercise. Get a number of people together. Privately tell one of them a story, any story. Then have that person tell the next person, also privately, the story that you told him/her. Continue till the last person has been told the story. Have that person tell you back the story. Chances are very high that the story will be a little different from the one you told the first person. Try the same exercise a few more times but with a larger group every time. How different the story will be roughly correlates with how many more people the story has to go through and how long before one person tells the next. Furthermore, the feel, the energy, the vibe and the conviction of the story will equally suffer, especially if the time it takes between the person being told the story to telling the story to the next is long.

So imagine an organization with many layers of hierarchy, how likely will a right decision be made if it's has to be evaluated at each layer. With each layer, the likelihood of the idea, information or even a problem to look, sound and feel the same decreases. It takes only one person to say no or make a wrong decision to stop a potentially very good idea or raise awareness of potentially serious problem in the near future from reaching the key decision makers. How will each and everyone in every layer be able to make the right decision when the 'story' is a little more different with each passing person?

Tom Peters wrote a similar post in his blog:

...let's consider a 6-layer organization making a decision?evaluating the right and wrong choice at each rung of hierarchy's ladder. And let's be generous, and imagine each level has a whopping 80% chance of making the right decision. So the odds of eventually getting the thing right are 0.8 to the 6th power?and that's 0.21, or 21% (just like emerging in the F4 if you're a #1 seed). Not so hot. It's like the communications game in which 10 people whisper a simple message to the person next to him or her. We start with "Jack's a smart guy to consider the middle-age market," or some such. Ten dilutions later, no malice involved, we end up with a simple, "Jack's an idiot"?or something quite close. It's a heck of an argument for de-layering in any situation.

Read the complete post here.

Tags: Organizational Hierarchy