Thursday, July 9, 2009

End to End Process Optimization is Overrated

There, I've said it. With modern insight into organizational design, the idea of analyzing an entire arbitrarily end pointed process seems counterproductive.

Let me defend myself. Today's environments are extremely dynamic. The problem with dynamic environments is that the path forward is ambiguous, uncertain and often complex. To lay in highly optimized end-to-end processes is actually detrimental to efficiency.

Why is this? Dynamic landscapes are constantly changing making optimums hard to find and are brutally punishing even if you are near optimum - think steeply sloped. High structure (and tight coupling) does not allow the degree of innovation and improvisation required to navigate this type of terrain - it is sub-optimal for highly dynamic environments. What works are loosely coupled, coordinated and independent clusters.

This allows for co-evolution which is more effective than trying to evolve the whole process at once. It allows for localized innovation, improvisation and the exploitation of emergent strategy while the organization pursues a more deliberate strategy.

To accomplish this requires is a guiding melody of sorts - a simple set of principle which guide the clusters. This provides room for innovation and for the execution of emergent strategies that are still in harmony with the overarching needs.

As an example, consider the high structure of a symphony iin which every part is meticulously predetermined. There is no room for innovation or improvisation. The symphony is what it is and if tastes change the symphony can fall out of favor.

Compare that with a jazz quartet which is guided by a simple melody or set of chord changes. This provides sufficient structure to collaboratively innovate through improvisation. If, over time, tastes change, the quartet has room to adjust. The simple melody is more adaptive.

So, I say set a deliberate strategy and guide with principles but allow your sub-units (cluster, entities, business units) to find their own optimums through innovation and improvisation.

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