The President said it was high time the government got reorganized the other night in his State of the Union speech, drawing a few laughs when he pointed out the inefficiency of having the Department of the Interior responsible for salmon when they are in fresh water where they spawn and serve as an important link in the animal kingdom food chain, the State Department look out for them when they take to the high seas and are at the center of international fishing agreements, and the FDA take charge when they leave the water all together and begin their trek to the dinner table. Good enough idea to take a look, I suppose, but restructuring the silos of government won't help much – it will just change the nature of the problems. The root of the issue, you see, is a dysfunctional culture; and the right organizational structure can reinforce and support a strong culture, but it can't fix a bad one.
The saddest part is all of us in the private sector who hoot at and deride the government for such siloed, redundant, contradictory inefficiency … and then go back to the factories where widgets are controlled by an engineering department when they are designed, a production department when they are made, a supply chain department when they are in inventory, and a sales department when they go to a customer. Or our hospitals where patients are handed off from one functional department to the next. And each department is ultimately presided over by a specialized senior manager with unique metrics tracking how the widget or patient was handled while under his or her jurisdiction – and to heck with what such temporary optimization along the widget or patient's cycle through the business did to the widget, patient, or performance of the other departments.
Organizing by functional silos is bad for everything and everyone concerned. The lean thing to do is to organize by value streams, but when that discussion begins a debate inevitably rages over whether the value stream organization is best structured by product or by market. At the root of these arguments is typically nothing more than a good, old fashioned power struggle – a turf war of the sort that goes on all the time in command and control cultures. The old functional organization is advocated by engineering, supply chain, and other functional executives desperate to preserve their authority; product based value streams are the choice of operational folks who believe that such a structure will give them all the power; and market /customer based value streams are the organization of choice for sales and marketing folks who see it as a chance to call all the shots.
If the decision concerning the optimum organizational structure is seen as a decision over whether technical optimization, operational optimization or customer optimization will take priority over the considerations of the others – that a boss focused on one of the aspects will be the big kahuna with the authority to overpower the others – then the choice of organizational structure really doesn't matter. Pick whatever you want. Excellence is unattainable no matter how the lines are drawn on a chart.
Likewise, if Mr. Obama decries to put the spawn-to-supper-salmon-cycle all under one specialized group, but does not fix the siloed culture of government the he will most likely make things worse, not better. Only when a low level forestry guy, a mid level Sate Department woman and an FDA director can cut across organizational boundaries, give full weight to each others opinions and concerns, sub-optimize their own functional metrics for the good of the whole, check their egos at the door when they go into the meeting, and make decisions without having to communicate and get approvals up and down muti-level chains of command can the problems of government salmon policy be eliminated.
In your company, technical, operational and customer satisfaction are all important. Work is not a zero sum game with winners and losers determined by who derives more power based on their place in an org chart. The best organizations I have worked with have sloppy org charts that no one keeps up to date and no one really cares about. Decisions are made by consensus, not fiat. Executives, production folks and everyone in between have equal access to each other and all of the data, and know that they have equally valid opinions when it comes to making decisions. They will argue, discuss, brainstorm and debate with each other, going around and around the barn for as long as it takes until a decision is made that optimizes the whole. It usually doesn't take too long, and they make very, very good decisions as a result.
No effective organization can be defined on two dimensions – on a piece of paper with boxes and lines. Debates over whether lines should be solid or dotted are a waste of time. The organization consists of dozens, hundreds, even thousands of nodes interconnected by lines of communications everywhere to others with technical, cost and customer concerns. It is effective only when the people at each node have complete respect for the knowledge and concerns of the people at every other node, and they are all driving to a shared commitment to pursue a clear, intelligent statement of the organization's true north.
I don't think Mr Obama knew what he ws biting off when he promised to fix government. And before most of us get too carried away belittling government waste we ought to ask whether we are really much better, or whether we are still wasting time arguing about lines and boxes on pieces of paper.