It’s fashionable to denigrate hierarchies. Critics suggest they are too controlled, siloed, and rigid. But they help create stability. And if your overarching strategy is production, you need stability, results and authority. A hierarchical organization, led by a chief enforcer with a command and control attitude is just what the doctor ordered.
The framework for What It Takes To Accelerate Through A Strategic Inflectio Point is laid out in that earlier article. The main point is that you must align your culture, organization, operations and CEO’s real job around one of four strategies. This particular article explores the organization required to support a production strategy.
If you choose to be best in class at producing, you have to produce the right things, the right way, every time. This requires an obsessive focus on stable, consistent results. Your people need to respect authority and function well in an environment marked by command and control.
I’m not in any way suggesting that hierarchy is the right organization all the time. I’m not even suggesting it’s right most of the time. But it is right for an organization in which reliability is key to success.
Understanding the difference between the U.S. Army and U.S. Navy’s cultures will help you understand the concept. As discussed in my article “Why Organizations Get The Employee Engagement They Deserve,” the Navy has a command and control culture designed to maximize compliance and minimize mistakes. This is similar to what you want in a production-focused organization: no mistakes.
The Army on the other hand has a culture designed to encourage contribution. Decisions are pushed down and out so officers can respond flexibly to situations in the cloud of war in line with their commander’s intent. This is similar to what you want in a service-focused organization. But that’s a different article.
Zara provides a good example of a production-focused organization. They don’t design clothes. They spot good ideas on fashion runways and then mass-produce similar products. Their secret sauce is their ability to take ideas from others’ runways to their own stores in 15 days or less. They are a production machine.
We were working with one nameless mining company that was wresting with whether they were a production company or a service company. Actually, that’s not true. They weren’t wrestling with it. They hadn’t even thought about it.
Half their executives thought they were in the business of moving dirt. They saw their mandate as getting minerals out of the ground as efficiently as possible.
The other half thought they were in a service business, providing materials to customers who turned those commodities into higher-value products. They wanted to invest in customer service as a point of difference.
One executive asked if they could do both.
They could not.
The reason is that these strategies require diametrically opposite organizations and cultures. As producers moving dirt, they needed to cut out as many distractions as possible. People needed to do their assigned jobs reliably and efficiently – and no more. Customer service organizations need to focus on their customers, doing whatever it takes to satisfy their needs.
Implications for you
Run from hierarchies unless you need them. They are, indeed, controlled, siloed and rigid. A hierarchical organization will suck the life out of designers or customer service people. The constraints will be more than they can bear.
But being best in class in production almost always mandates a hierarchy. You need the stability. You need the ability to command and control reliable, repeatable, efficient processes. If you’re the CEO, the “E” stands for “Enforcer.” Your job is to put in place clear, focused policies and make sure everyone follows them.
In many ways, the choice of organization structure is the pivot from strategy to operations. Strategies are theoretical gibberish until they are put into action. Operators focus on getting things done. The organizational choice brings the strategies to life. And a hierarchical organization design can make the swim lanes clear. In a hierarchy the more individuals stay in their swim lanes, the better the whole organization functions.
It’s painful and constraining, but effective.