Klaus Lyck Petersen, Group Process Manager at wholesaler Solar A/S in Denmark, talks about the importance of supporting cross-functional and cross-departmental communication within an organization, to ensure everyone understands the purpose of the lean journey.
Establishing an efficient communication flow is definitely not easy. However, when it works, it is probably one of the most useful elements we can introduce in our business, as it gives us visibility on what happens in the organisation and to the people in it.
One way or the other, there is no doubt that communication always has an effect. Just look at the world of sports: how often do we see the coach on the sideline yelling and talking to the team about what they should do next? And what percentage of that communication is actually transformed into value-added, namely goals or points?
This image somehow reminds us of line managers and managers who are communicating to the employees what the issues of the “game” they are playing are. Again, how often do those recommendations and suggestions turn into value adding work that ends up benefiting the customer? Similarly, discussion between directors in the same organisation rarely brings the desired results.
For a long time, we at the Solar Group have focused on processes, meaning we have a process landscape for the business that is supported by our IT system template. This is the result of our lean efforts to engage in an SAP implementation. But by having these processes in place and focusing on the communication within those processes, you run the risk of constructing horizontal silos, which results in a sub-optimal situation where processes are not linked with each other and different job functions don’t communicate, only minding “their own business”.
This has been a risk we were fully aware of when we started to work, think and improve with a process mindset. This awareness has allowed us to set up a structure that ensures that there is in fact an open channel of commutation between processes in different layers of the organisation.
What we did at the beginning was to look at the challenges we had experienced when we simply tried to establish a flow of communication within a “normal” silo-based organization. We learned from the root causes of the mistakes we made in that setup experiment. At that time, many didn’t see the point in conducting such an analysis, but as we progressed the learning’s turned into improvements built into the new setup. And that made sense for many.
One of the key drivers for developing a process-oriented organisation is that you have a solid understanding of your processes, which ensures process confirmation and sets clear roles and responsibilities for the people who have an important impact on the setup.
At Solar, we have the following roles within the organisation’s process landscape:
- GPO, Group Process Owner, who is responsible for the processes on a group level. He must ensure that the processes support the group strategy and the overall targets of the group. The role of GPO is mainly held by corporate directors due to the fact that to achieve efficiency in the structure you need people with decision-making power;
- LPO, Local Process Owners, who sit in the subsidiaries of Solar. Their role is to ensure that the process is performing as agreed in the subsidiary and is following the strategy, both locally and at group level. This is a role for the local members of the management teams.
- LPS, Local Process Specialist, who makes sure that the process is performing and monitors it. This person is also responsible for improving the processes and suggesting improvement.
Of course there are other roles that make this setup work, but with regards to the issues highlighted here these three functions are the most important ones.
On a monthly basis, the GPOs have an alignment meeting during which they go through different processes and ensure that the strategic initiatives are aligned. They also share learning’s and upcoming activities. The meeting is facilitated by the process development manager who is the local counterpart of the group process manager and therefore responsible for the local alignment of the processes.
On a weekly basis the LPOs in the subsidiaries meet around the monitoring boards, which show how the processes are performing, and they look at the points that are relevant to their level in the organisation – that was the biggest learning for us: if you establish a monitoring system and you want people to care for the points you monitor, you must ensure that they are relevant to the audience and they can influence people, otherwise the initiative doesn’t add any value to the company in terms of improved process performance or customer satisfaction with the organisation. The meeting is facilitated by the process development manager who is the local counterpart of the group process manager and thereby responsible for the local alignment of the processes.
During this meeting, the LPOs also address ongoing improvements within their process and, most importantly, they address cross-process issues – for example, if we are changing a workflow to optimise O2C (order to cash), what consequences will this have on P2P (procure to pay)? This alignment is very important for the stability of our processes and our business meaning the service we provide to our customer.
The monitoring system is a visual system that is implemented before the move to the SAP template, which allows us to have a baseline before going live and thereby to protect the business (and customers) from any surprises. You can compare the monitoring system to a pipe. The flow of water inside it will be slowed down or even stopped if there are too many rocks in the pipe. The same thing happens with our system, which represents the pipe in which we need flow. To secure the flow we build in hatches to look down into the pipe to see the rocks before they become a problem.
At the beginning, the monitoring points are purely related to the performance/stability of SAP. Going forward, we change the monitoring points to business performance points to enhance the overall performance of the business.
Our business architect is also present during these meetings, his role being to overview all the improvements going on and see the “whole” landscape. This is a reminder that you need to have the right people with the right competences present.
I must admit that it took us a while to get the right people at the meetings. We were basically using a trial-and-error approach: you can sit in meeting rooms for hours trying to design structures that will work and identify the people who should be there, but my idea is to conduct experiments instead, which means starting to build the structure and see how it works. More important than anything else, you need to understand whether having these meetings creates value for the business. If it doesn’t, you have to find the root cause. If there is no momentum and drive to contribute to the meeting, you need to ask yourself why.
The other aspect that needs a lot of attention is the behavioral aspect of a structure like this. At first, we made the mistake of assuming that everybody had the ability to be part of such a system, because they were managers and had been for years. We saw that the meetings had the right data on the boards and the right people (based on their position in the organization) but the discussions and the debate we were hoping for was not there. While analysing the problem we were experiencing, we figured out that we were asking people to deal with situations they were not familiar with, which required some training and some work on their mindset. After we conducted the training, our meetings improved.
But what has this communication between different processes meant for the business? First, through this new structure, we have ensured that at Group level there is alignment between the different processes: we don’t have conflicting activities nor do we run into situations where the strategic directions aren’t aligned with the processes. This change had a positive effect on the subsidiaries, because the overall alignment is now visible at local level as well. The communication structure between processes improved our efficiency levels and the quality of our work. Sub-optimal is avoided.
At the moment, we are working on developing our lean assessment tool to be able to appraise the quality of the meetings and the overall structure of the business, to ensure that it is adding value to Solar and that we are servicing our customers in the best possible way by continuously improving our processes. In the meanwhile, we are reflecting on the current setup to learn as much as possible for the journey going forward.
Here’s what we learned so far:
- Don’t underestimate the change in mindset that a more horizontal business structure requires. Many managers will find this hard and tell you they don’t have time for this;
- Bring a lot of patience to the building up phase, like process thinking, and make sure that during the meetings the managers are open and strong enough to admit that they have a performance problem in their process;
- Managers must learn to support each other and learn from each other;
- Treat the structure carefully – it is fragile and needs a lot of support in the beginning. When you are setting it up, don’t underestimate the work that is required to stabilize and quality assure it;
- React to deviations from the standard – what was agreed and are we not sticking to? If you don’t react, you accept the situation;
- You need to know why you are doing it and make sure everyone understands it. Many people didn’t see the advantage of our new approach because they were used to “just grab one another in the hallway and align.” A clear purpose is essential.
- Don’t just work/train your managers during the meetings, but do it between the meetings to ensure that they understand the importance of the tasks that they have to solve or investigate until next meeting takes place.