What the sales department sold and planned was implemented by the producing departments. The first implementation step took place in a department that planned the projected projects in detail.

The Organisation grows

Theprojects that the company landed became bigger and more complex every year. The planning department in Production did not grow sufficiently with this trend. It came down to the fact that the tasks at hand could only be carried out efficiently by highly specialised people with many years of professional experience.

The team focused no longer on knowledge building, knowledge transfer, and creating learning opportunities for newcomers, because of the permanent market pressure to push projects through as quickly as possible.

In the whole Organisation, this bottleneck became more and more of a problem. The Salesforce could no longer use all growth opportunities because of the existing blockage. In parallel, project- and sales managers fight for the existing resources. The managers used pressure from the top to push projects through, instead of working on structural changes.

First steps

This organisational unit’s management tried to counter the increasing market pressure by specialising the individual team members. Over the years, generalists became specialists who could hardly represent each other or support each other in detailed work.

The whole Organisation pointed now on the department’s management and criticised them, because – like football – the coach is to blame when the team fails.

Organisational change

As afirst step to change this dependency, the top management announced a radical organisational change. The “steamship” had become too big to be effective. The administrative unit upstream of the bottleneck – sales – was divided into powerful, independent units responsible for results. The bottleneck department was separated from Production and divided among the new, smaller sales units.

The view from above
From the management’s perspective, this decision solved the problem, and the expectation that it would now work is quite understandable.

The bottleneck in the adjacent area no longer existed for the sales department – they were now responsible for carrying out the project planning. Sales could directly influence how the planning people should do their job – at least they thought they could.

Production no longer had the problem because Sales was responsible for handing over all projects to carry out the projects’ execution.

A change of perspective
If one looks at this decision from a somewhat deeper flux level, it results in a completely different view.

Whereas there used to be an interface via this much called “bottleneck department”, sales now no longer access Production as “sales”, but each of the new units directly accesses the producing companies. The dependencies between sales and the producing companies have thus increased.

The old contact persons from the bottleneck department are now on one side.  In the producing units, there are now several downstream departments that are accessed directly from sales.

For Production and the other downstream departments, such as development, this means an increased coordination effort because the optimisation on one side has at the same time only shifted the “problem”, making the system slower overall.

Assuming that the new divisions’ whole change process went smoothly, the problem doesn’t exist any longer out of the sales perspective.

The significance of the overall Organisation

If we look at the system from the top-level again, the resolution between Sales and Production has shifted the problem, but the whole system has not become faster.

If we think the idea through, there are several ways for the system as a whole to manage dependencies more successfully:

  1. Perhaps a starting point is to look at the overall Organisation, to see if this functional set-up continues to make sense.
  2. Perhaps it also makes sense to think about which units need to remain functional and how they function as business units. Then negotiations are held with Production and development as with suppliers. The criterion for decisions is the economic efficiency for each area.
  3. Perhaps we should think about approaching external partners where the new bottlenecks are now emerging and completely rethink project management.

No matter which path the company under consideration will take, the first quickstep has successfully disturbed the system. It could not be the last step when the company wants to stay successful in the future.