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PROCESS DRIVEN MANAGEMENT STRUCTURE
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PROCESS DRIVEN MANAGEMENT STRUCTURE

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Process driven management structure is a structure which does not contain any roles with hierarchical powers not required to ensure efficiency of business processes. That is because an organization …

Process driven management structure is a structure which does not contain any roles with hierarchical powers not required to ensure efficiency of business processes. That is because an organization does not operate as a three dimensional confederation of organization units but rather as a perfectly flat two dimensional network of flows of business processes.
More often than we realize, inefficient operations are not caused by bad business process design but rather by the management structure (hierarchy) which is imposing unwarranted blockages onto business processes at numerous hierarchical check points on the borders between organization units and legal entities.

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  • 1. INTRODUCING PROCESS DRIVEN MANAGEMENT STRUCTURE from Managing Organization Units to Managing Business Processes Branko Greganovič, Managing Partner Ljubljana, June 2010 © 2010 Strateks - Change Leadership
  • 2. Structure drives performance! Different people in the same structure tend to produce qualitatively similar results. When there are problems, or performance fails to live up to what is intended, it is easy to find someone or something to blame. But, more often than we realize, systems cause their own crises, not external forces or individuals’ mistakes. PETER M. SENGE, THE FIFTH DISCIPLNE (Currency, 1990) branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership 2
  • 3. Two dimensions of an organization structure Management structure (hierarchy) Network of flows of business processes branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership
  • 4. Premise Analysis Conclusion Recommendation Word of Caution Implementation
  • 5. PREMISE More often than we realize, inefficient operations are not caused by bad business process design but rather by blockages artificially imposed onto business processes by the management structure (hierarchy) at the numerous and multi- directional borders between organization units
  • 6. ANALYSIS A business operates as a two-dimensional network of business processes … a day-to-day business does not operate as a “confederation of organization units” but rather as a perfectly flat two dimensional network of flows of business processes … branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership
  • 7. ANALYSIS Business processes do not recognize borders between organization units, e.g. legal entities, business functions, countries, etc. branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership
  • 8. CONCLUSION Inefficient operations are not caused by bad business process design but rather by blockages artificially imposed onto business processes with the management structure (hierarchy) at the borders between organization units Border between legal entities Border between Border between countries countries Border between functions Border between functions Border between countries Blockages not required by the nature of a business process but rather imposed artificially Border between by the hiearchical structure legal entities branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership
  • 9. RECOMMENDATION Align management structure with flows of underlying business processes and move away from managing organization units towards managing business processes Hierarchy driven management structure Process driven management structure is is based on a culture of managing based on a culture of managing business organization units processes branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership
  • 10. EXECUTION Three steps of alignment of management structure with an underlying network of business process flows #1 Aligning the top management structure #2 Aligning lower levels of management structure #3 Re-engineer business processes and adjust the legal structure of an enterprise branko.greganovic@strateks.biz 10 © 2010 Strateks - Change Leadership
  • 11. EXECUTION Aligning the top management structure is the most important step of the reorganization process Top management structure Lower levels of hierarchical structure Network of business processes branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership
  • 12. WORD OF CAUTION Initiatives to improve / re-engineer business processes which are integrated into a non-aligned management structure will be suffocated by the management structure refusing to change. Management structure Business process re- not aligned with engineering business processes NON-ALIGNED MANAGEMENT STRUCTURE FIGHTS BACK TO PREVENT CHANGES IN BUSINESS PROCESSES branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership
  • 13. HIGH LEVEL PROJECT PLAN The process of aligning the top management structure 1. High level 5. 2. Prototype of 3. Iterative analysis of 4. Final version Implementation the top development business of management of the new top management of management portfolio and structure management structure structure processes? structure • Draft Strateks • Strateks develops a draft • Workshop • Communi- • Review management structure to be with the cation • Workshop with reviewed Board • Training the Board • Introduction 13 branko.greganovic@strateks.biz © 2010 Strateks - Change Leadership
  • 14. Thank you for your time and attention Process driven management structures Mergers and acquisitions Business strategy design and execution Business and financial restructuring Profit improvement initiatives Branko Greganovič, Managing Partner branko.greganovic@strateks.biz Mobile phone: + 386 31 378 687 © 2010 Strateks – Change Leadership

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