Fractal presentation for the meet up

Copyright © A Holm & J Wilson
All Rights Reserved
CREATING A SELF MANAGING
ORGANISATION
Andrew Holm (andrew@mattblacksystems.com)
THE FRACTAL
®

All Rights Reserved
THE FRACTAL
®
Context
1
My Position Industry Competitor
Evolution
Migration Industry
Survived (Y/N)
Company
Survived (Y/N)
Electrical Design
Engineer
Shipbuilding Increase - Global
(mainly Asia)
To Korea No Yes
Project Manager Water Increase -Global
(mainly India)
To India No Yes
Commercial Director Electrical
Cables
Increase -Regional
(mainly European)
To Eastern
Europe
No Yes (the only one!)
Statutory Director Aerospace
(GSE)
Global To USA No No
Statutory Director Aerospace
(Cockpit)
Global To China No Yes (only two left!)
I was the runt of
the family

All Rights Reserved
THE FRACTAL
®
It Wasn’t a Great Journey
Executives had big offices and
fruit in the fruit bowl – ‘bring
me solutions not problems’
‘Team’ was an
illusion –
internecine war
was the norm?
The management
were clueless &
out of touch
I was fearful,
stressed, angry
& upset
Compliance to the
system was more
important than doing
the job right (I was
considered a loose
canon)
I felt like a slave.
Other people
had control of
my future
In-order to do better for
myself I had to climb the
ladder away from Value
Add to Non-value add
I was engaged in a sea
of disengagement
I was robbed
of my success
& blamed for
other peoples
failures
The company
could be hugely
successful without
the internal &
external
intermediaries

All Rights Reserved
THE FRACTAL
®
What I Saw
10 100
I mapped the whole internal &
external supply chain. I calculated
that management & bureaucracy
accounted for up to 50% of the Costs
in the whole supply chain
And Gary Hamel
agrees with me.

All Rights Reserved
THE FRACTAL
®
Disintermediate Or Die
Disintermediate internally and
externally i.e. remove the people that
did not directly touch the product,
service or customer.
Get every person in the supply
chain to add value.
GET RID OF THE WASTE!

All Rights Reserved
THE FRACTAL
®
I Joined My Business Partner In 2001
3
Julian
• Designer (engineering)
• Councillor (humanities)
• Great Analyst (detail)
Andrew
Designer (engineering)
Systems Thinker (economics)
Great Synthesist (big picture)

All Rights Reserved
THE FRACTAL
®
The Business Started With An Engaged
Individual with Purpose
1
Person has:
• PURPOSE (intent)
• SELF-CONTROL to ensure achievement of purpose
• FIDELITY to own purpose
• SELF-DISCIPLINE to realise purpose
• SELF-AWARENESS to recognise deviation from purpose
• DRIVE to rectify deviations from purpose

All Rights Reserved
THE FRACTAL
®
The business grew (on the back of their
engagement)
Decision
Functionalise Fractalise
 
Franchise

2
Purchasing
Upper Management
Sales Design Accounts QualityManu-
facture
Logistics
Process Process Process ProcessProcessProcess
This is always
the way!!

All Rights Reserved
THE FRACTAL
®
But it lead to
failure
It was change
or close
4
THE FRACTAL
®

All Rights Reserved
THE FRACTAL
®
We Had Great Ideas
Change
Customers?
Introduce more
management?
Enhance
QMS?
Address Wider
cultural Norms?
Address
Company
Culture?
Change
Suppliers?
New ERP?
Introduce
Automation?
Implement
Lean?
Implement
AgileTraining?

All Rights Reserved
THE FRACTAL
®
21 People Turnover £1.3m21 People Turnover £1.3m
And a Scientific Approach
5
Quality
Customer returns
Quality
Customer returns
Profitability
Return of total labilities
Profitability
Delivery
On time and in full
Delivery
On time and in full
Conformance
To statutory, regulatory
and contractual
requirements
Control
To statutory, regulatory
and contractual
requirements
A JOURNEY OF 100 MISTAKES OVER 10 YEARS
The metrics used to determine success (or failure) are
established. From the start these are measured monthly

All Rights Reserved
THE FRACTAL
®
We Tried Our Great Ideas!
Quality
Customer returns
Quality = Unknown
Customer returns
Quality
Customer returns
Delivery = 17%
On time and in full
Quality
Customer returns
Profitability = 15%
Quality
Customer returns
Conformance =
Unknown
To statutory, regulatory and
contractual requirements
6
What We Actually Did Approx. Cost
(£k)
QDPC Impact
(* = little, *** =lots)
New IT £20k *
Automation £40k *
Lean Consultants £20k *
Training & mentoring £25k *
Change trading partners £10k *
Sales Focus (1 additional person) £30k *
Change BMS £5k *
Increase management (4) - to
break contractual power of staff
£100k *
Change employees £20k *
Total £270k We Ran Out Of Cash

All Rights Reserved
THE FRACTAL
®
We Just Could Not Make It Work?
6
The Pendulum Always
Swung Back To The
Sweet Spot when a
project finished?

All Rights Reserved
THE FRACTAL
®
We Wanted This
3
Purchasing
Command & Control
Sales Design Accounts QualityManu-
facture
Logistics
Activity
&
Resources
Activity
&
Resources
Activity
&
Resources
Activity
&
Resources
Activity
&
Resources
Activity
&
Resources
Management
Conform & Comply
Check & Correct
We needed the
benefits but
without the
management cost?
Without this
(David
Marquet
Turn The
Ship round)

All Rights Reserved
THE FRACTAL
®
One Last Throw of the Dice?
6
What We Actually Did Approx. Cost
(£k)
QDPC Impact
(* = little, *** =lots)
Change to Cell Structure £5k ***
Change Rule Set (overtime) £1k ***
Total £6k It worked
The pendulum swung
back to a different
position. We had
changed the sweet spot!!
Change rules
e.g. overtime?
Change Structure
e.g. cell?

All Rights Reserved
THE FRACTAL
®
We SPLIT
Quality
Customer returns
Quality = 85%
Customer returns
Quality
Customer returns
Delivery = 35%
On time and in full
Quality
Customer returns
Profitability = 5%
Quality
Customer returns
Conformance = 72%
V.C’s Do: Manufacture, Purchasing & Logistics
Manager
Sales Design Accounts Quality
7
30 People

All Rights Reserved
THE FRACTAL
®
We PROCESSISED
6
We mapped all the Value
Added ACTIVITIES (verbs)
& RESOURCES (nouns)
We mapped all the Non Value
Added ACTIVITIES (verbs) &
RESOURCES (nouns)
We distinguished all
the generic
requirements that
the business must
meet
• Statutory
• Regulatory

All Rights Reserved
THE FRACTAL
®
We PASSED DOWN
Quality
Customer returns
Quality = 93%
Customer returns
Quality
Customer returns
Delivery = 78%
On time and in full
Quality
Customer returns
Profitability = 23%
Quality
Customer returns
Conformance = 77%
16 People
9
We integrated all the RESOURCES &
ACTIVITIES into each Virtual Company

All Rights Reserved
THE FRACTAL
®
We AUTOMATED
9
We automated the
processes to make them
user configurable & slick

All Rights Reserved
THE FRACTAL
®
We REVIEWED
10
Quality
Customer returns
Quality = 93%
Customer returns
Quality
Customer returns
Delivery = 78%
On time and in full
Quality
Customer returns
Profitability = 23%
Quality
Customer returns
Conformance = 77%

All Rights Reserved
THE FRACTAL
®
We REPEATED The Cycle

All Rights Reserved
THE FRACTAL
®
We Arrived Here
Virtual Companies Do: Manufacture, Purchasing, Logistics, Quality, Sales,
Accounts, Design & Strategy
Quality
Customer returns
Quality = 99%
Customer returns
Quality
Customer returns
Delivery = 98%
On time and in full
Quality
Customer returns
Profitability = 27%
Quality
Customer returns
Conformance = 92%
10 People Turnover £2.1m
10
Statutory Company
Virtual
Company
Virtual
Company
Virtual
Company
Virtual
Company






















 












Each person in a
Virtual Company
All transactions via formal
contract (automated)



All Rights Reserved
THE FRACTAL
®
There is
nowhere to
hide and work
becomes much
more like our
lives at home...
11
THE FRACTAL
®

All Rights Reserved
THE FRACTAL
®
At Home
12
No functions or hierarchy
Do all activities
No extrinsic control and command
We’re fully engaged, we make
decisions and suffer consequences
or get the benefits
Own or borrow everything
Control all of the resources
We manage
ourselves

All Rights Reserved
THE FRACTAL
®
13
Imagination (looking forward)
Creativity (problem solving)
Curiosity (gaining knowledge)
Realisation (making things happen)
Self-discipline (process following)
Cooperation (working together)
At Work
We are
managed

All Rights Reserved
THE FRACTAL
®
The Informal (home) & Formal (work)
Management Structures Were In Conflict!
1
Command & Control
Catalogue & Communicate
Conform &
Comply
Check & Correct
The Informal (home)
Management Machine &
The Formal Management
Machine Are In Conflict.

All Rights Reserved
THE FRACTAL
®
Value Adders Didn’t Generate Enough Excess
To Pay For The Structure To Manage Them
Person has:
Legislature
Executive
Judiciary
• DRIVE to rectify deviation from Purpose
Command & Control
Catalogue & Communicate
Conform & Comply
Check & Correct
Price = £100
Cost = 50
Cost = 20
Cost = 20
Cost = 20

All Rights Reserved
THE FRACTAL
®
We Could Afford This!
1
Person has:
• DRIVE to rectify deviation from Purpose
We went back to
where the journey
started
We proved the formal
management is double
handling and is a WASTE

All Rights Reserved
THE FRACTAL
®
We Changed Our Structure From Traffic Light to
Roundabout
19
People must decide for
themselves at a roundabout
People do as they are
told at the traffic lights
A paradigm of loyalty & obedience A paradigm of self expression & power

All Rights Reserved
THE FRACTAL
®
People Were On A Journey of Growth
2 - Pre Follower
3 - Follower
4 - Changer
5 - Creator
1 - Starter
0 - Drifter
Disposition
(level)
Description
Drifter (0) Is not engaged in process
Specialiser (1) Specialises in part of a formal process
Starter (1)
Does not use a formal process; relies on
informal instructions
Pre-follower (2) Given an existing process
Follower (3) Adopts a formal process
Changer (4) Amends an adopted formal process
Creator (5) Creates a formal process
22

All Rights Reserved
THE FRACTAL
®
What it can achieve:
 Customer perception from poor to outstanding
 Productivity up 300%
 Profits up 10%
 On-time and in full delivery greater than 96%
 Pay up 100%
 Low waste and managerial costs
 High employee engagement
 Highly innovative, flexible and scalable
 Still contains efficient controls and measures
26

All Rights Reserved
THE FRACTAL
®
What do the founders/directors do?
Money at a
competitive rate
Space to work at
a competitive
rate
Business model
/ IT
Knowledge &
coaching
Supplier of value add services to
the Virtual Companies
27

All Rights Reserved
THE FRACTAL
®
If you are facing the same business growth or survival challenges:
Contact: andrew@mattblacksystems.com
fractalwork.com
28
Self Management
14,200 hits per
month just in the UK

Fractal presentation for the meet up

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (18)

Similar to Fractal presentation for the meet up

Similar to Fractal presentation for the meet up (20)

Recently uploaded

Recently uploaded (20)

Fractal presentation for the meet up