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.

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