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Home > Operations Management Best Practice > Designing Corporate Systems for Success

Operations Management Best Practice

Designing Corporate Systems for Success

by Leslie L. Kossoff

Executive Summary

  • Organizational systems, their policies, procedures, rules, and instructions can and should be designed to promote the limitless success of the organization.

  • Management owns the systems, and only they can ensure that the systems are designed to assist everyone in creating success.

  • By establishing an ongoing internal and external dialog, management can create an organization that never rests on its laurels and is designed to succeed.

Introduction

In best-of-breed organizations, no matter what industry or sector, the two questions everyone always asks are: “What more?” and “What else?” Then they go there—no matter where “there” is. Because they can. Because they have designed their management and decision-making systems—from personnel and payroll to IT and R&D—to ensure that the organization and everyone in it is set up to succeed.

Assessing the Impact of Organizational Systems

One of the single largest, most consistent management oversights is not understanding that the corporate and organizational systems—those written and unwritten policies, procedures, and instructions to which everyone operates—are a crucial part of the strategic and operational plan of the enterprise. Very simply, if your corporate systems are not designed, implemented, and consistently reviewed and enforced with your organizational strategy in mind, then you’re guaranteed to put unnecessary obstacles in your own way.

Corporate systems, in and of themselves, seem harmless. They provide guidance on everything from compensation, vacation, attendance, and retirement programs to supplier and customer relation systems, product and service policies, and procedures and more.

The intent of the systems is positive. They’re there to protect the organization and its employees from harm and to ensure as fair and positive a workplace as possible. The problem is that they develop in a patchwork over time—usually in response to a particular need or problem of the day which may or may not exist any longer. But the system continues to exist—and it has little or no connection with the strategic direction and needs of the enterprise today.

By stepping back and reviewing your systems from a strategic perspective, you’ll be able to identify quickly those systems that are working toward your goals—and which are not. It’s easy. Simply ask yourself: How does this policy/procedure/instruction help us to achieve our strategic goals, vision, and mission? If you can identify how—and clearly see that its implementation is consistent with that goal—then keep it. If not, there’s your opportunity for positive change. And when you make that change you’ll have created a direct line to new worlds of innovation and profit increases.

Techniques for Improving Corporate Systems

Improving corporate systems is no different from improving any other aspect of the enterprise. It begins with an assessment, leading to specific actions that remove obstacles and create new opportunities. Where the difference appears is in the far-reaching outcomes of seemingly simple improvements. Remember, these are systems—not just single actions. Each time you make a change you’re creating a ripple effect that positively impacts everyone within and outside the enterprise. That makes systems improvement all the more exciting and satisfying to pursue.

Understand the Impact of Organizational Systems

To understand how your corporate systems are impacting the organizational systems, you first need to put the systems in context. That means that, before you look at what you want to change, you first have to take an overarching look at the enterprise. Whether you are the most senior executive, a small business entrepreneur, or a member of a management team, you need to take an objective look at what you are responsible for—in effect the part of the organization you own—then ask yourself: Is the organization operating the way I want it to? Are we, in fact, designed to succeed? Once you take that objective look and give yourself an honest answer, you’re ready to take on the corporate systems that are affecting your ability to succeed.

From that point, the next questions are:

  • Which policies, procedures, rules, regulations, and instructions within the organizational systems infrastructure support the organization’s strategic goals? Which do not?

  • Which systems cannot be changed, for example, because of law or government regulation?

  • Of those systems that can be changed, what must we do to make sure that the systems that direct and drive the organization are designed to help us succeed?

  • Which systems have been unintentionally imposed or supported and can now be let go?

Once you have the answers to those questions, you’re ready to move toward active improvement—and you have a good head start on how to achieve it quickly, painlessly, and profitably.

Align Your Systems with Your Strategy

Once you’ve identified the systems to which you’re working, assess how each is helping—or hindering—the strategic goals of the organization. Just as you tie your strategic plan to operational and execution plans, slot the systems into place within that larger context. If the systems aren’t working toward your goals, they need to be changed. If they are imposed by law or government regulation, find out whether your interpretation is correct and if there’s any way to maneuver within those laws and regulations to give you more room to succeed.

Review Your Metrics

Take a close look at how your organization is measured. Look at the metrics used internally and externally. Each of the corporate systems is tied to a measure—whether you know it, like it, or not. As you identify the systems to which the organization operates, you should also be able to identify the specific measures impacted by those systems. Whether the measures are internally designed and driven or the types that analysts use when assessing publicly held companies, each system has a measurable—and financial—impact. So, as you review your metrics, also take a look at the costs attached. That, too, will drive your decisions regarding the priority order of the systems change process.

Create an Active Systems Redesign Process

Once you know where to put your attention, create an ongoing system that reviews the systems in place and continually assesses whether they are serving the best interests of your organization—whether by function or for the overall enterprise. With each review of the strategy, incorporate a review of the systems and their progress toward improvement or dissolution. Make sure that your customer and supplier data are incorporated into this process as well. They, too, account for a great deal of your success—financial and otherwise.

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Further reading

Books:

  • Collins, Jim. Good to Great: Why Some Companies Make the Leap…and Others Don’t. New York: HarperBusiness, 2001.
  • Drucker, Peter F. Management Challenges for the 21st Century. New York: HarperBusiness, 1999.
  • Juran, J. M. Juran on Leadership for Quality: An Executive Handbook. New York: Free Press, 1989.

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