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Blog 5: Division of roles: hierarchy versus the chain
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Blog 5: Division of roles: hierarchy versus the chain

Head of Production walks through the factory and wonders, “How quiet is this place? Is the sorting machine down again?” “And today an important order has to leave for a new customer.” A technical service employee happens to walk by and so Head of Production seizes her chance to speak to the technical service employee. “Do you know what’s going on with the sorting machine and do you have time to take a look at it?” The employee responds, “I need to ask my boss if I can take some time off for this. I am scheduled to install the new packing machine today.”

Positioning chain control over hierarchy

Chain control means subordinating the hierarchy (the organizational chart) to the chain. The chain is central in control in iPM, purely because practice shows that cooperation between all links in the chain leads to better results. Not only for the customer, but also for the organisation itself. By steering the chain to generate customer value and internal value, which are jointly determined and clear to every link in the chain, a unifying force and a ‘drive’ to actually work together are created. The consequence is that decisions will take place within these frameworks and that links (read departments) that make up this chain will conform to them. Sometimes this leads to a ”less result” for the department. This is not a bad thing. After all, it’s better to win a game 2-1 than to keep 0 as a defence.

Changing this mindset is one of the biggest changes during the implementation of iPM. Simply put, hierarchy becomes secondary to customer chains, but the organization will have to start thinking and working in a different way. Working from an organizational chart (hierarchy) is so ingrained in organisations, it is best to take time to implement this change and make this new way of working your own.

The first change starts with naming chain owners. Who should they be and what is their role? These questions are on the management team’s table as soon as we talk about customer chains together. First, we think it is relevant that management team members take ownership of customer chains. Customer chains are the artery of the organisation. You do not just delegate that. Of course, that does not mean that you have to be involved in every detail of decision-making as a chain owner. Instead, the role is to monitor the connection and cooperation between the links, exploit opportunities for improvement, be constantly alert to whether transfer moments are going well and the chain team is able to generate customer and internal value. It is a great role to develop the management layer below the management team in their leadership.

Chain control through performance dialogue

From our programmes, we often start with the above interpretation of the role of chain owner. From chain control, we organise chain talks in which periodically (weekly) all links in the chain meet in a performance dialogue. This performance dialogue is led by the chain owner. Through APPeL, we guide teams through this performance dialogue and the organization builds insight and learning capacity to continuously develop performance and cooperation. We will elaborate on this in follow-up blogs.

The organizational chart may of course remain. All disciplines in an organogram are relevant and it really does help to bundle employees with the same function into departments to learn the trade and develop that trade. For performance, on the other hand, we seek cooperation. After all, defence can do nothing without midfield and forwards.

The chain is responsible for effective cooperation and the chain result

Peter Geelen – iPM Partners

Budgets within customer chains

Nor does the budget necessarily have to be adjusted. In time, we see that iPM organisations will also put chains at the centre of the strategic process, as a result of which budgets will also increasingly align with the chain idea. This is logical, but certainly not a must to start chain cooperation in your organisation.

From the role ”leader of the chain dialogue”, follow-up questions about the chain owner’s mandate arise naturally. The organisation continues to develop, whereby departments are increasingly serving the chain and are responsible for the ”profession” and availability of skilled resources. The chain is responsible for effective cooperation and the chain result. Within this chain, the links (departments) are responsible for providing the right contribution and (partial) results of the department linked to the chain result. Therefore, no matrix organization arises. The chain transcends the hierarchy and the KPIs at that level are the ”connecting factor”.

The chain owner

A chain owner is a natural connector. He or she truly thinks end-to-end and believes that every link contributes to success. A key competency for this encouraging role is to be able to create an atmosphere in which collaboration and learning flourish. A collaboration where the voice of the customer is clearly heard and where participants feel invited to participate. Celebrating success together!

In large organizations, we see that the same chains are executed in multiple locations. For example, the customer chain ”providing mortgages” at a bank will be performed at multiple locations, while the bank aims to achieve synergy by performing this process (largely) in the same way. The design (set-up) and execution (operation) are then split, whereby the ownership of set-up and operation are also split. iPM has been applied in many large organizations, and setting up the right governance is a key issue here to get it to work effectively.

Now that the chains and chain owners are identified, it is important that the organization has clear tactics on how best to execute each chain. There are many grey areas in organizations, especially in transfer moments, which cause performance to lag behind. The tactics are not clear. With iPM, we solve that. That’s what our next blog is about.

The iPM implementation approach

We would like to take you along in the coming weeks with the questions and changes we encounter in practice during the implementation of iPM with our clients. Questions about the setup and organization of iPM, as well as the best implementation approach, will be addressed. The following topics will be covered:

Introduction of iPM

  1. From planning & control to iPM
  2. Ready for take-off
  3. Setting the right targets
  4. Which customer chains does my organisation have
  5. Division of roles: hierarchy versus chain
  6. Tactics of the chain in focus
  7. Customer journey versus customer
  8. How to determine the right KPIs
  9. Getting your KPIs right in 10 days
  10. Consultation structure in iPM organization
  11. Effective performance dialogue and the usefulness of BRV
  12. Leader and team development
  13. Encouragement as a style to get more out of teams
  14. iPM in complex organizations
  15. Tips for implementation

Curious? Get in touch with us!

We outline what we often see in the traditionally controlled organization and indicate what that looks like when you apply iPM. Want to know more about healthy performance management? We illustrate this with situations and examples we encounter in daily practice. Contact us and we will help your organization move forward!

Back to the overview

Winning with the right KPIs

From strategy to execution: how key performance indicators can help your business.

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