In the last decades, technological advance has changed the world. If we take year 1992 as reference, globalization, together with the ICT (information and communication technologies) shows a very different picture. Companies barely known at the time, or some that did not even exist, are today benchmarks in the economic world: Apple, Google, Amazon, Facebook, Uber, Airbnb, Inditex, etc. In addition, other smaller and lesser-known organizations have also become benchmarks in their sectors.
These companies have managed to be role models in their markets by introducing more advanced ways of developing their businesses (business models and strategies) compared with the previous ones. The use and development of the new technological world is a constant in all these companies. Other sectors, such as the entertainment industry (television, cinema, music, video, games…), journalism and communication, banking, etc. are immersed in a deep transformation.
However, the organizational ways of most national and regional governments and some more traditional economic sectors have hardly changed. Their organizational systems have barely evolved, despite using new technologies as well, and it seems that the clear majority of them, and other organizations, are not able to follow, nor regulate, a brand-new technological world, up to a certain point, to their surprise.
Social discontent, the appearance of the so-called populist political groups from the right and left wings and the economic bubbles with their crises, are symptoms that the traditional organizational systems, both public and from private organizations profit and no-profit, have not been able to, have not wanted to, nor known, surely, to manage globalization and technological advancement.
WITORG provides a guide to reflect on organizational systems. Organizations develop in a Darwinian way, or at least it has been so up to the current status of people’s collective maturity. Each organization considers a form of government to live, survive, evolve and compete within an environment. Therefore, organizational systems are a necessary part in the development of organizations.
Organizational systems evolve to adapt to new realities. Usually, an organizational system will be, to some extent, somewhat out of sync with the new realities that arise. This is due to the need to deal with unknown elements, or not so unknown, that arise by surprise or derive from changes in any environment. This fact implies being quite often out of step with a changing reality. Although sometimes, some organizations can anticipate changes and anticipate them in terms of both their business model and their organizational system.
Reflecting through the guide on any organizational system, can bring up ideas to evolve it. Evolving the organizational system should aim to improve the adaptive and survival capacities to the environment, understanding these concepts in a positive way.
Outline of the WITORG Guide
Organizations consider a business model that generates value and goals or targets to be achieved. The way to lay out the organizational system is key to evolve the business model and to achieve the goals or targets. There are different options when considering an organizational system for each organization. Once decided, it conditions the way people operate in it and the achievement of targets and goals.
An organizational system can evolve if there is a will to do so. However, once certain bases or conditions have been established within the internal element of the guide ‘100. Essence of an Organizational System’, as it will be seen, it will be more or less simple or complex to make it evolve.
The WITORG Guide aims to be a tool for analysis and reflection on organizational systems. Several related elements coexist within them. The content has been structured in ten elements, as seen in the outline shown in the image below. The objective is to be able to carry out an analysis on any organizational system.
The ten elements of the WITORG Guide are divided into two categories: internal elements and external elements. All of them are connected to each other:
Internal elements of an organization:
- 100. Essence of an organizational system
- 200. Continuous improvement
- 300.Process management
- 400. KPI and targets
- 500. Project management
- 600. Teams of people
External elements of an organization:
- A. Organizational characteristics
- B. Quality systems
- C. Systems
- D. People and environmental circumstances
The internal elements of the WITORG Guide (100, 200, 300, 400, 500 and 600) belong to the organizational system itself. They are chosen by the people in general or some in particular in the organization. Making these internal elements evolve depends on the people of the organization or part of them.
The four external elements of the WITORG Guide are influences or elements external to it and which condition it to a certain extent. The external influences, represented by points A and D, condition the organizational systems to some extent. The external elements, B and C, are elements that begin to be part of an organization when it decides to incorporate them. From now on, we will call A, B, C and D external elements of the WITORG Guide.
One of the objectives of the WITORG Guide is to reflect on the organizational systems and, based on this reflection, to consider how they can evolve. Therefore, any contribution or suggestion for the evolution of the WITORG Guide itself will be welcome.
Once the outline of the WITORG Guide is presented, we summarize each element of it:
Internal elements of the WITORG Guide
100. Essence of an organizational system
This section presents concepts such as vision, mission, real values, CEO and owners’ commitment, sector, Taylorism versus holacracy, knowledge needs, etc. The development of these concepts for a specific organization generates the organizational ESSENCE of the organization.
Each organizational system is unique, although there are always models or patterns on which to rely. The external elements A and D present generalities of a changing world that condition this internal element (100) of the organizations. Once the elements of A, D and 100 have been considered and understood, the construction of the internal elements of the guide 200, 300, 400, 500, 600 is simplified. On the other hand, B and C are elements to be introduced into an organizational system at a given moment in time. B and C, once selected and introduced within a specific organizational system, will work as support or guide for the elements 200, 300, 400, 500, 600.
Each organization requires its own organizational system. Many elements are combined to make it unique from another, as each of them is formed with various elements, for example, different people. This does not imply that organizational systems do not share the same elements and that it is not possible to learn and apply concepts already used by other organizations, however, the combination of its own elements will make it unique. Therefore, it is important to highlight the importance of the essence of an organization.
200. Continuous improvement
This internal element describes continuous improvement as the ability of an organization to adapt to changes within the environment in which it operates, or to new environments where it intends to operate. An organization could even evolve and change the rules of the game of the environment where it operates (disruptive improvement, disruptive innovation), or of other environments where it did not previously operate, always with adapting and surviving as an objective.
DISRUPTIVE IMPROVEMENT or DISRUPTIVE INNOVATION can mean that an organization A may become a market leader. At the same time, there may be other organizations competing and presenting other options that equal or surpass the valued proposal of organization A. Hence the importance of considering this type of improvement part of the continuous improvement, knowing that a disruptive improvement or innovation will require later evolution.
Many organizations disappeared in the past. An organization sets objectives and targets, although not achieving them does not mean disappearing. The objectives and targets cannot always be achieved, due to environmental hindrances or because of a poor internal approach of the organization itself. The organizational system is a key element to set goals and targets and reach them. But, in an organizational system, it may be more important (even if this is basic) being able to detect elements that can prevent it from fulfilling the objectives and targets and act on them, than achieving the goals. That is the importance of continuous improvement in its survival aspect.
Continuous improvement is an organizational attitude where people in an organization observe, detect and try to find opportunities for improvement regarding themselves, the sector, the competition and the environment in general. How to create an organizational system focused on continuous improvement depends on the organization itself.
Firstly, for this, it is necessary to analyze elements A, D and 100 of the WITORG Guide. Secondly, point 200 should be reflected on. As a third step, it is recommended to analyze how an organizational system is proposed through the elements 300, 400, 500, 600 and reflect on the philosophies, concepts, methodologies and tools implemented described in the external elements of the guide: B and C.
It is necessary to emphasize again that continuous improvement must be an attitude of seeking opportunities and the ability to adapt or anticipate environmental changes. And all this arranged, to a certain extent, in the organizational system.
300. Process management
Process management requires a definition of these processes within an organization. Despite being a highly developed and documented topic within the organizational systems, we often come across cases where the functional department of an organization’s organizational chart is associated with a management process. Anyone who has worked with the group of ISO 9000 or EFQM standards, when the organizational structure has a Taylorian base, often find that management processes, represented on a map, are functional departments. This is something common and it is recommended to revise it, as it can mean a great opportunity for improvement.
This does not imply that the operation of a department cannot be regarded as a management process, however, a department is normally part of a higher entity and its objectives may be contradictory to the higher entity’s. The local optimum does not always, usually seldom, lead to a global optimum.
400. KPI and targets
KPIs, or management indicators, show the performance of the management processes of an organization. KPIs can also reveal the evolution of external elements of the organization. So an organization, in the comparison of internal KPIs, with marked targets, or with external KPIs, will obtain its conclusions regarding the achievement of goals.
It must be noted that not by measuring improvement is achieved, in fact, there is a popular saying in the organizational world: “paralysis due to analysis”. In some organizations, a lot of analysis is carried out, however, there is no rapid response capacity when KPIs indicate a risk situation or negative performance. Hence the importance of point ‘200. continuous improvement‘.
The belligerence of the KPIs is an important factor in the improvement management. When something anomalous, interesting or is harmful is detected, how does the organization work through its organizational system? Have the courses of action been defined in the internal element 300 of the guide?
It is also worth mentioning the importance of the philosophy and tools available in external elements B and C, to facilitate the management of KPIs. Currently, technology, point C, allows rapid measurement, in addition to arranging information to learn and introduce constant changes of adaptation and improvement. Real-time information, external and internal big data of an organization and the concept industry 4.0 are realities that will continue to evolve.
500. Project management
What is a project? In WITORG, the projects are a series of activities and resources organized in a limited time, which RESPOND to a need for IMPROVEMENT, ADAPTATION or CONTAINMENT in an organization. Here are some examples:
- R & D & I projects, which arise as a need to improve the existing.
- Projects to try to satisfy a new or already detected in the past market need.
- Modification of a management process.
- Evolution of the process management map.
- Implement KPI in real time.
- A major breakdown.
- Development of suppliers or change of suppliers.
- New collaborative relationships with external entities.
- Actions necessary to respond to a non-compliance communicated by a client.
- Request for modifications by a client.
- Detection of an internal non-conformity (INC) within the organization and approach of a project to evolve, for example, a management process, a product…
- A request for quotation from an existing or new customer.
- A development of a new product, manufacturing process or service.
- A civil work.
- Actions necessary to respond to a significant deviation of a KPI from its target.
- New customer requirements.
- New administration requirements.
- Evolution of the organizational system to adapt it to new needs.
- Others.
This type of projects, if the organization was created to survive through time, will be launched to adapt to the environment and continue to survive. Internal element 500 reflects on project management itself. However, it should not be forgotten that the act of launching projects has its true origin in internal element 200.
If the list of project examples is reviewed, the following conclusions can be reached:
- Projects are both expected and unexpected.
- Projects are of great or small scope, both in terms of resources and times.
- Projects, depending on their origin, are managed using different jargons.
- Several projects can share the same people.
- Several projects can be developed at the same time.
In many organizations, there is a sense of needing to undertake more projects than its people and resources can handle. How is the management of these projects organized if they are unexpected, if they can have different jargons, if they share people and if there is a feeling that there are more projects to undertake than resources? Does the organization have an organizational system for this? Can all the projects be undertaken in the required times?
These are difficult questions to answer. However, the execution of the projects is a fundamental part for the application of internal element 200, as the CAPACITY of an organization to adapt or, even, to anticipate today’s changing environments.
The types of projects shown in this point are a normal reality in many organizations. Although some people see them as a new burden to add to the day-to-day routines, they require teams of people with various organizational functions that involve uncertainty and can generate stress.
If the circumstances are to be maintained and if the current changing realities require capacity to adapt to the environment as an element of continuous improvement, it will be necessary for the organizational system to consider project management as one of its pillars. This aspect will be deepened in point 500.
600. Teams of people
It is the people who, even if to a different extent and according to the capacity of influence of each individual, create the organizational systems. People in an organization operate and relate to each other through the organizational system and will also evolve it over time.
Although this point is the last of the internal elements of the WITORG Guide in terms of numbering and position in the graph, the importance of the people in the creation of the organizational system and its subsequent evolution is clear. Or at least part of the people or certain interest groups, depending on each organization.
Perhaps the internal element 600 of the WITORG Guide should have been inserted between 100 and 200, since the people of an organization are the developers of points 200, 300, 400 and 500. Although this will also depend on how it is proposed from point 100 their participation in the design and implementation of the organizational system.
The following topics are discussed in internal element 600:
- The ESSENCE of the organization described in point 100 creates conditions that influence the way people interact in the organization.
- People’s perception about the organization in which they work and their contribution to the organizational system.
- Interest groups.
- Factor-3 (POWER, KNOWING, WANTING (Attitude)).
- People’s training.
- Teamwork.
External elements of the WITORG Guide (organizational system)
A. Organizational characteristics
This external element will consider those environmental aspects of an organization that influence it. In today’s changing environments, organizations need to pay attention to the design and evolution of their organizational system in order to survive.
Nowadays, both in the environment close to an organization and in a globalized world, there are realities such as environmental sustainability, shortage of resources, changes of regional, national and supranational governments, general discontent with political systems and forms of government., changes in regulations, public debt, immigration, etc. that present an uncertain as well as disturbing outlook.
In addition, in some sectors, the new technological world has brought great changes in its business models and new players. In industries or more traditional sectors is also sensed that the new technological world will cause important changes, due to new business models, the development of new materials or new manufacturing processes. These new realities force organizations to find their survival through continuous improvement. For this, they must reflect on whether their forms of government and their organizational systems are adequate.
B. Quality systems
Quality systems (standards or models ISO 9000, TQM, EFQM, QMS …) are management models originally emerged from the standardization and quality control world. They have evolved and are now called “management systems”, “quality systems”, etc. These models were created for various industrial sectors. Subsequently, their use was transferred to other sectors, both industrial and non-industrial. They are currently common in many organizations and sectors.
These models have helped improve organizational systems. Thanks to them, a lot of organizations speak the same jargon when it comes to meeting the requirements of these standards. Today, operating without these models’ jargon or language is unthinkable.
These models date back several decades and, despite their revisions and updates, key essential aspects of how organizations were understood when they were created cannot be deduced. In addition, in the last thirty years, technological advance has brought up new business models, important changes in the ways of interaction, communication and information management.
In traditional and non-traditional organizations these systems share “common evils” or contraindications such as the following:
- Once the process and procedure maps are established, any change in them is complex to undertake.
- Some organizations fail to keep their system up-to-date after the moment when certification was achieved. This implies that the weeks or months prior to a new certification, people related to the system will have to perform updating tasks. This rework may involve the use of significant amounts of both economic and human resources. And here comes a question: what does a system that is only updated to pass a certification provide?
- GM and PSA, for example, have launched another certification for themselves and for their suppliers called QSB, because passing an audit and getting certified in ISO 9001 or IATF-16949 does not guarantee that a manufacturing plant is being managed in compliance with the minimum requirements demanded by GM and PSA.
- In the audits, the organization’s quality manager accompanies the auditor during the review of the compliance with the standard in all the management processes defined in the process map, due to distrust that the manager of any management process may do it properly.
- Management processes in the process map are departments.
- Two organizations certified in an ISO standard, from the same sector, same product, and with the same manufacturing process may have nothing to do in their organizational systems, in terms of the design of their management processes. The same occurs in the approaches to continuous improvement, accessibility to information and the relationship with people within the organization.
- Any other the reader wants to add.
Quality standards are elements external to an organization. At a certain time, on an organization’s initiative or as a sector’s or customer’s demand, it is decided to work to meet their requirements and even an external body certifies that these are met. Before deciding to be certified, organizations already have an organizational system. So, the question that arises is:
Did the organizational system prior to the decision to work under a standard already meet its requirements (beyond formal changes)?
WITORG Guide offers a tool for reflection on organizational systems. Always without forgetting that the organizational system is unique, designed by the organization itself and that defends HOW they want to work to achieve the objectives or targets. Fulfilling a standard/system and becoming certified is a consequence of the organizational system’s approach.
WITORG Guide stresses the importance of considering quality systems (TQM, QMS, ISO 9000 and derivatives) as external elements to the organizational system for a specific organization. Each organization needs its own form of government and applicable for itself. Influences and external references can improve an organizational system, but, at the same time, they can blur the real organizational needs as well. Introducing external references that do not add value to the government system, and that sometimes even involve an unnecessary burden of work, makes the system itself worsen. This fact influences and affects the organizational system itself, but not the external quality systems, as they are conceptual and not real elements until they are introduced in a concrete and real system case.
C. Systems
This section includes a wide variety of aspects such as software, hardware, communications, tools, methodologies and philosophies introduced in the organizational system for it operation.
It also includes concepts such as ERP, databases, PDM, PLM, CRM, lean manufacturing, VSM, JIT, Kanban, MRP, industry 4.0, automation pyramid, office IT, CAD / CAM, ICT, internet and many other concepts used within the organizational systems.
Elements B and C are introduced into an organization at a given time. They were not there, and, after an organization’s decision, they begin to be part of it and evolve with it. Hence the concept of external element to an organizational system.
These practices and their associated tools make an organizational system evolve, although not always in a positive way. The implementation of these concepts is programmed to evolve a system in a positive way. However, and quite often, it is observed how people in an organization blame the evils of an organizational system on concepts from element C. In this section, we will try to reflect on how the implementation of these C external concepts is focused on the reality of an organizational system.
D. People and environmental circumstances
With this external element we intend to reflect on the following items:
- How people, influenced by an environment, perceive the organizations where they work or would like to work.
- How organizations, observing and inhabiting complex environments, prepare to be attractive to inside people or new people to be hired.
In the organizations’ environment, and sometimes within them, there is a broad jargon of concepts related to people. Some of these are: GTD, coaching, mentoring, self-starter, entrepreneur, personal branding, networking, millennials, holacracy, how to be a super-professional, teamwork, self-managed teams, matrix structures, continuous training, Taylorism, organizational chart, performance evaluation, deployment of objectives, entrepreneurship, empathy, proactivity, commitment and a long etc.
The concepts in the paragraph above are taken to the organizations at a certain time in a certain way and with some final intention. The implementation of any of them will evolve the organizational system, although the objective pursued will not always be achieved.
The people, or part of them, in an organization are the main actors in the development of the organizational system. Following this external element D, it is convenient to read sections 100 and 600.
Complements to the WITORG Guide
Three chapters have been introduced to support the scheme of the WITORG guide. Their purpose is to help a better understanding of the guide: