Process-centered organization (PCO) structures have come into fashion over the past few years. PCO structures realign organization building blocks with the value-adding processes in the business. Instead of functional hierarchies being the dominant structure, people are organized into multidisciplinary teams whose goals are focused on managing the end-to-end activities that deliver value to their customer. Team size can extend to many tens of members.
This concept has become best practice in many industries where lean, fast material and information flows are crucial for survival. Removal of cross-functional boundaries and an element of self-management and empowerment are fundamental. When it works, the value stream can be run with fewer layers of management; headcount efficiencies are increased; and decision-making can be delegated more effectively. Most importantly, communication routes can be short-circuited and the black holes found at organization interfaces are often eliminated.Examples of process-centered organization
Several pharmaceutical companies have successfully made the transition from a traditional organization structure to a new progressive model. The result, in some cases, has been the difference between survival and eventual plant closure. In other cases, the change has been a failure, and a reversal in direction has ultimately been necessary.
Another equally informative case study showed how the organization structure in a facility was redesigned in a radical way with less emphasis on improving performance, ways of working, enlarging breadth of skills, and more emphasis on managers becoming process flow owners within a self-directed team arrangement. The lines on the organization chart were the center of attention. In due course, the change was found to be too radical with insufficient focus on business performance improvement. Structure didn't follow strategy, and the organization was changed back to a classic line structure. After a period of reflection, the lessons learned led to adopting a more effective approach.
A common stepping-stone to PCO is to use more of the matrix-type structure where discipline teams are linked to production process teams by single contact points. These dotted lines build commitment and ownership to the goals of the process team without weakening membership of the functional team.