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Improving Performance
How to Manage the White Space in the Organization Chart
Geary A. Rummler and Alan P. Brache • Jossey-Bass © 1995 • 256 pages
Management / Measuring Business Performance
Manufacturing
Take-Aways
• Competition is dynamic, so strategies that worked yesterday may not work tomorrow.
• Even powerful strategic visions cannot survive inaction and indifference.
• The usual organizational chart creates a silo mindset that hampers performance.
• The “three levels” performance model is a framework for organizational strategy.
• On each level – organization, process, jobs – address your company’s goals, design and management.
• Manage the resulting nine variables.
• Optimize individual departments, but maintain your focus on the overall company.
• Realistically analyze your processes as they are and then design them as they should be.
• Avoid the “seven deadly sins” that undermine process improvement, from failing to assign individual
goals to setting objectives that can’t be measured.
• A small process improvement project that works is a good first step.
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Recommendation
The more involved you are with process improvement, the more you will benefit from reading this book.
Consultants Geary A. Rummler and Alan P. Brache focus your thinking on their process improvement
method by including detailed diagrams, practical examples and flow charts. They demonstrate how the
traditional use of hierarchical organizational charts creates silos, isolated corporate operations that are
separated by white space on the chart and, thus, are literally unconnected. The authors’ “three levels”
approach to management can mitigate performance issues within that organizational white space and avoid
silos. They present their framework as a reliable method for upgrading organization design, improving
processes and enhancing individual performance. Managing the “nine variables” that affect performance
can help you develop a better understanding of your organization and build a strategic foundation for
continuous process improvement, rather than wasting effort on ad hoc fixes. getAbstract recommends this
book to thoughtful managers who don’t need lots of buzzwords
Summary
A Better Model for Performance
No business manager can be complacent about the future. You must set up an organization that makes
efficient use of its resources and generates creative responses to change in its environment. You can achieve
this only by truly integrating your entire organization, rather than working in silos, or allowing wasteful
fiefdoms to root and grow. To fix your organization’s performance problems, you must first fix its system.
Whether you work in human resources (HR), engineering, quality control or systems analysis, you can
improve your organization’s processes by considering it overall. The modern marketplace is too complex for
halfhearted solutions.
“Beware of programs. By definition, programs end. Performance improvement, by
contrast, should never end.”
Do more to organize your employees than just drawing boxes for them on a hierarchical organizational
chart. Reacting only to immediate problems or seeking single, simple answers to complex organizational
problems will not provide the solutions you need.
The “three levels” framework is a better guide to making management decisions than a misleading
organizational chart. This framework identifies “three levels of performance” – and “nine performance
variables.” The three levels of performance are 1) your organization, 2) your processes and 3) your job
functions. Each level needs goals, design and management, creating a total of nine variables that affect
performance: “Organization goals, organization design, organization management, process goals, process
design, process management, job goals, job design and job management.”
“A dose of performance medication that does not address the disease is, at best, a waste
of money.”
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This structure provides executives with practical management tools, not mere abstractions. If you are a
departmental head, you will be able to see the impact of this approach on your unit’s performance and,
therefore, on your organization’s effectiveness. Companies have practiced the three-levels method for many
years, and have proven that it is a reliable tactic for overcoming daily issues and long-range challenges.
The Three Levels of Performance
When you ask most people how their businesses work, they often refer to their organizational charts. But
such charts are poor guides to good decision making. Managers who rely heavily on organizational charts for
guidance risk provoking the silo effect, with its attendant communication problems, territorial disputes and
lost opportunities. Your organization needs to be unified, visionary and adaptable.
“One of the advantages of the process-driven approach to the organization structure
design is that it provides a vehicle for assessing the value that is added at each level.”
An organizational chart populated by silos is not a useful management framework. To document your
organization properly, you must understand its inputs and outputs, and the processes in between each
event. To create an organization that can adapt to marketplace changes, first mold a management team
that sees improvement as an exercise for the entire company, not just individual departments. If each
department focuses too much on its own optimization, it may be harder to get the whole company up to
the level of peak functioning. For example, a sales department that overheats could sell more goods than
the company can produce. Immunize your company from this sort of sabotage by individuals or separate
business units.
Organization Goals, Design and Management
Time and again, the organization of a startup company remains intact as the company expands. Energetic
entrepreneurs – who tend to act without proper analysis – can arrest the growth of an expanding company
by not adapting it over time. This creates a deep need to organize the firm’s activities professionally, but
beware that acting simply because something must be done often means doing the wrong thing.
“Each step in a process should add value to the preceding steps.”
Make sure your executives understand how the company is organized and how it should function. Lower-
level managers and workers need a comprehensive understanding of their organizational responsibilities
and roles. Determine how customers, suppliers, employees and shareholders view your organization, and
decide whether you should try to reshape their perceptions. If you understand what your business really is
and create a structure for accomplishing its mission, you will be well on your way to eliminating the white
space on your organizational chart.
Process Goals, Design and Management
Processes are step-by-step activities that allow your business to achieve its purposes. Improving them is
the fastest way to enhance performance. Before trying to remap your procedures, recognize them for what
they are. List all your company’s processes, and then identify which ones are core and which are secondary.
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Making your primary processes more efficient directly affects your organization’s effectiveness. Support
processes buttress the accomplishment of your primary processes.
“The organization and process levels may be beautifully wired in terms of goals, design
and management. However, the electricity will flow only if we address the needs of the
people who make or break...performance.”
Eliminate any unnecessary processes quickly. Too often, companies run processes that no longer link cleanly
to their business success simply because they have run them in the past. The mere execution of the activity
has become its goal. If this problem exists in your organization, you need to fix it. Know why you perform
each process and ensure that each one is designed to meet the organization’s goals as efficiently as possible.
Manage processes by measuring their productivity. Prepare to adjust and change them as needed; they are a
means to an end, not your company’s purpose.
“The performance variables that must be managed at the job/performer level include
hiring and promotion, job responsibilities and standards.”
Use a multiphase attack to identify and improve the core processes that have the biggest positive impact on
your efficiency. Phase 1 is defining the process, the people involved and its place in your larger operational
context. Phase 2 is analyzing the process and designing an improved version. Account for operational
details, such as timing, resources, inputs and outputs. Simply deciding what you want will not get the job
done. Phase 3 is implementing the new design. The timing depends entirely on the scope of the change.
Remember, change and improvement do not have to be large, expensive or time consuming. Small changes
can often provide a disproportionately large improvement.
“Managers (particularly at senior...levels) should concentrate as much or more on the
flow of products, paper and information between departments as on the activities within
departments.”
Seven deadly sins can wreck your attempts at process improvement. Leaders commit these sins when they
fail to:
1. Link strategic initiatives to individuals by name.
2. Assign process improvement tasks to the right people or use the right managers.
3. Give process improvement teams clear assignments and hold them accountable for their results.
4. Understand that real improvement may require minimal change.
5 . Consider how people actually will work in a new process.
6 . Share responsibility for process design and implementation.
7 . Implement proper means of measurement with each new process.
“One of the advantages of the process-driven approach to the organization structure
design is that it provides a vehicle for assessing the value that is added at each level of
management.”
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Gauging process effectiveness allows you to quantify the company’s accomplishments. If you don’t measure
something, you cannot manage it, because you cannot identify or describe it. Measuring progress is
impossible without metrics, which provide objective standards for allocating awards. Use measurement
routines that are linked closely to your organizational goals to derive useful evidence of performance
improvement or erosion.
Job Goals, Design and Management
Of course, working to redesign your organization and its processes is futile if your employees are not
performing the right tasks. Hiring the right people is only half the challenge. Putting them in the right jobs
and teaching them how to accomplish those jobs is vital, too. Employees’ comments about their jobs and the
firm’s processes can be instructive, so listen to them carefully.
“Piecemeal approaches that are assumed to be the answer are as dangerous as no
response at all.”
If you conceive of your company as a “human performance system,” you will come closer to managing it
correctly. Make sure your workers understand what they are supposed to produce, when they are supposed
to produce it and how you will measure their performance. Ensure that they have the right skills, the
appropriate resources and the correct information to do the work assigned to them. Poor job design causes
wasted time and money. Well-prepared workers understand when they are meeting goals and when they
are not. Motivate and reinforce the right behavior by rewarding people and departments that achieve their
goals. Most seasoned workers have already experienced “flavor of the month” performance initiatives that go
nowhere fast. Instead, reach for continuous, permanent, sustained upgrades in every facet of your operation.
Implementing Performance-Based Strategy
The nine performance variables are crucial improvement targets. Your organization can use them as a
framework and a valuable checklist, but they will work only if your corporate leaders prioritize them. Involve
the executives on your management team in using the three-levels model for designing and implementing
the company’s new strategy. It can help them focus their analysis and actions on the organization, its
processes and its jobs in each key area: goals, design and management.
“Since the role of people is to make processes work, we need to make sure that their goals
reflect process contributions.”
Before you can link the nine performance areas with your strategy, you need to define that strategy clearly.
Begin by determining who your customers are, what you will sell to them, why they will buy from you rather
than from your competitors and what you will emphasize in the marketplace. Decide upon the means and
methods you need to use to realize this vision.
“The majority of the strategies that have never come to successful fruition have
failed...because they have been poorly implemented.”
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Create a defined strategy, analyze your organization’s teams and its current processes, and create an overall
improved process flow design that will make your strategy successful. Only when you have completed these
steps should you attempt to draw a new organizational chart. Too often, companies view these exercises
abstractly and fail to involve the right people for successful implementation. Whatever organizational
or process design your company uses, it actually accomplishes everything through its people. Your HR
development team can help.
“A rapidly changing market, higher quality standards, increasing competition, shortages
in critical resources and mind-boggling expansion of technology have become the norm
in almost all sectors and all parts of the world. Traditional solutions do not address this
new reality.”
Conduct a small pilot project to demonstrate the effectiveness of the three-levels method. Focus on the
people performing the jobs, and identify your resources, objectives, training methods and rewards before
taking action. A small process improvement project that works is a good first step toward broader progress.
Change and adapt your goals as the marketplace changes, improve your designs to support your revised
goals and continually focus your management processes on results. The majority of strategies fail because
of poor implementation, not because the vision lacks viability. Set up a reliable, sustainable infrastructure
for improvement that minimizes the need for new short-term initiatives. Base your improvement goals on
measurable results.
Practical Systems
Practicality is a significant issue in system design and management. Systems that depend on the recruitment
and retention of exceptional employees with rare talents may be impractical. You need to create a usable,
functional system that provides the results you want based on the work of ordinary, qualified people. Use the
nine performance variables as the basis of your management system, especially information collection and
analysis. This will put your ongoing performance improvement goals within reach. Your objective is to get all
of your departments working together for a larger goal, rather than pursuing parochial interests.
This method has produced hundreds of successful projects over three decades. It may be the first step
toward a powerful improvement of your organization. While the three-levels approach is not a quick fix
(since quick fixes don’t work anyway), simply understanding your organization more completely may
produce some improvements right away.
About the Authors
Geary A. Rummler is a founding partner and Alan P. Brache is president and CEO of The Rummler-
Brache Group, which provides consulting and training services to corporate and governmental clients.
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