Page 131 - Managing Change in Organizations

CarnCh07v3.qxd 3/30/07 4:23 PM Page 114

Chapter 7 ■ Organizations in the twenty-first century: the value-added organization
Stage B: Process design – mapping the value flow

It is normal to define the value flow (or chain) of activities for customers, distin-
guishing primary and support activities. Once the value flow is identified you
need to decide how to organize these activities, e.g. on functional, product–service
or geographical bases and either ‘command and control’ or into value-added
clusters.

1 Value-added design
1.1 Map value flows.
1.2 Identify important transactions with customers.
1.3 Assess level of input needed from other functions for each activity.
1.4 Estimate/assess customer perceptions of:
– cost (high, medium, low; stable, changing)
– importance (high, medium, low)
– satisfaction (high, medium, low).
1.5 Estimate elapsed to work time ratio.
1.6 Assess whether to ‘cluster’: proceed to steps 2 and 3.

2 Estimate value-added problems of ‘command and control’ mode
2.1 Value flows across functions.
2.2 Narrowly defined tasks.
2.3 Multiple handovers (and queries).
2.4 No ‘owner’ for the customer.
2.5 High elapsed to work time ratios.

3 Value-added clusters

3.1 A cluster of end-to-end activities which create value for a customer.
3.2 End-to-end activities contain most or all tasks from start to delivery of out-

puts (note: but shared service clusters may need to be involved).
3.3 Value on customer-critical issues such as speed, cost, quality, service, delivery.
3.4 Customer – internal or external.
3.5 Size – no final answer but in professional businesses 30–40 people the norm.

4 Value-added contributions
Once steps B.1, B.2 and B.3 are complete we can define the value-added contri-
bution each ‘cluster’ brings to the total business process. For example, a man-
agement team might deliver the following:

Strategy
■ decide and recommend new directions;
■ guide and drive strategy;

114