“(re)DISCOVERing VALUE – Leading the 3-D Enterprise to Sustainable Success” is a book by Geary A. Rummler, Alan J. Ramias and Cherie L. Wilkins which describes the need for changing to a 3-D enterprise to gain sustainable success.
With the concept of a 3-D enterprise, the book describes the need of three-dimensional management of complex organizations on the resources, value and management dimension.
The book addresses the problem with resource management in organizations: the fact that there’s only one-dimensional management in the resource dimension.
Let me explain.
Resource management vs. end-to-end ownership
Currently in many organizations the performance is measured in budget spending of the different functional silo’s and not in value delivered to the end customer.
The result is a yearly battle for getting the most resources (money, human capital and other) for the specific silo’s in the organization. In this process, each manager does it best to acquire the best and most resources to optimize its own functional pool. Further, there are also no end-to-end value stream owners assigned with end responsibility for the process and it’s results.
The end result is that hard problems which affect the end customers are not solved because of silo politics and no end-to-end ownership.
When each silo get’s its budget to optimize, there could be continuous improvement in progress, but it could be done at the wrong places. Compare it with optimizing the chain of your bike while the rear tire is flat.
Pick up end-to-end ownership
So how could you as an organization grow out of this non-productive situation? By identifying the core value streams, laying organizational focus on them (top down) and assign resources to the places that need it.
If you have the process mapped, the RACI defined, the end-to-end owner assigned, critiques found, etc, you can optimize the process by assigning resources (yes, resources, not only money) to the areas which need it the most.
This implies that one year department X will get more of the resources, and maybe the other year department Y will get the most.
Creating the value creation system:
- Start with mapping the current state.
- Assign end-to-end value stream owners.
- Work top down with mapping the value stream, planning, budget rounds, performance measurements, …
- Management involvement is important: let’s get your hands dirty.
Details of the value creation system:
- Add possible errors, trends and corrective actions to your KPI explanation.
- Add the reason WHY you are monitoring the KPI + what do you want to learn from it to your KPI explanation.
- Divide budget by priority in value stream, not by bottom-up silo requests.
Working with the value creation system:
- Avoid suboptimizing.
- Technology changes only on specific request of the business.
- Don’t make linear cost cuts, but look at the value stream and its priorities.
- Cross-functional reporting per value streams and find solutions together. Overcome the “it’s not my problem” attitude.
- Create an early detection system for problems so lagging actions are avoided.
Launching the new way of working:
- Change will not happen overnight: this shift to value implies a culture change.
- Use incremental changes to switch from the old system to the new. Wait with the next step until each step has proven itself.
- If you start too many initiatives, you will lose overview and work floor engagement.
What will I do with the book?
I read the book but remain with an empty feeling. I have some key takeaways, but lack more information about bringing it to the next level. The book describes three generic processes, but remains at a high level. How would you switch from an old system which is in use for years to a new value based system?
The book uses a lot of charts and many details about the generic systems, but for me they are not adding value. There’s no use in studying a generic process like “product developed” because each step is so common, you could use it in any organization.
How would you bring a modern organization with many value creation systems of many kinds which are intertwined to the new way of working? The challenge remains and I guess it’s up to us to find our way and apply the key takeaways where possible.