The Breakthrough Imperative by Mark Gottfredson

Author:Mark Gottfredson
Language: eng
Format: epub, pdf
Publisher: HarperCollins
Published: 2013-07-15T00:00:00+00:00

3. Organizational and Decision-Making Simplicity

The more complex your strategy and your products, the more likely your organizational structures will be infected as well. We have to tell one last anecdote from the auto industry, because it speaks so clearly to this issue.

Chrysler Corp. undertook a major product-complexity optimization effort in the 1980s and eventually began to examine its organizational procedures for similar simplification opportunities. A bellwether example was found in the organizational processes surrounding the wiring harnesses of the vehicles.

A wiring harness is the electrical distribution system of a car—a bundle of wires, usually inserted early in the assembly process, that connects all the parts requiring electricity to the power source. It has a big trunk cable with a major branch to the engine and subbundles containing individual wires leading to the dashboard, the lights, and other parts of the car. Chrysler had thousands of different wiring harnesses at the time. Individual engineers designed a basic harness for each car model. But the exact harness installed in a car would depend on the configuration of options in that car. A car with a rear-window defogger, for instance, would get a different harness from one with no rear-window defogger. Assemblers had not only to get the right harness for each car on the line, they had to pull the harnesses all the way through the frame and firewall of the car. That sometimes broke wires or stripped off insulation. In fact, electrical problems relating to wiring harnesses were one of the most common kinds of quality defect, occasioning expensive rework costs after the car had been assembled, and sometimes leading to electrical problems for the consumer that were difficult to diagnose and expensive to correct.

It obviously made sense to standardize the wiring harnesses, and suppliers had been suggesting that. But this is where they ran into the real source of complexity: Chrysler’s decision making. Some 240 different people had to approve a wiring harness.

When Chrysler tried to diagram all the touch points necessary for approval of the designs, it wound up with a picture that looked like a mass of spaghetti connecting boxes marked “body,” “supplier 1,” “engineering,” and so on. No supplier had been able to walk through that decision-making process to get things simplified.

So Chrysler’s problem wasn’t just the option complexity and the impact on the number of wiring harnesses, it was the dysfunctional decision-making system that made it nearly impossible to fix the harness situation. We’ll come back to Chrysler in a moment—but in the meantime, we want to introduce two tools that can help you fix such a situation.

Clarify and simplify decision making. The key step in untangling too-complex decision-making processes is to assign clear roles and responsibilities. Few decisions in a large organization can be made by one person. Nearly all must involve a variety of people in different positions. But not everyone who takes part in a decision plays the same role. Some are responsible for recommending a particular course of action—for making a proposal or offering alternatives.

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