Thinking Ahead

On the structure of organizations: Since the industrial revolution, there's been one predominant way of organizing companies in both the public and private sector: the vertical hierarchy. The way it looks is exactly what you and I think about when we picture an organizational chart in our minds: Many, many levels. People doing fragmented work, assigned to functional, specialized departments.

In a horizontal organization, you're formally structured around end-to-end processes-the work, the information and material flows that actually deliver value. But it's not simply redrawing an organization's structure. For an organization to perform well, not only an organization's structure, but its systems, culture, people and strategy all need to be aligned.

Most organizations are going to end up being a combination of having parts of their organization structured around core processes-strategically critical end-to-end work and information flows that deliver value-but they're going to retain functions in those areas where detailed technical expertise is critical.

On the foundations of agencies: All organizations, public and private, need an identified value proposition, which is the unique value they deliver. For example, at [the Occupational Safety and Health Administration], you could stipulate that a value proposition would be doing a superior job of protecting the safety and health of American workers. Then you'd want to determine the key processes that will help OSHA ensure safety and health. In OSHA field offices, there are now teams that are responsible for the response process, responding to worker complaints, and teams that are responsible for the process of proactively problem-solving, rather than having all the work divided up among specialized workers.

On improving performance: The use of cross-functional process structures gets rid of unnecessary hand-offs and fragmentation. The use of process redesigning helps agency work become more effective and efficient. The use of high-involvement work structures-empowered teams-also improves performance. These are performance enablers. They mutually enforce each other. That's why horizontal organizations get dramatic improvement.

Furthermore, horizontal organizations incorporate process-based performance objectives. Agencies set up measurement systems that measure performance based on the results that drive the overriding mission. Everything's focused on how the agency delivers better results. Horizontal organizations get decreases in cycle time of up to 90 percent, and tenfold improvements in quality. In the redesigned OSHA offices, there has been a greater than 80 percent decrease in response time to worker complaints.

On information technology: It's extremely important in a horizontal organization. Information technology enables people to be connected within and without organizations; it captures expert knowledge and makes it available to people throughout the organization; enables teams to work collaboratively; gives people the information they need to solve problems faster; and gives people performance feedback so they can make work processes more effective and efficient.