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The organization – people and process

April 4, 2012

Businesses comprise people and processes. Employees come to the business with their own goals, aspirations, moral values, unique talents and abilities. For the organization to survive and thrive, it must have a well articulated vision and mission to assure that all are working in the same direction. Once that vision and mission is articulated, they must not become dogma but instead must be somewhat malleable to respond as the market, environment and organizational knowledge change.

Your organization is people and processesThe characteristics of such an organization may not always be observable to those outside, but those within invariably describe the business as progressive, innovative, always changing, chaotic, responsive to customer needs, supportive of employees, and a great place to work. The leadership team ensures that the necessary skills training for employees are high on the priority list. They do not cut back on this training in hard times because it is a vital part of serving the customer. The model organization also has pushed decision-making as close to the customer as possible.

The front-line employees are encouraged to gather as much information about the customer and the customer’s customer as possible. Armed with that information, continuous business model improvement becomes part of the process. The innovations are designed to further serve the customer and bring added value to the relationship. For this process to consistently take place, the leadership team has to make sure that continuous business model innovation is part of the corporate culture. The leadership team must be prepared to accept mistakes, learn, and move on without recrimination for trying something new.

Similarly (as discussed previously) ethics must be treated as a business process to make sure all employees understand how to manage the business model innovations and keep the innovations in line with the vision and mission for the company. Trusting the employees with this critical task of continuous improvement requires a leap of faith for some managers, but it is vital to the survival of our business in this high speed world market environment in which we now operate.

All of the above implies that we will have lean, flat organizations with many tasks outsourced so that there is flexibility built into the model. According to recent trends in employment, our companies are utilizing contractors, temporary employees, outsourced services and independent consultants more than ever. Functions being outsourced include but are in no way limited to: supply chain management, human resources, accounting, payroll, manufacturing of established products, and even some design and development. The average length of time in a executive position seems to be between 18 and 24 months. Employees are finding that they can be loyal to their profession or skill but need not be loyal to a particular company. In fact, it is often not possible to be loyal to a particular company but instead they are forced to be free agents through efficiency efforts by their employers.

The semiconductor industry is learning just how to balance the ever increasing cost of fabrication facilities (fabs) for integrated circuit (IC) production with the efficiencies of outsourcing that work to others who can leverage their facilities, keep them full, and reduce the per IC cost of manufacturing. The trade-off is one of advancing the production methods with the now $2 billion price tag for owning and maintaining an advanced production line for state-of-the-art semiconductor fabrication. It is difficult for most established semiconductor companies to accept putting the fate of their production in the hands of a third party; yet the cost of building new fabs for successive generations of product is driving them to do just that.

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