Building Standardization Across Organizational Boundaries
Getting different teams to follow the same standards is tough enough – getting entire organizations to do it can feel impossible. In this white paper, I explore how companies move beyond the obvious “one boss” approach, sharing practical ways to make standards stick across complex organizations dealing with turnover and constant change.
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Abstract:
Standardization can be challenging to create, to sustain, and to improve. That’s true even if you’re simply trying to standardize your own work. Trying to create, sustain, and improve standards across a large, complex organization is far more difficult. This white paper addresses various approaches to overcoming the challenge. It doesn’t discuss the format or methods of the standardization itself, because plenty has been written on those subjects already.
Why is Standardization so Difficult?
First, we need to understand the benefits that standardization provides the organization. In chapter three of People Solve Problems: The Power of Every Person, Every Day, Every Problem, I outline the following ways in which standardization can positively impact performance.
1. It enables performance gains if everyone is following the best practice
2. It creates the ability to spot problems or abnormal conditions
3. It helps you avoid duplication of work or reinvention of the wheel
4. It cultivates an environment that is conducive to flexible resources
5. It provides efficiency and effectiveness when engaging shared resources
It’s important to be specific about the gains you’re seeking because that specificity will dramatically affect where you should focus your standardization efforts.
Even if the benefit is clear, it’s hard to get different individuals or groups to agree to a standard and even harder to get agreement or buy-in to follow that standard. I have a hard time getting the five people in my family to agree on dinner. If you’re attempting to get different teams with different perspectives, histories, and priorities to agree on how to do important work, the challenge is daunting. Yet no matter how long we delay and try to avoid it, the benefits of pushing through and developing clear standards remain clear and worth the invested effort.
Unfortunately, standardization has been made more challenging in recent years for a few reasons: organizations have changed more rapidly than in the past. Increased turnover, both at senior and front-line levels, has reduced connectivity and shared understanding within organizations. This has also served to further diminish whatever standards were already in place. The work has also changed, either because of a shift to hybrid work, because of digital transformation, or just because of the effects of entropy and the inevitable evolution of chaos.
With all that daunting news behind us, let’s change our focus to exploring the different mechanisms through which standardization can be improved.
Organizational Design: One Boss
One Boss is the go-to solution, and for many, the only solution they consider. This is so prevalent that the inability to think past this solution is actually why I’m writing this white paper.
If two teams can’t agree on how work gets done, have them report to one boss, then they “have to” agree because the boss is, well, the boss. Of course, this only works if the boss values standardization and prioritizes pushing on it, therefore it’s not a given that an agreement can be reached anyway. If you want only one way to do things, move competing ways under one organizational leader, and you’ll remove at least one source of friction.
The problem with this is that you can’t keep doing it. After all, everyone in an organization already has one boss: the CEO. The second problem is that almost every solution involving organizational design ends up creating new problems. Therefore, anytime you’re solving problems through organizational design, you’re simply prioritizing one problem over another. That’s a completely appropriate choice to make, but as stated, it has limits.
I watched an organization that had gaps in standards within the same region. Seeing that as wasteful, they reorganized around regional leadership to standardize the regions. After a couple of years, they noticed that standards to serve multi-region customers were creating waste. Therefore, they reorganized around key customers and markets to drive consistency. After a couple more years, they observed another source of waste – the same product design teams and supply chains supporting major products –so they reorganized around product lines. Then they went around this merry-go-round another time. The meta-waste created around unnecessary reorganization outweighed any benefits they achieved along the way.
While this type of organizational design is a solution, it is not the only solution, and in fact, it’s not the only organizational solution.
Organizational Design: The Matrix
Matrix is considered a bad word, just like meeting or audit. That’s not because the word is inherently bad; it’s just that the matrix is often executed poorly, so our experiences tell us it’s bad. I could choose a different word and pretend it’s a new idea, but I’d rather demonstrate how matrix organization can work and how it can help you overcome this key challenge of standardization.
Without opening the entire can of worms and dumping them out on the table, I will summarize the primary reason why matrix organizations fail: we don’t establish clear roles, especially around decisions. Usually, when matrix organizations fail it is because someone has two bosses for the same decision, which puts them in a bind. Every organization needs clear roles. Here’s how you can organize to drive the correct standardization.
Your verticals are your value streams. They define where you belong and what you work with every day. They are where you have heavy, high-cadence collaboration. This value stream, or vertical, is where you directly connect to the customer and drive speed-of-execution. If you need to know what work to do today, you ask your vertical boss. They set priorities, remove barriers, and drive execution toward value to the customer.
Your horizontals are your process or functional teams. This is where you establish standards and best practices, and where you hire and build talent. These horizontals are sometimes referred to as Centers of Excellence. The horizontal leaders drive how the work is done. Horizontals shouldn’t require the same cadence of engagement as verticals, because they should be relatively stable under most conditions.
Most of the work should be about delivering value, but when there is a need to hit the brakes and develop, manage, or improve a standard, that is done at the horizontal level. And this could be around any functional work, from sales to forecasting, design to testing, and supply chain to sourcing.
If you establish the right leaders for both the horizontal and vertical, establish clear roles, and build appropriate management systems for both sets of tasks, you can achieve both objectives: deliver value at speed through closely coupled collaboration and establish and maintain standardization, best practices, and talent development within functional areas.
Not just organizational design
I often criticize the selection of organizational design as a solution when it’s considered the only solution. The reason? For every problem we think we need organizational design to solve for us, process improvement, or behavior change can also solve that same problem.
That doesn’t mean you never change the organizational design. It only means that you should consider the alternatives before you do. How can process design and culture improve cross-organization standardization?
Process design
One of the more obvious ways to utilize process design for standardization is to hardcode it into the organization. We do this all the time. Do people generate their own URL for the team’s work, or is there a single domain name, single email system, single website? Does every team come up with its own security badging system, with three different readers on every door? Of course not.
In these examples, there is a clear single owner, so this might feel like an organizational design solution, but let me demonstrate how you can hardcode a standard with another example. Let’s imagine you want many people who make sourcing decisions around new suppliers to consider standardized criteria in their decisions. You only need to hardcode one step in that process, such as system supplier setup. When the individual gets into the system to set up a new supplier or reassign work to a new supplier, they are taken through a series of prompts that require them to consider those standardized criteria.
You may argue that forcing them to fill out the prompts doesn’t mean they will do it well, but this is a challenge with any standardization. Even door badge access doesn’t work as a standard if people hold the door open for someone following them in (as today, when writing this, I was let into a location I wasn’t supposed to be allowed into).
Another example comes from my time at Chrysler. This is not about hard-coding, but is about using a process to enable standardization. It doesn’t force standardization, require it, or control it, but merely provides a means for it to move in the right direction. This is an important perspective shift in driving standardization. While force standardization is often faster, voluntary achievement of standardization by those doing the work is often the most sustainable.
During my time in product development at Chrysler, we had an organizational design (and even a building design) based on platforms, such as “Large Car” or “Minivan.” All of the actual decision-making authority belonged to those platforms, so there was no organization design that required any consistency or standardization. We created Tech Teams (and various other teams), which allowed people to get together periodically and discuss best practices, failures, lessons learned, and standards. These teams could be centered around things as small as engine mounts, which might fall into the category of “don’t reinvent the wheel.” The chairperson could be the most experienced person in the group, or perhaps someone who saw all the failures across the teams, such as someone in testing.
Processes such as these, designed to enable standardization, require building a common view about what should be standard, what would just be a best practice, and what should truly be independently decided. Those criteria could be influenced by relative risk, who the leader of the team was, and even the culture of the organization. That brings us to culture.
Shape Culture Around Standardization
Behavior isn’t easy to shape. That’s why I often spend a lot of time on it with the leaders I advise. Broadly building a culture that values standardization (building it, following it, and improving it) is the foundation, but that isn’t the specific challenge this paper sets out to solve. What behaviors encourage standardization across organizational boundaries?
I see solving this challenge as a specific example of knowledge sharing, and I see that challenge as a knowledge economy.
And, of course, as with any economy, you need both supply and demand. Therefore, you need both the supply of standardization (people pushing out standards) and demand (people looking for and pulling in standards).
Here’s a very generic example of how a conversation could go:
Team Member: “We plan to solve this problem by developing a standard way to do the task.”
Team Leader: “Is there not already a way that task is best performed?”
Team Member: “We don’t think so.”
Team Leader: “How do you know?”
Team Member: “We doubt it. Someone would have told us.”
Team Leader: “My experience doesn’t suggest that this is true. Is it more efficient to check with other groups to see if they already have a standard, or try to find the best way ourselves?”
Team Member: “Well, probably the former.” Team Leader: “And so then…” (visually prompts the Team Member to continue)
Team Member: “We’ll go and see if there is already a standard in place that we can start from.”
That might seem aggressive to you, but you can see halfway through the conversation that assumptions and the path of least resistance can easily take over and drive the wrong behavior.
The same type of conversation can happen around pushing out standards once they are created, asking questions such as, “Is your new best practice standard more valuable if only you use it, or if everyone uses it?”
Culture doesn’t just happen. It gets shaped. It either gets shaped accidentally by what we decide, value, and ask about, or it gets shaped with purpose and deliberation. Sure, it’s hard, but as we covered earlier, it’s also hard to get all wins from organizational design alone.
Without a culture built around the benefits of standardization, any attempt at standardization will be met with pushback and end in failure. For this reason, deliberately creating that culture is a top priority. From there, additions, alterations, and improvements can be made and applied with relative ease across the organization.