Fractal presentation for the meet up

Copyright © A Holm & J Wilson

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CREATING A SELF MANAGING

ORGANISATIONAndrew Holm ([email protected])

THE FRACTAL®


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THE FRACTAL®

Context

1

My Position Industry Competitor

Evolution

Migration Industry

Survived (Y/N)

Company

Survived (Y/N)

Electrical Design

Engineer

Shipbuilding Increase - Global

(mainly Asia)

To Korea No Yes

Project Manager Water Increase -Global

(mainly India)

To India No Yes

Commercial Director Electrical

Cables

Increase -Regional

(mainly European)

To Eastern

Europe

No Yes (the only one!)

Statutory Director Aerospace

(GSE)

Global To USA No No

Statutory Director Aerospace

(Cockpit)

Global To China No Yes (only two left!)

I was the runt of

the family


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THE FRACTAL®

It Wasn’t a Great Journey

Executives had big offices and

fruit in the fruit bowl – ‘bring

me solutions not problems’

‘Team’ was an

illusion –

internecine war

was the norm?

The management

were clueless &

out of touch

I was fearful,

stressed, angry

& upset

Compliance to the

system was more

important than doing

the job right (I was

considered a loose

canon)

I felt like a slave.

Other people

had control of

my future

In-order to do better for

myself I had to climb the

ladder away from Value

Add to Non-value add

I was engaged in a sea

of disengagement

I was robbed

of my success

& blamed for

other peoples

failures

The company

could be hugely

successful without

the internal &

external

intermediaries


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THE FRACTAL®

What I Saw

10 100

I mapped the whole internal &

external supply chain. I calculated

that management & bureaucracy

accounted for up to 50% of the Costs

in the whole supply chain

And Gary Hamel

agrees with me.


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THE FRACTAL®

Disintermediate Or Die

Disintermediate internally and

externally i.e. remove the people that

did not directly touch the product,

service or customer.

Get every person in the supply

chain to add value.

GET RID OF THE WASTE!


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THE FRACTAL®

I Joined My Business Partner In 2001

3

Julian

• Designer (engineering)

• Councillor (humanities)

• Great Analyst (detail)

Andrew

Designer (engineering)

Systems Thinker (economics)

Great Synthesist (big picture)


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THE FRACTAL®

The Business Started With An Engaged

Individual with Purpose

1

Person has:

• PURPOSE (intent)

• SELF-CONTROL to ensure achievement of purpose

• FIDELITY to own purpose

• SELF-DISCIPLINE to realise purpose

• SELF-AWARENESS to recognise deviation from purpose

• DRIVE to rectify deviations from purpose


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THE FRACTAL®

The business grew (on the back of their

engagement)

Decision

Functionalise Fractalise

Fra

nch

ise

2

Purchasing

Upper Management

Sales Design Accounts QualityManu-

facture

Logistics

Process Process Process ProcessProcessProcess

This is always

the way!!


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THE FRACTAL®

But it lead to

failure

It was change

or close

4

THE FRACTAL®


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THE FRACTAL®

We Had Great Ideas

Change

Customers?

Introduce more

management?

Enhance

QMS?

Address Wider

cultural Norms?

Address

Company

Culture?

Change

Suppliers?

New ERP?Introduce

Automation?Implement

Lean?

Implement

AgileTraining?


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THE FRACTAL®

21 People Turnover £1.3m 21 People Turnover £1.3m

And a Scientific Approach

5

QualityCustomer returns


ProfitabilityReturn of total labilities

ProfitabilityReturn of total labilities

DeliveryOn time and in full

DeliveryOn time and in full

ConformanceTo statutory, regulatory

and contractual

requirements

ControlTo statutory, regulatory

and contractual

requirements

A JOURNEY OF 100 MISTAKES OVER 10 YEARS

The metrics used to determine success (or failure) are

established. From the start these are measured monthly


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THE FRACTAL®

We Tried Our Great Ideas!


Quality = UnknownCustomer returns


Delivery = 17%On time and in full


Profitability = 15%Return of total labilities


Conformance =

UnknownTo statutory, regulatory and

contractual requirements

6

What We Actually Did Approx. Cost(£k)

QDPC Impact(* = little, *** =lots)

New IT £20k *

Automation £40k *

Lean Consultants £20k *

Training & mentoring £25k *

Change trading partners £10k *

Sales Focus (1 additional person) £30k *

Change BMS £5k *

Increase management (4) - to

break contractual power of staff£100k *

Change employees £20k *

Total £270k We Ran Out Of Cash


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THE FRACTAL®

We Just Could Not Make It Work?

6

The Pendulum Always

Swung Back To The

Sweet Spot when a

project finished?


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THE FRACTAL®

We Wanted This

3

Purchasing

Command & Control

Sales Design Accounts QualityManu-

facture

Logistics

Activity

&

Resources

Activity

&

Resources

Activity

&

Resources

Activity

&

Resources

Activity

&

Resources

Activity

&

Resources

Management

Conform & Comply

Check & Correct

We needed the

benefits but

without the

management cost?Without this

(David

Marquet

Turn The

Ship round)


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THE FRACTAL®

One Last Throw of the Dice?

6

What We Actually Did Approx. Cost(£k)

QDPC Impact(* = little, *** =lots)

Change to Cell Structure £5k ***

Change Rule Set (overtime) £1k ***

Total £6k It worked

The pendulum swung

back to a different

position. We had

changed the sweet spot!!

Change rules

e.g. overtime?

Change Structure

e.g. cell?


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THE FRACTAL®

We SPLIT


Quality = 85%Customer returns






Conformance = 72%To statutory, regulatory and

contractual requirementsV.C’s Do: Manufacture, Purchasing & Logistics

Manager

Sales Design Accounts Quality

7

30 People


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THE FRACTAL®

We PROCESSISED

6

We mapped all the Value

Added ACTIVITIES (verbs)

& RESOURCES (nouns)

We mapped all the Non Value

Added ACTIVITIES (verbs) &

RESOURCES (nouns)

We distinguished all

the generic

requirements that

the business must

meet

• Statutory

• Regulatory


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THE FRACTAL®

We PASSED DOWN










16 People

9

We integrated all the RESOURCES &

ACTIVITIES into each Virtual Company


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THE FRACTAL®

We AUTOMATED

9

We automated the

processes to make them

user configurable & slick


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THE FRACTAL®

We REVIEWED

10











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THE FRACTAL®

We REPEATED The Cycle


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THE FRACTAL®

We Arrived Here

Virtual Companies Do: Manufacture, Purchasing, Logistics, Quality, Sales,

Accounts, Design & Strategy










10 People Turnover £2.1m

10

Statutory Company

Virtual

Company

Virtual

Company

Virtual

Company

Virtual

Company

Each person in a

Virtual Company

All transactions via formal

contract (automated)


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THE FRACTAL®

There is

nowhere to

hide and work

becomes much

more like our

lives at home...

11

THE FRACTAL®


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THE FRACTAL®

At Home

12

No functions or hierarchy

Do all activities

No extrinsic control and command

We’re fully engaged, we make

decisions and suffer consequences

or get the benefits

Own or borrow everything

Control all of the resources

We manage

ourselves


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THE FRACTAL®

13

Imagination (looking forward)

Creativity (problem solving)

Curiosity (gaining knowledge)

Realisation (making things happen)

Self-discipline (process following)

Cooperation (working together)

At Work

We are

managed


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THE FRACTAL®

The Informal (home) & Formal (work)

Management Structures Were In Conflict!

1

Command & Control

Catalogue & Communicate

Conform &

Comply

Check & Correct

The Informal (home)

Management Machine &

The Formal Management

Machine Are In Conflict.


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THE FRACTAL®

Value Adders Didn’t Generate Enough Excess

To Pay For The Structure To Manage Them

Person has:

Legislature



Executive



Judiciary


• DRIVE to rectify deviation from Purpose

Command & Control

Catalogue & Communicate

Conform & Comply

Check & Correct

Price = £100

Cost = 50

Cost = 20

Cost = 20

Cost = 20


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THE FRACTAL®

We Could Afford This!

1

Person has:






• DRIVE to rectify deviation from Purpose

We went back to

where the journey

started

We proved the formal

management is double

handling and is a WASTE


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THE FRACTAL®

There is an elephant in the Room

There is something

very important

missing in how we

understand

business


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THE FRACTAL®

The Traditional Structure Creates Intermediaries


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THE FRACTAL®

We Changed Our Structure From Traffic Light to

Roundabout

19

People must decide for

themselves at a roundaboutPeople do as they are

told at the traffic lights

A paradigm of loyalty & obedience A paradigm of self expression & power


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THE FRACTAL®

People Were On A Journey of Growth

2 - Pre Follower

3 - Follower

4 - Changer

5 - Creator

1 - Starter

0 - Drifter

Disposition

(level)Description

Drifter (0) Is not engaged in process

Specialiser (1) Specialises in part of a formal process

Starter (1)Does not use a formal process; relies on

informal instructions

Pre-follower (2) Given an existing process

Follower (3) Adopts a formal process

Changer (4) Amends an adopted formal process

Creator (5) Creates a formal process

22


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People Choosing Their Own Purpose


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THE FRACTAL®

What it can achieve: Customer perception from poor to outstanding

Productivity up 300%

Profits up 10%

On-time and in full delivery greater than 96%

Pay up 100%

Low waste and managerial costs

High employee engagement

Highly innovative, flexible and scalable

Still contains efficient controls and measures

26


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THE FRACTAL®

What do the founders/directors do?

Money at a

competitive rate

Space to work at

a competitive

rate

Business model

/ IT

Knowledge &

coaching

Supplier of value add services to

the Virtual Companies 27


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THE FRACTAL®

If you are facing the same business growth or survival challenges:

Contact: [email protected]

fractalwork.com

28

Self Management

14,200 hits per

month just in the UK

Date post:	05-Apr-2017
Category:	Small Business & Entrepreneurship
Upload:	mark-williams
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Fractal presentation for the meet up

Small Business & Entrepreneurship