CIO – Otto Berkes – 6/28/17
[Ed. note: Byline by Otto Berkes, CTO at CA Technologies]
In 1843, Henry Ellsworth, the U.S. patent commissioner stated to Congress that “the advancement of the arts from year to year taxes our credulity and seems to presage the arrival of that period when human improvement must end.” In other words, anything worth inventing will have soon been thought of. While that was clearly not the case, it is true that many older ideas seem new when applied in a new context.
Fast forward to a 1968 article in the Harvard Business Review, wherein authors Arthur Walker and Jay Lorsch examined the tradeoffs between two fundamentally different organizational structures: one organized around function, and the other organized around product. To do this, they studied two large consumer products companies making the same product using the same technologies. The plant organized around function is “Plant F,” the one organized around product is “Plant P.”
In the Plant F, people were more focused on the activities within their functions. A quote from a production supervisor: “I hope that they get that line going soon. Right now, however, my hands are tied. Maintenance has the job. I can only wait. My people have to wait, too.” Job responsibilities were very clearly defined, but there was a high reliance on rules and procedures. And because each functional unit prioritized its own goals, there was greater focus on short-term results.