Published in: American Printer, October 1992
An organization's structure impacts its performance, positively or negatively, including its return on investments in employee education and training.
An organizational structure (how and for what purpose a firm organizes and processes work) can negatively impact performance.
In one company, for example, information was gathered on how resources were organized to achieve objectives, including how supervisory personnel perceived their organization's needs and customer relationships. In time, it became clear that this printing operation was misdirecting resources. Unless structural changes occurred, given current conditions, the outcome of its corporate performance could not improve.
In this instance, company management had set a goal to grow between eight percent and 12 percent each year. Eight sales reps are expected to prospect and develop new business, working alongside three customer service people and two estimators. Currently, estimates take two to seven days to turn around, with no supervisory intervention. Order entry is overloaded. Artwork often sits for days, only to be entered into the schedule and prep department at the last minute. Late deliveries are commonplace. On-time proofs are a rarity.
The company's recent performance is a steady stream of lower profits, decreased sales, increasing pricing pressures from customers, faster sales department personnel turnover, and rising customer attrition (more than 25 percent).
Management doesn't understand why sales reps hesitate to prospect for new customers. Reps believe that more work only hinders service to current customers. However, the firm plans to hire two more sales reps and bring in high-powered sales trainers to boost staff skills and renew enthusiasm.
Obviously, increased sales education, training and team building are not cure-alls on their own. Increased frustrations and organizational tensions are inevitable as expectations and personal skills are elevated without a supportive organizational structure.
This out-of-balance structure results from an industry mind-set focused on efficiency rather than effectiveness; an internal-driven rather than market-driven focus.
Before beginning customized education and training, management was asked to reorganize resources. Specifically, two poor performing, but technically competent sales reps, were given the option of becoming customer service reps. This resulted in improved order entry, customer responsiveness and on-time proofs for customers.
Next, after careful analysis of estimate requests, a profile was developed and disseminated of work the company is capable of producing competitively. In addition, regular training involving the importance of complete specs was provided.
Although these strategies resulted in fewer estimate requests, the firm's "hit ratio" improved more than 80 percent. Turnaround time was slashed to a consistent two days. In addition, another estimator was hired, resulting in further improvement of orders won, an increase in new business, and an estimated turnaround of one day, not two. Strangely, sales reps began prospecting without threats from management — and customer attrition improved.
It's clear, in this situation, that the organization's structure contributed to its performance, and the effectiveness of education and training.
What printers achieve in performance is the result of systems and processes. There are few simple solutions. With a supportive structure, however, employee education and training can be one of the critical differences in organizational success.
Individual skills, technological and organizational training — with a market-driven purpose — can yield impressive dividends. Relatively small investments in purposeful training often score incredible and sustained corporate and individual performance improvements in less than 60 days.
In addition, this market-driven strategy should deliver guidance and direction to organizational structure, including job descriptions, how work is organized and processed, and continuous education and training for sustained performance improvements.
Organizational structures impact all forms of investment. Most were developed when demand was more in balance with supply, and same-day turn-around was the exception rather than the norm. Production efficiency and order entry processes almost singly determined whether a business grew and made a profit.
It just doesn't work that way anymore. Market forces have changed. Our organizational structures and training must keep pace.
