Recently, I had a discussion with somebody, who told me that in her opinion a network organization is similar to Lean working. As I strongly disagreed, I could not find the words to explain myself. It did however intrigue me, so I kept thinking about it.
This is part two of two: how does Organization 3.0 and a Lean organization compare?
For the record: this article regards a network organization (Organization 3.0) as it is in the Netherlands. According to the website organization3punt0.nl:
“Organizing 3.0 relieves the employee potential. Organization 3.0 offers a clear, flexible structure, where employees become intrapeneurs1 to bring the focus back to where it should be: creating value”.
So when I am talking about the network organization in this article, it regards the Organization 3.0 (three-point-zero). It does not necessarily regards the network organization as globally known.
Since the core value is similar (creating value), the difference lies in the details.
Vision and policy
|Lean is based on a long term vision, even improvements may come at the cost of short term profits. The company can cope with both good and bad economic conditions; it is a sustainable company.||A network organization is more based on short term cooperation, either inside or outside a company environment. The vision and policy depend largely on the current team members. Because of the lack of a fixed structure, because it is outlined only, it is hard to keep sustainability.|
|In a Lean organization, every action performed and every decision made is to add value for the customer while keeping the costs down. However, when added value means investment, investment will be made after very thorough research.||A network organization has the assignment as base. Even though the actions are performed to create value, the question is: where does it create value and what should we (as intrapreneurs) do for it?|
|In a broader sense, the Lean enterprise challenges external parties such as suppliers, transporters and to on to keep improving themselves. The company will help the third parties and give the chance to learn. Adding true value to the business at a reasonable price is the key.||As a network organization is based on short term assignments and cooperation structures, there lesser priority to invest in long term relationships with external parties. If a supplier cannot meet the team’s needs, an other supplier will be granted the temporary order. This can result in more and / or cheaper products, but the quality will remain questionable.|
|The Lean organization is continuously improving. For this, there are a number of tools available which have proven themselves in performing their task. However, the tools are just tools, not methods, and the Lean organization remembers this when applying them.||In a network organization, the project is reviewed and lessons can be learned. But if there is nothing done with these lessons, reviewing the project is a paper action only, to satisfy the customer. Due to the short term nature of a network organization, it is almost impossible to improve continuously. A solution may be establishing a knowledge base, but that only helps if every member / co-worker with that knowledge base actively.|
|A Lean organization is all about sustainability while continuously improving and innovating. Proposed innovations are always considered very thoroughly, viewed from all angles and compared to multiple alternatives. But when a decision is made, implementation is done very quickly.||In a network organization, implementations can be made quickly, but they are not always thoroughly thought over. Therefore, important alternatives may be missed.|
|One type of vision and policy is not better than the other. It is just different from one another.|
|Because Lean is all about procedures, it does not really matter in what type of organization it is practiced. Every organization, highly traditional as well as highly modern, needs procedures to work with.||A network organization (three-point-zero) is currently the most modern type of organization, though not widely spread. It relies heavily on self-sustaining small project-like groups, who are working on (partial) assignments. In this structure, as little management as possible is wanted.|
|A Lean organization usually knows a strong hierarchic structure. The difference between a traditional and Lean organization is the empowerment. In a traditional organization, the empowerment lies largely with the management, who lead directive. In the Lean organization, employees are empowered, while the leaders are acting more like facilitators.||Because of the nature of a network organization, there is little to no hierarchy. More important: true adepts of a network organization believe that no middle management is needed at all, and that the higher management empowers every employee to do whatever it takes to have the tasks done.|
|Lean also values standardization in all processes. After all, improvement is almost impossible if the company does not know what the baseline is. Therefore, standardization of processes is a tremendous help to improve the process and to determine the causes of waste (muri, mura and muda).||A network organization is about the artistic process: how do you achieve the goal? From this point of view, standardization blocks artistic (and maybe new) approaches. As this can work for assignments with no fixed end date or agreed quality level, there is always a risk in exceeding the funding or not respecting a deadline. There is also a risk in quality: the offered product or service may be good in itself, but it is not what the customer wants.|
|Lean supports whole new approaches or goals as well, but in a highly controlled environment and based on an actual plan, underwritten with thorough research and – if possible – accompanied by a working example (Genchi Genbutsu: go and see for yourself).|
|In the Lean organization, employees are not only chosen for their proven skills, but also for their potential. Human capital is the center of the Lean organization, and this can be enhanced by challenging the employees in the most positive way.||In a network organization, the team members come together (or are chosen) based on proven competences and reputation. Potential is of lesser importance, since the cooperation is usually short term. Only in true network organization companies (which is: where the new form of organization is adopted), potential is valued higher.|
|A Lean organization challenges the employees in a most positive way to achieve higher goals for the good of the company. Instead of thinking in functions, the employee is thinking and working in a flow, always considering the previous and next process while performing his/her tasks. Employees are enabled to improve the flow, while the management facilitates this when needed.||In a network organization, employees (or team members) are doing more than their current job requires them to do, because of the removal of staff and management functions. The difference with a Lean organization is that in a network organization, doing more is born out of need, not out of pride.|
|Empowering and enabling employees does not mean that employees can do what they want or how they want to do it. It means that the input of the employees is highly valued and considered thoroughly. When the idea seems good but almost impossible to achieve, a project team may look into the proposed improvement to see if it has a change.|
I am aware that there are many more differences and many more nuances to be found. This article is only meant to underwrite my opinion: Organization 3.0 is not similar to a Lean organization.
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1 Intrapreneur: internal entrepreneurs.