The Many Costs of Fragmentation



In my 30 years of experience as an organization design practitioner, I’ve observed how commonly fragmented thinking occurs in business today. It has become ingrained into all aspects of organizations. It is a hangover from the Taylorist view of breaking work down into small, (supposedly) easier to manage and measure chunks. This ends up being formalized into organizational ways of working, structure, measurement and even rewards. Individuals and teams try to maximize performance in their small fragment – often at the expense of performance upstream and downstream – losing sight of the bigger picture.

I find that the problem with ‘chunking’ work up in this way is that the people doing and managing the work lose sight of the end-to-end picture as it is cut up by artificial boundaries. This slows down decision making. Power and the ability to make decisions tends to be vertical (e.g. up and down silos created by the management in each division). It also means that variances – problems or quality issues – pass across boundaries, making it harder to identify and fix them. Indeed, it becomes almost impossible to identify and fix root causes of these types of issues.

The consequence of all of this is that leaders and teams spend their time constantly putting out fires. Dealing with these symptoms of fragmentation adds waste to the organization in the form of time, efficiency and quality penalties. Leaders, falling back on their traditional thinking, diagnose the problem as “insufficient focus” and lean towards further fragmentation.

Once this happens, the organization is caught in a vicious spiral. Leaders get bogged down, having insufficient bandwidth and time to step back from dealing with the consequences of over-fragmentation to fix the root causes of problems.  

The answer is to understand the end-to-end value stream and organize boundaries around whole pieces of work. Locating boundaries at the appropriate places assists in identifying and fixing problems rapidly. This is the path to greater quality and efficiency while freeing leaders to think and manage their organization strategically.


Originally posted on the ON THE MARK blog.


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Dear Mark,
Your succinct summary on fragmentation, the perceived benefits but mostly the costs resonate strongly with me. Having spent many years in the bio pharmaceutical industry in Clinical Operations, I to have observed increased fragmentation. The practice seems especially prominent in CROs. With the advance of fully outsourced operating models, bio pharmaceutical companies appear to gradually loose core competencies and especially their oversight of what it takes to deliver such complex projects as are clinical development studies. This is to a degree visible from the recurring audit and inspection findings where lack of sponsor oversight is a common finding. Pairing that with the innate drive at the CRO end for efficiencies, economies of scale and working in billable “units”, and we have indeed arrived at a point where many of us in this industry are indeed spending most our time firefighting, and finding that in many cases not seeing the connection between different bits and not working well enough across the by now many different disciplines and roles involved (many more than say 15-20 years ago!) is a major factor.

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