GEM Engserv Pvt. Ltd is an ISO 9001:2015 certified organization, certified by TUV India in accreditation with National Accreditation Board for Certification Bodies (NABCB).
With the exception of a select few professions, no value is generated in isolation these days. We all work in or across teams to generate something that the customer is willing to pay for.
While we may think of working in a team as a fundamental idea, it was not very common just a hundred years ago before the advent of the assembly line. This revolutionary system was born in the automobile manufacturing industry. However, it is the backbone of functioning of all our teams today. Whether you are in the business of developing real estate OR constructing bridges, ports or roads OR the production of ready-mix concrete, almost everything of value produced today relies on the fundamental principle of division of labour and specialization.
Most of us cannot imagine going through an entire day without using ball pens. Have you ever stopped to consider how it is made? Our mental map immediately pictures an assembly line in a pen manufacturing factory which churns out thousands of pens each day. This humble pen is built from various components – the ball, the point, ink, an ink reservoir (cartridge), a casing and a pen cap. In some cases, the pen is fitted with a button and spring system which exposes the ball point when the button is pressed. These individual components are put together through an elaborate process carried out in the factory. Imagine if gathering and assembling all these individual components and inspecting the finished product were to be carried out by one person alone. The changeover between individual processes would have led to huge waste of time. In all probability, a person working alone would have struggled to get even a single pen out the gate in the entire day. Now imagine the same process performed by a team – a group gathering individual components and laying them out, another group assembling the ball and the point, another assembling the ink, cartridge and casing and yet another group performing the final assembly. With a few additional team members only inspecting the final product, this team of 10 could possibly churn out 50,000 pens each day (a calculation actually envisioned for the case of pins by Adam Smith as part of his most notable work “The Wealth of Nations”). This indicates a magical 5,000-fold increase in productivity simply through division of labour.
But how does this affect us? The example quoted is for a simple pen making setup, a typical manufacturing process. You might be tempted to believe this does not apply equally to you. However, a closer look at what you do each day will show how the same principle is or can be employed to massively boost the output that you and your team generate. Consider another example that we are more familiar with. The production of concrete involves gathering raw material, deciding the mix design, mixing raw material as designated by a predefined standard process, and finally performing inspection on the output. While we may have large plants to perform the mixing, the production process cannot be governed by a single person. It is the effective division of responsibilities to various team members across procurement, design, production and quality control which determines the net output generated by the plant.
This also applies to the more complex process of developing real estate. The liaison team prepares the land (manages approvals, ensures legal arrangements) on which to develop the property. The marketing team positions the property and informs the customers why they should want it. The sales team guides prospective customers and aids the transaction. The architect and design teams ensure the property is designed in line with the vision of the marketing team. Thereon the construction team is responsible for executing the design which brought the vision to paper.
Whether or not we see it this way, the division of labour envisioned by Adam Smith is at play in our daily lives making our jobs easier, more productive, and more manageable.
In the previous examples of developing real estate, imagine the construction process by itself. While it is mentioned as a simple standalone process, it is the combination of a large number of sub-processes. The timeframe of construction begins with the planning phase where the schedule and budget get confirmed, designs get finalized and individual procurement contracts are put in place for materials and services. The next step involves preparation for construction i.e. bringing on board individual teams to perform various construction activities (building the frame, finishing, services, external development etc.) as well as allied services involved in managing the project. With all stakeholders brought on board, actual construction begins and the project starts taking shape. All these functions are handled by individual teams stepping as per their designated schedule, working together to meet the project objectives.
The reason we have multiple teams working on a project is that a single entity cannot manage multiple activities. Further, a group of individuals focusing on a limited set of activities enables them to not only deliver their tasks to the best of their abilities (specialize) but also drives incremental improvements (often leading them to innovate) in their tasks. A project planner’s role is to prepare the most accurate representation of the project schedule in a format easily readable by the other team members. One can envision the challenges that this team member would face if given the additional responsibility of ordering material, inspecting construction activities and approving invoices in addition to planning. This mix of responsibilities would make performance of each individual task impossible. On the other hand, a planner tasked only with preparing an updated schedule is likely to find ways to work faster and present the same information more effectively (innovate), complete with detailed analysis of delays, issues and possible ways to bring the project back on track. Over time, the planner would further improve his new, quicker and more effective process (specialize). In the ideal situation, specialization and innovation feed each other to create a create a virtuous loop.
Note the term division of labour in the previous section. We may not relate to the term “labour” because we consider ourselves removed from the typical factory worker or the construction foreman and his gang of workers. However, real value is created on the shopfloor (or on the construction site or batching plant) and production is driven by the actions of the workforce. The role of management lies in creating a suitable environment for optimal and incrementally growing production. This also involves defining as clearly as possible the roles and responsibilities of each individual. A common error made by managers across industries is a failure to periodically assess the roles and responsibilities of their team members. Even if this has been established at a certain point in time, continuous technological innovation often makes existing systems redundant or at least less productive.
In most cases, managers who are too involved in the process themselves find it difficult to objectively define process boundaries. The “that’s how we do it here” approach over-rides a methodical assessment of the roles and responsibilities. Stakeholders who are embedded in the processes tend to avoid even the slightest overhaul in the status quo. While it is always effective to engage an objective third-party to help perform process mapping (also called value chain analysis, value stream mapping, process re-engineering), this can also be driven as an in-house project by an internal stakeholder or a cross-functional team who is not deeply involved in the day-to-day processes. The key point is to focus on identifying the ball, the point, the ink, the cartridge and the cap in our production process.