Macro - Meso - Micro
In every walk of management, macro and micro are two levels often talked about as are the two pictures. The big picture and the small. The wood for the trees and the trees for the wood. In reality, in the business organizations, there is one in between that is talked about a lot separately but seldom together with macro and micro. The meso level. Not with the term “meso” but as "team" that connects the individuals and the organization.
Macro-meso-micro make a perfect continuous improvement net for a business. Like people, process, product, and technology i.e., PPPT business model, it serves as a framework that views any hierarchy as a generalized set made of three levels. It provides invaluable insight to generate productive improvement actions. While the terms and the concept are used extensively in sociology, the concept is equally pertinent for business organizations too, yet not used that frequently. While 'organization, team and individual' is a perfectly suitable set of terms, the idea of modelling macro-meso-micro together entails the thought of alignment of the three levels more strongly, vividly, and constantly.
In simple terms, micro is the level of hierarchy at which an individual is the centre of consideration. Meso is the level of a team. Teams consist of individuals but are identifiable entities of significant importance within their own right. Finally, organization is the macro level which is as widely known as is micro-level. Organizations are the largest entities in this broad-based and generalized three-member hierarchical chain. An organization is made of several teams which are made of several individuals which is one of the basic principles of any organization structure.
The practices such as MBO (Management By Objectives) or 360-Degree feedback process innately imply these levels. However, for continuous improvement, the concept can be extended to steer multiple aspects of management.
One such application leads to healthy development of the organizational culture. (Culture = Set of behaviours.)
Typical universal practices and the 3 levels
Some basic practices for continuous improvement and engagement of staff and teams include an effective well-connected set of:
1) Visual reports or indicators
2) Meetings/forums using those reports
3) Leadership/management to create and complete improvement actions based on the reports and meetings
All three need to be maintained through commitment and discipline – which are implied in leadership and management.
When these three practices are meshed with the three hierarchical levels – macro, meso and micro, together they yield a highly effective steering framework for continuous improvement. Each aspect is then addressed not only for effectiveness in isolation, but also for being in line with the entire organization's intended strategic direction or at least current priorities (often set through a process such as balanced scorecard or Hoshin Kanri.)
For example
Visual Reports and Indicators - do they exist at all three levels? Are they aligned? Do the individuals within the team implement actions that lead to team KPIs being improved which in turn need to be in agreement with organization's current priorities? Are those KPIs the same as required?
Meetings - are daily stand-up meetings with operators, weekly team meetings and monthly management meetings discussing the same issues and concerns or opportunities? Are the KPIs being referred as planned?
Leaders - Are team leaders working on the set priorities? (Often team leaders get back into operators' shoes out of sheer habitual familiarity due to their past as operators.)
If such a framework is not created consciously and observed, there is a risk of misalignment. Some examples of misalignment are as follows.
Visual reports at the three levels
Some of the common instances of misalignment are related to the key performance indicators. The drive at the organizational level is, for example, for inventory rationalization. The diktat that the drive causes from the top management is that, by the end of fiscal year, the working capital must be brought down by reducing inventory by some percentage. The working teams are required to observe that there is no excess production of work-in-progress or finished goods. So, the teams do not plan any such production. However – the production KPIs (Key Performance Indicators) are still left on the visual boards and shopfloor reports intact. They are - say - Overall Equipment Effectiveness (OEE) and yield %.
What would this mean? Simple. The teams still continue to maximize the utilization of machines and yield (i.e., minimize material wastage). Neither is the renewed KPI of stocks unnecessarily produced placed on top of the visual boards nor are the teams allowed to downplay OEE or the yield % as KPIs currently less important. The management gets into the critical mode of prioritizing inventory reduction. Yet the operational teams are not required to change the behaviour to suit and are catapulted into the uncritical “this too is important, that too is important – well everything is equally important” mindset which makes the teams sub-optimal. As a result, the operational teams keep building small volumes of unwanted stocks for want of high yield and less machine downtimes, while management keeps fretting on non-moving inventories.
Daily – weekly – monthly meetings
The alignment of visual reports and KPIs is reasonably conspicuous and logical. Therefore, the probability of any misalignment being quickly detected is more for visual reports and KPIs than it is for meetings, forums, and communications. Of course, the meetings are based on KPIs more often than not. However, because the structures of the meetings are less regimented and are frequently moulded to suit the context, the meetings are more susceptible to be changed on the spur of the moment. This leads to more frequent misalignment of meetings.
Furthermore, often the meetings at different hierarchical levels have different periodicity. The formats and modes are different for different meetings. For example, some are 1-on-1, some are within the group of the same function, and some are cross-functional. Finally, the meetings are more personality driven and affected by skills and behaviours of individuals. All these varied characteristics of meetings lead to further susceptibility of meetings not being effectively aligned with the changing objectives. This makes it all the more important to keep an eye on the meetings at all three levels.
One example of a risk associated with the meetings is that of cancellation altogether. While the management team holds the meetings on a monthly basis and in summary formats, the functional teams often drop the schedule completely either due to overly busy schedules due to the peak workloads or, alternatively, quite contrarily, sometimes out of sheer complacency because there is no “burning problem.”
When the periodicities do not complement each other at various levels, or when the schedules are simply not adhered to or the people facilitating the meetings change, ineffectiveness starts creeping in. While the management team is concerned about the gross profit margins in monthly meetings, the operational teams stay busy focusing on fast turnarounds through excessively higher marginal costs in weekly meetings – for example.
Leadership
The misalignment due to leadership related reasons is often because of personal passions and aptitudes. While one leader may be passionate about fixing the process, the other may be inclined to simply delegate the matter to someone in the team. While one may be a passionate technologist, some other may be an administrator and team player by aptitude. This leads to different decisions being initiated by different leaders.
When the directive from the top is to reduce costs, a leader at the meso level may keep pursuing higher output at an increased speed at over-budget marginal cost in labour and materials. While the directive is to increase the capacity even if it means temporary reduction in efficiency for want of quick change, the leader fixated on efficiency may compromise the speed of change. These misalignments, if not kept under check, cause damage silently without disrupting the daily operations of the business, while continually producing sub-optimal results. Almost like a car slowly developing rust under the coat of paint!
Mitigating the risk of misalignment
In order to identify, monitor and control such a misalignment, it is always imperative that the three levels of hierarchy in control of the managers are viewed together through several pertinent questions posed through a systematic audit.
a) For the change priority for the business - What are the indicators in financial statements – what are the indicators in functional reports – what are the indicators for specific teams?
b) How are the team meetings using the reports? Who are the facilitators? What are the facilitation instructions? How are the 1-on-1 meetings being held to ensure that the current priorities are kept in focus?
c) What are the expected behaviours and advocacies at the three distinct levels? Is there reasonable alignment?
The unifying principle
The key principle in ensuring alignment at the three levels macro-meso-micro is perhaps an unobvious one. Readiness for living with disagreement. It is now sufficiently clear that even the same human brain cannot simply stick to one feeling or opinion all the time. Getting several people to agree on each decision is a utopian dream. The harmony across macro, meso and micro levels, therefore, is often a partly forced one. So long as the teams understand in advance and happily accept that a few decisions, the scope with which they are taken and the speed at which they are implemented may not be unanimously agreed to, yet embraced by all for alignment, the purpose of continuous improvement is fulfilled with certainty.
Ultimately it is not only the wood for the trees alone that matters, not trees for the wood alone either, but also the map to view both anytime.
- Nilesh Pandit
17th November 2022