Why it happens
A manufacturer that has grown from a single production line to multiple lines, or from a single site to several, typically formalises each function as it grows — production, quality, procurement, logistics each acquire their own head, their own targets, their own reporting. Each of these functions asks itself good, disciplined questions about its own performance. What growth removes, gradually and without any single decision to remove it, is the informal cross-function conversation that used to happen naturally when the same small group of people ran every function at once. Larry Greiner’s research on organisational growth describes exactly this pattern: the informal coordination that worked at a smaller scale becomes, without changing at all, the constraint at a larger one, because it was never replaced with a formal mechanism for asking the questions it used to answer by accident.
It is worth being specific about what “by accident” means here. In a small manufacturer, the person running production might also be the person who spoke to the key supplier that morning and sat in on yesterday’s customer call — not because any of this was formally part of their job, but because there were few enough people that everyone naturally absorbed context from everywhere. As the organisation grows and each of these becomes a distinct role held by a distinct person, that accidental cross-pollination of context stops happening, and nothing is typically put in its place to replace it, because nobody ever explicitly decided to rely on it in the first place.
This has a further consequence worth naming: the founder or senior leader who used to hold all this context personally often does not notice its loss immediately, because they still feel, subjectively, that they understand the business well. What has actually changed is that the organisation beneath them no longer automatically surfaces the same breadth of information their own judgement once relied on — the leader’s own picture becomes steadily less complete without their own sense of confidence in that picture declining at anything like the same rate, which is part of why the gap tends to be discovered only when a specific, costly decision goes wrong.
The questions that tend to go unasked
The first category concerns ownership of the space between functions. Who is accountable when a production target is raised without anyone checking whether quality inspection, procurement or logistics capacity can absorb the change? This is rarely anyone’s job description, precisely because it belongs to none of the functions on either side of the gap.
The second category concerns which of a function’s current metrics still measure what limits real progress, rather than what was easiest to measure when the function was smaller. A metric built when a manufacturer ran one shift on one line does not automatically remain the right one once it runs three shifts across two sites, and a metric can continue to look healthy long after it has stopped tracking the thing that actually constrains performance.
The third category concerns informal knowledge that has never been made explicit anywhere. Which processes currently depend on one or two people’s personal judgement, built up over years, that has never been written down because it has never needed to be — until the day that person is unavailable and the organisation discovers what it does not actually know about its own operation.
A fourth category, closely related to the first, concerns which decisions used to be made by a single person weighing several functions’ interests at once, and are now made separately by each function weighing only its own. A production schedule change that once involved one person also thinking about quality and logistics implications may now be decided by a production scheduler alone, simply because that is who the decision formally sits with — not because anyone decided the other implications no longer mattered.
Where this shows up
The pattern described here is most recognisable in manufacturers, part of the wider Asset and Production-Based grouping. The same organisational questions appear, under different names, in other sectors.
Questions worth considering
- Which decisions currently require informal coordination between functions that used to happen naturally but now depends on specific individuals remembering to have the conversation?
- Which of the organisation’s current metrics were designed for a smaller version of the business than the one it now runs?
- Where does critical operational knowledge exist only in one or two people’s heads?
- Which decisions used to be made by one person weighing several functions’ interests together, that are now split across separate people each weighing only their own?
Your team is facing similar challenges?
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