CLAN organisational model was launched in 1991 and is still the approach preferred
by high-performing 'group' companies who want to enjoy the best of two worlds:
autonomous business units within the group, and an across-the-group connection
which ensures that the whole is greater than the sum of the parts. In the CLAN
model, action takes place in the businesses whilst networking between them is
driven from the centre. Without this continuous championing and cajoling, networking
falters (see the story in the box).
approach sometimes tried is to co-ordinate cross-business procurement on an as-required
basis by giving a senior manager the task of making it happen. This is a valid
attempt to achieve co-ordination by focusing on a process of interaction, as distinct
from structuring a central team around the task. However the manager's own 'vertical'
responsibilities to his or her own business get in the way of 'horizontal' across-the-business
process management. Further, observes one vice-president given this special responsibility,
"the process only works when I personally kick-start it". In between
times, participants in the process are drawn into their local priorities as opposed
to seizing cross-business opportunities. The issue addressed by CLAN is not 'how
to organise tasks' but 'how to organise so that cross-business co-operation happens
in a sustained way.'
Power, page 73)
attraction is that it provides a powerful and more stable, yet still flexible,
alternative to centralised or de-centralised management of key business functions.
Those who are fans of acclaimed business guru Charles Handy will recognise, in
the CLAN approach, a practical way of applying the concept of federal 'subsidiarity'.
This is described in Charles Handy's excellent book 'The Empty Raincoat.' Initially
set in a procurement context, the CLAN model has also been successfully applied
to the organisation of other business disciplines.
Traditionally, a company
structure is likened to a pyramid. Solid this may be, but one side of the business
cannot see across to the other, and the stones at the bottom cannot see where
the top is pointing. We prefer the imagery of the light, transparent connected
structure of The Louvre, Paris
CLANs are not always the right solution. There are occasions when autocratic top-down
leadership is essential, for example in a time of corporate crisis. Likewise it
is unlikely to be the right choice in a company that is so intent upon task that
it ignores the 'processes' whereby people work together. Contact
us for a copy of our checklist to see if your company is ready for CLAN and
the competitive advantage it can give you.
- "Unscrambling mixed
signals on how to organise buying" - Electronic Components Journal, Asian
Sources Media Group, Hong Kong, November 1990
or Not Working" - Purchasing and Supply Management, CIPS, UK, January 1991
- "The McKinsey Quarterly, Number 3, 1991
makes up a Clan of purchasers?" - Government Purchasing, UK, October 1993
Our Edge' - Performance Magazine, Phillips Petroleum, Winter 1993
in-company journals and executive briefings
a CLAN" - Modern Purchasing, Canada, October 1995
Power: Your Suppliers, Your Profits" - R C Russill, Prentice Hall, 1997
- "Contracts Update"
- South Australia Government, December 2001
after CLAN: Is procurement returning to central control?" - Supply Management,
- "The CLAN strikes back!"
- Supply Management, May 2003