We wish we had a dollar for every time we’ve heard executives cite “organizational silos” as a major impediment to performance.
The inability to coordinate work or execute a critical initiative across organizational boundaries is a common lament. Excessive duplication of work, wasted resources, and failure to transform are often rooted in issues related to a lack of coordination, information sharing, and synchronization of efforts.
The concept of boundaryless organizations is certainly not new. Jack Welch coined the phrase back in the early 90’s as a way to push GE’s culture to be more permeable across geographies, businesses, and functions. While it had its merits, it was not practical as an organizational model.
Boundaries are necessary to the health and strategic viability of an organization. They fuel the capacity to compete by separating “necessary” work from competitively differentiating work, which must be resourced and supported differently. They generate economies of scale when similar work is grouped. Unfortunately, they can also wreak havoc on speed, cost, and innovation when they impede potential synergies that exist at the seams of those boundaries. For example, if an organization’s major source of competitive differentiation is to provide low cost solutions and products, then the intersections among supply chain, manufacturing, and sales must work seamlessly and must align what is being sold to customers with what is being made and shipped. However, a sales force driven to produce volume and margin can place demands that operations struggle to keep up with.
When a company’s iconic brands are the source of competitive differentiation, the intersections of marketing, sales, and product development must tightly align insights from consumers with new product development, line extensions, and brand messaging. Often, though, the different time horizons between marketing’s more immediate messaging and product development’s longer-term innovation cycles stress that seam.
Too often, groups are measured individually and against seemingly contradictory metrics. What ultimately makes it so difficult for organizations to blend the discrete capabilities bounded in functional groupings into seamless sources of competitive performance? In our experience, the answer is in the common but flawed assumptions of executives that such linkages will happen “naturally,” and that their role as “integrator” will suffice as the primary mechanism for blending key capabilities into great performance. Neither is ever true. The executive’s role as integrator is important, but intentional design and management of the linkages at critical organizational seams is vital to harnessing competitive advantage and is what enables executives to develop a broader perspective of how the pieces fit together. By identifying this work and making it a priority, organizations can intentionally produce and leverage the power of breadth in their executives.
What does this work look like? For one of our clients it took the form of a series of round robin working sessions among all of the critical seams in his organization. For every seam, he made each pair of functions identify
- the value their combined efforts yielded for consumers, customers, and the organization,
- where there was confusion over decision rights and where conflicts were getting in the way of execution,
- what aspects of the organizational strategy their combined efforts directly impacted,
- the ground rules by which they intended to shape their working relationship, and
- priority actions they would begin taking that day to improve their coordination and contribution.
The results were astounding. The list of issues raised and resolved over these several days was impressive, to say the least. Many of the issues identified were simply the result of bad work processes, competing metrics, insufficient mechanisms to resolve conflict and finalize decisions, and a lack of shared understanding of how each function contributed to the results of the organization. The executive later said of this effort, “I think the greatest value of this work was the dozens of key leaders who now have a dramatically different understanding of their roles and contributions, and a far wider perspective of how we compete and make money. You can’t put a price on that. Wherever they go in the organization now, their instinct to ask broader questions and have greater peripheral vision is enhanced.”
If you need executives with breadth and perspective, ensure that the adjacent spaces into which their part of the organization connects are properly linked so that everyone who must work together across those boundaries can solve problems, resolve conflicts, make decisions, and generate real business impact.