Working with large multinationals, it is always interesting to see how the balance is struck between the influence of the support (sometimes central) functions of the organisation and the decision-making powers of the product lines and operations. No two companies are the same – the structure and dimensions of every company are unique in terms of the location and scale of its sites, its product groups and its customer base.
In procurement, or marketing, what is often brushed off as ‘internal politics’ between the supporting functional areas and the product line teams is in fact the manifestation of good people trying hard simply to do the jobs for which they think they are being paid. With determination and passion. Notwithstanding this, it is undeniable that ambitious people will define success as being centre stage and wanting always to take charge of matters, irrespective of whether the line or the function is in fact the most appropriate lead.
In companies which have grown through acquisition, the problem can be quite obvious. A newly acquired business may well be led by entrepreneurs used to independent decision making and a high level of control. Inevitably this autonomy in an acquired business is reduced as a result of being part of the new larger entity, with functions of varying strength and capability being laid across the acquired business. In smaller business, the success of the leadership and the business itself is one and the same, and management styles that can create this success can sometimes be incompatible with team structures and an effective engagement with the functional expertise that has become available. The learning has to come that the professionalism, influence and reach of a functional group can help to propel the whole team forward, and success is dependent on the melding of this capability with the knowhow and get-things-done style of the entrepreneurs.
The problem is more complex and different in its nature in large monolithic organisations. Rolls-Royce, for example, with perhaps 12,000 people on the same campus in Derby, is characterised by complex streams of influence across a relatively small number of product and customer areas. Everyone has a boss, of course, but even the hard lines of reporting can often be blurred, with everyone working amongst a plethora of dotted lines of accountability. The product is extraordinarily complex, and it is inevitable that success is dependent not just on getting stuff done, but also on in-depth specialist functional expertise that can be absolutely critical, but only applicable to a tiny fraction of the value and composition of the program. It is almost too glib to say that everything depends on good teamwork, without analysing what that really means in practice.
Success is such an environment is going to be dependent on rotating leadership as appropriate almost meeting by meeting. At times it can seem like there is a soccer league and a hockey league, both playing for a season but using the same pitches at the same time! This might sound crazy, but is feasible if the following principles are adopted built around a shared vision of success
- Genuine and well-meaning respect for individuals and their contribution
- Understanding the enablers to achieving the vision across the company
- Understanding your job, but at least as important, understanding the hand-offs around you
- Understanding of the entire process that is being worked
The role of leadership
What is top management responsible for? Certainly for developing the vision of success, but actually more subtly, it is responsible for the behaviour of the organisation and the embodiment of these principles. Top management must be exemplary in leading in such a dynamic environment, and adopting different styles to address different situations throughout the working day. Demonstrably visible constancy of purpose is absolutely key, with even a tiny slip-ups setting the whole team back a long way in the maturity of its behaviours and effectiveness.
In every situation, there needs to be real thought given to making support functions such as procurement, HR, IT, etc. effective contributors to the business (and accepted as such) and at the same time retaining the focus and direction of the line operations and value streams across the company.
The functional groups are the process owners, the custodians of best practices, the drivers of step change improvements. The operations groups across the value streams are the process users, with the freedom to act in the context of the processes established by the functions, focussed on compliance and continuous incremental improvement. Both functional and operational groups will come together in their improvement events, and leadership need to bring clarity between the incremental (kai-zen) improvement events and the more fundamental step change (kaikaku) initiatives.
There is no ‘right answer’ as to how functional and line areas should interact, but in every situation the role of leadership is to clarify the purpose of meetings, events and initiatives such that all team members can contribute to the best of their ability, and with an eye on the success of the whole team. Simply recognising the different roles, the differing purpose, can accelerate the team, and you should always take time to clarify the responsibilities in the room and the nature of contribution that is expected. Great specialist input, provided with the customer in mind, should always be respectfully valued and contextualised so that its impact on the company’s competitive advantage and benefit to the bottom line can be appropriately acknowledged.
By David Kemp