Almost all companies are organized infunctions, departments, or other structures. Dividing a company like thatprovides clear focus and supports the ambition to optimize the result for the own team. Other stakeholders involved in a company’s value creation such as customers are on the other hand, truly uninterested in which department the task is best handled or who is responsible for causing the errors.
When analyzing the results of an organization it is always the performance of the whole company that is measured and not as indicated by managers, their achievements on KPI level. In fact, focusing on the own KPI’s strongly contributes to counteracting the overall successful operation. It is not seldom that some units’ achieving their objectives can hinder other units to reach their targets. For example, a hefty price increase in a section of the aftersales deal may lead to difficulties in new sales of the product. Another example is that the purchasers in the company swap components to lower the costs with a few percent, while at the same time causing large added costs for the production team because the new cheaper parts are more difficult to assemble.
Many leaders constantly maneuver so that occurring costs are distributed to other units while at the same time trying to maximize their own revenues. However, there is not always an awareness of how these actions lead to loss of value in transition between units. Cross-functional cooperation easily becomes precarious when the viewpoints of each team are based on discussions by the team members themselves. They most likely share a similar education, work experience, logic and perception. Their viewpoints are deeply imprinted in their way of thinking, and it is very hard for them to understand the situation and challenges of other teams. The exchange of perspectives promotes creativity. Organizations that do not encourage teams to interact with other teams actually limit the employee engagement as well as the creativity to increase the number of new solutions and innovations. This is the root cause of silos, in which different ways of prioritizing and performing tasks is individually adapted to serve each units KPIs. This in turn could lead to sour relations between teams due to frictions and disagreements in the organization. Sometimes previous conflicts between different departments have irritated the interfaces so badly that the work situation becomes unsustainable.
The challenge is however not to set a structure in form of a framework that clarifies how to deal with the interface problems or by setting targets more likely to increase internal cooperation as such structures and management by objectives are what created these unwanted and destructive effects in the first place. To master silos, it is crucial to create a culture that adapts a flexible mindset and maintains fresh perspectives. This is best done by inviting others to share their views and solutions to common problems. Collaboration and diversity are cornerstones of any successful company. By having and proactively using a team with diverse backgrounds, it is more likely that the picture will grow, and new ideas will arise.
Good relationships, understanding of each other’s situations and seeking common solutions are a good foundation for a new way of working. This is needed in order to get beyond the original cultural issue, which has resulted in massive costs in organizations.
How do you lead your co-workers so that you can turn cross-functional cooperation to be a competitive advantage?