Functional thinking has long been failing us – in Marketing, Sales, Product, HR, IT, Procurement, and so on.
The organisation chart suggests there are neat boundaries between each function. In addition, functional ‘ownership’ seems an appealing ambition as we climb the slippery corporate ladder.
However, it creates and reinforces blinkered ‘silo thinking’ (as do the related KPIs) and constrains understanding, collaboration, insight, speed, customer experience and even financial performance.
The ownership ethos is inefficient at best because, like it or not, the enterprise is now a world of cross-functional, end-to-end business processes, or business cycles, which is where the real enterprise value is. Ownership encourages a focus on the smallest unit of work that we control, which is invariably insufficient to drive enterprise value.
Ownership is an Illusion
Put simply, ownership is an illusion. We talk about it all the time, as if it’s a good thing. However, the word and the behaviours it encourages radiate ‘possession’, which is where the problem starts.
In business, we don’t OWN anything, we are guardians, facilitators and executors. It’s about influence, not control. The idea of control gives us a false sense of security that we drive the business outcomes and create efficiency. Accountability is good, but ownership is not so much – even though we have been trained to believe in ownership of organisations, projects, customers, suppliers, products, budgets, etc.
Functional leadership roles really represent three different types of judgement. What is valuable; what is possible; what is safe – and of course, what is in the budget? Which, in turn, affects all three.
Technology is only a part of the answer. We have to surgically remove the notion of ‘silver bullets’ and ‘cure-alls’. This is not just a problem related to AI. It has held us back for many years in all waves of technology, which has been beautifully observed in the notorious Solow (or productivity) Paradox. This highlights the slowdown in overall economic productivity growth despite rapid technological advancement over time.
We have tended to habitually see our world from inside-out, i.e. focused on the machinery related to our role in our organisation unit or team. This is our mistaken perception of what we own – our personal performance measures, activities, standards and vocabulary.
But thinking and behaving outside-in is the most effective strategy. It can answer the key questions,
- Why does this process exist,
- What value does it deliver to whom,
- What is the customer experience,
- Why are we trying to transform or improve?
End-to-end process alignment across the business (rather than scatter gun and frenetic technological activity) breaks down the aforementioned silos and drives efficiency and effectiveness. This also improves cycle time to the true business outcome.
Such alignment also means that decisions are made faster, redundancy disappears, and the organisation moves as a single, cohesive unit.
Why this matters
A recent study found that highly aligned companies grow revenue 58% faster and are 72% more profitable than their misaligned counterparts. This isn’t just a soft skill issue; it’s a hard business metric.
A VP of Global Business Services (GBS) that we work with has transformed business value by working smarter with both colleagues and stakeholders. They achieved this via an integrated, collaborative operating model focussed on end-to-end business processes.
This outside-in approach has opened his eyes to the skills and habits required to drive effective stakeholder engagement, common interests, curiosity and better business outcomes
His team talk the language of their various stakeholders across the business. Together, they define ‘what good looks like’ in their eyes. That ensures they are not seen as looking to solve just their own internal GBS issues, but rather focussed on stakeholders and THEIR business problems.
Developing this aligned culture in GBS means a focus on real, rapid return on investment, P&L impact, working capital and cash flow. It also keeps them accountable because they continuously reason in financial terms with the enterprise and between themselves.
It’s all about trust. While there is a need to attend to the ‘table stakes’ of internal efficiencies, they focus on driving broader business impact on the P&L and working capital with their stakeholders. They demonstrate execution focus, an obsession with business value, and the hearts and minds required to get buy-in to these outcomes.
Outside In Thinking
Engaging stakeholders across the end-to-end process cycles – with their different perspectives, ideas and priorities – facilitates sustained process transformation and long haul value creation.
Outside-in thinking is about business outcomes, not just internal efficiencies. It tangibly enhances both stakeholder engagement and customer experience.
When considering priorities, process improvements and technology projects, taking a ‘helicopter outside in’ view tends to reframe all of these positively. It also focuses timely efforts on the most important things for business – the customer, P&L and working capital impact.
Consider Solutions focus on delivering business performance outcome improvements, not just reports, that bring tangible P&L, Working Capital, Balance Sheet and Risk Management impact – through a proprietary end-to-end (E2E) business process approach and smarter use of technology in the context of human behaviour, data insights and decision support. The ‘Pareto Principle’ is a key to success in all of these initiatives; the 80/20 rule by which 80% or more of desired outcomes can be delivered with 20% or less of the cost, effort and cycle time.
