Between the Dots

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During the #crmjam organized by Forrester few days back, concerns around silos came up too frequently to ignore. The challenges around silos were brought up in different contexts, which I have tried to capture below:

• Departmental silos  not helping the customer objective

• IT working in silo while creating the solution to business problems

• Technological silos and communities working in isolation toward the next big thing in their areas

In my previous posts on Convergence in BPM Ecosystem and on using the social networking context for better technological synergy, I have addressed some aspects around convergence and synergy across various technologies and disciplines.

Behind the Organizational Silos

As for the silos within the organizations, it boils down to plain WIIFM (What’s In It For Me?) thought process, the way organizations measure performance and the type of behaviors they encourage.

Businesses do a decent job in defining their own objectives at high level. Then, based on how they are structured (most are by departments and functions), the objectives get broken down into what those sub-components of business are supposed to target. So, it comes down to quantitative and qualitative parameters that the functions are measured against, which are aligned with the strategic objectives beautifully.

In the world of machines, that might work well.

But, we’re dealing with people like you and me! Here’s what happens. For every function (read, people leading the function) there are a set of objectives. One or two are the primary, and others are equally important, but not so primary – calling them secondary would be inappropriate. For instance, sales are responsible for revenue and margin. Operations are directly responsible for Efficiency and Throughput stuff. Business actually “expects” Sales to be equally responsible for the bottom-line as well but someone else (here Operations) ends up being primarily responsible, why would Sales care!

Measurement, Expectations, Inspection, Incentive Alignment

It’s not difficult to find out what’s happening with these objectives. Everything gets measured, data exists for everything but a typical sales review will typically consume 90% to 200% of the allocated(!) time on revenue & related parameters – sometimes Margins, and seldom on customer satisfaction or Defect Ratios. So, that is one problem – even though everything gets measured, questions are asked only on the direct parameters for the function.

The expectations on synergy are conveniently overlooked because “People only do what you inspect, and not what you expect!” (I think I read this in Lou Girstner’s Who Says Elephants Can’t Dance?)

But even if you indeed start inspecting (read reviewing and grilling) these functions on those indirect objectives too, it won’t make them do any bit more on such objectives when they get back to their offices. The reason? Incentive.

In whatever ways the performance management process, compensation reviews, bonuses and incentives are worked out, it is almost always on the basis of direct objectives for the function that the leader or worker belongs to. There’s simply no (direct) incentive to collaborate and synergize. And to complicate this further, this also works like a racket where the bosses want their area to look clean and sweep the dirt from under the door to the adjoining ones that are supposed to be their primary collaborators!

The incentive, to act in a particular desired manner, may range from financial, social, or even moral. Many companies use the integrity and social cause messaging to tame the unethical and unsocial behaviors. And “to collaborate”, primarily falls under social incentive and sometimes promotions also have this built in – with the clause on acceptability among peers. In reality, collaboration factor ends up being a manipulation tool used just enough to get you across the line, while your primary objectives still remain the focus.

What can be done?

How can we solve this conundrum? Here’s what I think:

• The linkage between the business objectives, departmental objectives and their underlying KPIs need to be more clearly identified, defined and measured. Clue: Look at BAM, Analytics. KPI has “Key” not without a reason!

• Process Way of thinking needs to go beyond the departments. BPM can help achieve some of that by putting a Process Layer just enough to tie in those disjointed systems. There are ways to get this done with BPM methodologies without spending a whole lot of money in redesigning the systems and processes. Clue: Look for visibility and tied-in processes, leave other BPM mumbo-jumbo initially.

• Think hard on performance management process. Is the performance being measured on conflicting objectives across various departments? Is there any alignment possible? Clue: Think what customer would want that department to do in a typical scenario. Leverage Process flows to drill down such scenarios and simulations – they may not be processes but would still work for getting the required visibility on conflicting (and not aligned) expectations.

• Translate the “expected action” into an “incentivized action”! Fuzzy? Clue: Go back 4 paras and read again! 🙂

• Reading Freakonomics & Superfreakonomics may help! 😉

PS:

Too many words…? I know 🙂 my tweet during the jam looked like:

{“Incentive Alignment” <- Objective Setting <- Mgmt by Objectives <- Strategy align} + KPI (Ppl do what u inspect not wt u expect)