Almost all organizations, whether they are profit-focused, governmental, military, or not-for-profit, are set up to be managed vertically (i.e., in silos, like business units, departments, divisions, etc.). From a viewpoint of managing the day-to-day business and aligning to and pursuing overall organizational goals, a vertical approach works just fine.
However, to achieve dramatic breakthrough improvement, cross-functional (horizontal) efforts must be coordinated. Unfortunately, the only person who actually has a cross-functional job in the entire organization is typically a CEO, COO, or General Officer in charge and s/he doesn’t have the time to ensure the success of each of those cross-functional improvement efforts.
So, a different “systems approach” has been used to great effect to break down the functional barriers and achieve the desired dramatic results from cross-functional improvements.
How does it work? The organization remains organized vertically for the day-to-day management. But the executives learn a new systematic approach that entails wearing a second “cross-functional” hat. This can be an unfamiliar and uncomfortable, but necessary change.
The mechanics are as follows:
The senior team or executive board that normally convenes annually to develop the strategic plan will create the 3- to 5-year “focus” of the organization, which is usually manifested by a strategy map and a Balanced Scorecard.
In addition, they will identify a few (and only a few) prioritized high-level initiatives that call for a new approach or a new system (for example, the implementation of a Knowledge Management System or an Electronic Medical Records System in a hospital).
Finally, they should identify a few very important and under-performing outcome measures (like profit, mission readiness, infection rates, etc.) that will become the “focus within the focus” for cross-functional breakthrough improvement.
Next, the senior team or executive board should set up cross-functional committees headed by coordinating executives. These are merely functional executives who will also serve in a cross-functional role for a given scorecard perspective, theme, or objective on the top-level scorecard.
In my next post, I'll list specific questions/issues that the cross-functional committees need to address in the areas of planning, deployment, and business performance reviews.
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