Building in contention is easy, and hard to fix later
In 4 Organizational Design Issues That Most Leaders Misdiagnose, Ron Carucci offers up a shortlist of common toe stubs:
Four of the most common irritants I’ve seen arise as a result of ineffective organization design are: competing priorities, unwanted turnover, inaccessible bosses, and cross-functional rivalry. If you find yourself struggling with one or more of these issues, consider if the design challenges I discuss below may be the deeper cause. Doing so may help you pinpoint, and resolve, the real problem.
I thought his take on cross-functional rivalry was spot-on:
When people struggle to work across silos, labels like “uncooperative,” “bureaucratic,” or “political” often get tossed around to explain why departments like sales and marketing don’t get along, or why operations and R&D are at odds. Team-building sessions to strengthen trust are deployed, or workers are shuffled into liaison roles to bolster cohesion. But frequently, beneath divisional conflicts lie misaligned metrics and/or incentives that actually encourage rivalry.
Metrics and incentives are vital to aligning work across teams. They shape people’s behavior by defining what’s important to the organization, and synchronize tasks by ensuring that everyone is working towards a shared result. Misaligned metrics and incentives, by contrast, can act like grinding gears, pulling people in opposite directions and pushing them towards conflicting goals.
In one organization I consulted, two divisions of marketing met this fate. One was incented to drive online traffic to the company’s website while the other was incented to convert that traffic to sales. This led to conflicting messages on landing pages, finger pointing, missed targets, and an aversion to sharing vital analytics despite being highly reliant on one another for success.
When two functions meet at a critical seam to produce shared results, they must be able to closely examine their individual incentives and metrics to ensure that they reinforce, not discourage, needed collaboration. The two divisions spent a day together constructing a plan to ensure that both traffic and conversion were not treated as mutually exclusive, and created joint access to one another’s analytics so that they could collaborate before making plans for driving traffic and conversions.
I can’t tell you how many times I struggled with these issues in the many companies I’ve worked in. The only thing that has ever worked has been to hammer out some means to get everyone aligned on the same performance metrics.
In one company where I was head of engineering we moved away from a model where sales reps got full commissions in the month they sold a custom software project, and instead paid them graduated commissions on project milestones, instead. That got them more lined up with the performance model of the engineers and made the sales reps less likely to promise impossible-to-meet timelines to close the deals because their commissions would slide out if deadlines were missed.