Functional design is the elephant in the room

Today I was going to write a post about how the functional design (thinking, structure, objectives, metrics..) of the organisation acts as a brake in moving the organisation towards doing a better job of listening to and acting on the needs of customers.

Every systems thinker knows that you do not optimise the performance of the system (the organisation in this case) by optimise the performance of the parts (the functions).  There is even a systems archetype labelled ‘Fixes That Fail’. Examples of fixes that have failed include: quality circles, business process re-engineering, customer relationship management, the target culture in UK government institutions e.g. schools and hospitals.

However, it looks like my post has been written for me by Dick Lee over in LinkedIn in the Business Improvement, Change Management & Turnaround group.  He writes:

“The Battle is Joined: Customer Interests vs. Functional Silos

Ranjay Gulati’s recent book, “(Re)Organizing for Resilience,” explores the obstacles faced by companies migrating from inside-out (company first) to outside-in (customers first). And he hits the nail on the head when he identifies functional silos as the key organizational impediment stalling companies making this journey. We’ve seen it happen over and over again, although we’ve become much smarter about forewarning CEOs of the organizational disruption they’re about to face.

CRM practitioners will blow off the issue and tell companies to rely on their software. Process people will claim that redesigning process will get clients from I-O to O-I. Customer experience denizens will claim that hiring, training and motivating customer-facing employees will get you there. Marketers will claim going touchy-feely will do it. Social media believers believe they have the true and only answer. And they’re all wrong.

You can’t get there from here without shrinking silo walls and installing senior managers above the silo walls responsible for coordinating the contribution of all functions towards optimizing the customer experience…..

My viewpoint: I was a part of the BPR movement and this died eventually when it became obvious that the functions were not simply going to surrender to a customer oriented, value added, process centred organisational design.  It will be interesting to see whether customers can force changes that the functional organisation design has successfully resisted for over 70 years.

Finally, I do not see CEO’s as saviours outside the dysfunctional organisational system.  Taking a systems perspective I see CEO’s – their thinking, their behaviour, their office – deeply embedded within the systems that we are seeking to change – the organisation. When more CEO’s get this and take the responsibility that comes with it then we are more likely to see progress towards a new type of organisation: one that is customer focussed perhaps even customer centred.

Author: Maz Iqbal

Experienced management consultant working at the intersection of strategy, customer, and technology. Combine a tendency to think strategically with a penchant for getting my hands dirty at the coalface of implementation.