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Stop the War:  Get Departments to Work Together to Cut Costs and Improve Morale

by Jack Speer

Part Two in a Three-Part Series

BizWatch senior readers/advisors confirm that dysfunctional relationships between departments and functions cost organizations billions of dollars every year nationally and around the globe . 

In fact, friction, underground insurgency, and outright warfare between departments may well be the most costly unseen expense your organization incurs. 

These are the ugly little experiences with individual departments that are widely-known and seldom openly discussed.  Our advisors tell us it all boils down to the following questions:

How can departments fulfill their own individual mission and facilitate the success of other departments without giving in to demands that compromise the role they were hired to fulfill?  How can departments avoid becoming a patchwork of competing sub-groups and interests and ensure that the organization achieves its goals? 

How can this be achieved in a culture that supports individual growth, positive feelings among employees, and an environment in which people are excited about their own personal potential and the direction of the organization?

People in organizations are weary of everything that bogs down in departments.  They tire of approvals that get delayed until past deadlines, purchasing requests that go into a black hole, personnel decisions that lead to lawsuits, vital communications that either never make it to their destination or are mugged and stomped to death before they arrive there.

Why Departments?  Why Conflict?

Tension between departments is not necessarily bad.  Obviously, not everyone can do everything, and departments allow us to specialize in specific aspects of the business.  They also allow us to set up wise checks and balances between each other. 

But we're all aware that once organizational checks and balances go beyond where they make sense, they become barriers to getting things done and the costs are enormous.

When Individual Departments Become "the Center of the Universe"

Individual departments tend to place themselves at the center of the organizational universe.  It's only natural that departments see what what they do as the most important function in the organization.  Almost all departments can make the argument that without their particular role, the organization couldn't function, or at least would have a difficult time functioning. 

But once departments see themselves as the center around which everything else revolves, both they and the organization become ineffective.  Each department including sales, accounting, legal, human resources, product development, and operations can make the argument quite eloquently for their own centrality.  This belief begins to cause serious problems when one department believes that their role trumps all the others, that because of their importance, no barriers should stand in their way. 

Building "The Ferrari Organization" for Incomparable Speed, Guidance, Safety and Reliability

A high performance "Ferrari Organization" (and these organizations are as rare as the car) is an organization whose system and parts are engineered to produce uncommon performance. This 2003 Ferrari Enzo valued at $650,000, is designed and engineered with systems that propel this classic car from zero to a hundred miles an hour in nanoseconds. But this car is more than speed.  There are guidance systems to keep it on the road and braking systems that slow the car down and at critical moments stop it.  There are maintenance systems that keep the car running.  It is designed for beauty that attracts excitement . . . thus . . .

. . . without acceleration you never win a race. 

. . . without guidance and braking systems you won't live to tell about winning. 

. . . without maintenance you'll end up with a machine that's ruined and abused.  As movie producer David Mamet recently observed, "Without proper handling, you can turn a Ferrari into a fire plug."

Braking, guidance and acceleration seem at cross-purposes to moving forward, but all of these functions used in the proper way at the precise moments propel the automobile forward.  Each system must be appreciated and used well. 

Organizations with people are quite different from mechanical systems like cars, but they do share in common the need to work as systems that serve the whole.

We Know the Problems Between Departments.  Why Don't We Fix Them?

Organizations in the last 20 years have done a great deal to improve the way people interact with one another through initiatives such as teambuilding and executive coaching.  But virtually nothing has been done to improve the way departments work together.  When it comes to fixing relationships and creating efficiencies between departments, we do a lot more hand-wringing than fixing.

Rapid response from department to department, eliminating rivalries, improving how departments work together efficiently and harmoniously are fundamental ways to  save money as well as boost productivity and moral.  

Although it may be easy to see, it's as difficult to get groups to focus on interdepartmental relations as it is to get the greater populations to concentrate on global warming or population explosion. If you figure out how to do this, you will undoubtedly get a raise and win the Nobel Prize in the same year. 

The first recommendation of our BizWatch advisors is that organizations build a comprehensive strategy and focus on why there is often disabling conflict between departments and what it would take to fix the conflict.

A Strategy to Build "The Ferrari Organization"

The United States and most of the western world needs a strategy to build "The Ferrari Organization."  The best competitive advantage we have is the ability of people to think, lead, and achieve in groups.  This is the basic reason for the success of American workers in teams.

Good teams achieve breakthroughs and create the modern miracles of organizations.  Departments can achieve outstanding results but are victims of the lack of attention that organizations give to them.  Left to themselves they become centers of sub-optimization.  They can achieve their objectives but in ways that imperfectly relate to the goals of the overall organization and block peak performance in other departments.

Typical examples are sales organizations that sell well without regard to whether the organization can deliver, purchasing departments with great processes that don't allow for the rest of the organization to get what they need in a timely manner, accounting teams with rules that don't allow for maneuverability, human resources organizations that don't meet the needs of the organization or its employees--the examples are endless. 

The following are steps toward building high-performing outcome-oriented departments.

1.  Do an Organizational 360-degree Assessment.   Executives and key contributors in organizations have been doing 360-degree assessments now for well over a decade.  These assessments have been invaluable in generating feedback on performance from bosses, peers, and direct reports.  This practice could be extended to departments, which would receive first-time feedback from all points in the organization.  This could revolutionize the organization by generating ways to improve both performance and relationships.

2.  Make interdepartmental speed and efficiency an organizational goal.  A manufacturer can save millions of dollars by cutting seconds off manufacturing processes.  The interdepartmental process is ancient and time-consuming, and any organization can improve it if they focus on it.  It is one of the last areas of "low hanging fruit" that organizations can find.

3.  Do an Online Course on How Departments Function and How They Fit into the Whole Process.  In our better moments we realize that an organization is a system and the different parts cannot operate well without a healthy whole.  Yet departments often don't understand what other departments do and how they contribute to success.  As part of the ongoing training process, consider an online course as part of continuing orientation that explains how departments function to achieve organizational goals.  Make the course mandatory for employees.  Better still, create ways for employees to spend some time doing some of the lifting in other organizations:  get accounting folks out on the road with Sales to see how quickly "glamorous" travel becomes a burden; get field people doing some HQ work to see the magnitude of the demands faced there.

4.  Consider an Audit to Look at the Processes for How Work Flows Between Departments.  We know that every form, signature, approval, and timeline adds time and costs.  Management often does a great job of cutting those costs within a department, but sometimes without regard to how that impacts the whole organization.  An audit of these processes can produce significant savings in the process and a huge impact on organizational efficiencies, productivity, and morale.

Next Issue:  Who Really Owns Interdepartmental Relationships?
 

Carol
Kallendorf,
Ph.D.

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