Corporate functions often mimic Asian telco networks – it seems easier to add another circuit than problem-solve what you’ve got
Untangling the corporate (dys)function
“It’s useful to go out of this world and see it from the perspective of another one”
So offered the late, great Terry Pratchett. And having in the past two years moved from the corporate stage to the consulting balcony, I have to agree. It is surprising the clarity with which we see anew patterns in the world when unencumbered by the baggage of our own making.
I have spotted an all too prolific disease.
It is a disease with a known pathology. It has been carried by many hosts – business schools, consultants, management gurus, migrating executives – and has infected many an organisation, from large corporates to not-for-profit enterprises to NGOs to the public sector.
It is the corporate function. And the prognosis is worrying.
The triggers of the disease are all too familiar – organisations outgrowing their operating models as they build scale; regulators imposing new and often competing compliance obligations; boards raising the bar of expectations on management and demanding no surprises; strategic reviews identifying opportunities to deliver economies of scale through common management systems and shared services; the mob down the road doing it so we should too…
The organisational response is, more often than not, to add functional muscle. It is quicker to recruit capability than to build it. And it is easier for the executive to convince the powers that be that things will be alright when they can point to their head-of-function who will “see to it”. Not to mention the comfort that comes from having someone to keep senior executives out of jail.
And the early, tentative investments pay off. The performance needle seems to shift in the right direction. The senior executive has more confidence that they at least know what is really happening, even if they aren’t yet in control. A grateful executive or manager publicly attests to the benefit they received by having someone work with them to solve a problem.
So, if a small investment has paid back big time, then surely a bigger investment will pay back even more?
And so it grows…
The functions get bigger. The organisation gets more functions. The functions are given more teeth. The functions control more of the budget. The functions grow their own managerial overheads to support the work of the function.
In time, the affliction similarly manifests – functions looking down upon the organisation through narrow portholes and designing supposed solutions divorced from the realities of life on the frontline; functional initiatives developed in isolation that compete for resources and attention; “functional excellence” agendas seemingly at odds with the commercial priorities of the business; growing organisational complexity and ballooning cost structures.
And more often than not it is the line – middle managers, team leaders and frontline staff – who are burdened with the effort to somehow make all of this work. Left to find the time and resources to do the new work that has been tasked by the functions. To interpret policies that don’t make sense in the operational context in which they are meant to be applied. To juggle and keep abreast of a multitude of disconnected systems. To keep up with insatiable demands for ever more information. And woe betide those who fall short of the expectations of their new functional masters who now have the ear of the senior executive into which to whisper who is and isn’t playing the game…
Having identified the pathology, I would like to profess that I have discovered the cure. That would be hubris in extreme. What I can do is offer some hypotheses as to solutions that warrant exploration. I started experimenting with these during my corporate career, giving me sufficient confidence to offer them here.
To be clear, I pull up short of suggesting that vesting responsibilities with functions are invalid responses to the business pressures discussed above. Having spent the majority of my career in organisations that actively invested in developing functional depth, I can attest to the value that mature corporate functions can deliver.
So it is perhaps less a question of ‘if’ and more one of ‘how’. Here are a few propositions that may collectively add up to a better outcome and perhaps shorten the learning curve that most organisations seem to traverse:
Constrain functional resources
High quality professionals operating in isolation can always find new and better ways of doing things. Create a cohort of similarly capable professionals and the line will be rapidly overpowered with good ideas. Constraining functional resources minimises this risk and also forces the organisation to make active choices as to what is important. Be bold – decide what level of resourcing you are comfortable with and reduce it by at least 30%.
Anchor the frontline as first-customer
Too many functions see their first-customer as the executive. At its worst, the function is consumed by the needs and whims of the CEO or the Board. A more productive approach may be to see frontline staff as the first-customer with function’s committed to developing an intimate understanding of frontline operations and delivering solutions that seamlessly support, rather than contest with, their core mission. This is not to deny the commercial and compliance needs of the executive but recognises that they are best served by supporting frontline staff to make the right choices in real time.
Demand that functions collaborate
The narrow portals through which functions look often denies the common ground in which the focus of their work manifests – the risk that the safety professional seeks to manage resides with the team leader that HR is seeking to develop and relies on the systems stewarded by IT. It seems only reasonable to expect that functions should work together to both pool their expertise and deliver to the line complete and workable solutions rather than expecting line leaders to pull it all together.
Banish business partnering
Perhaps swimming against the tide given the headlong rush of various functions to follow HR’s lead to establish ‘business partners’, this hypothesis challenges a mindset that somehow there is ‘the business’ and something else (presumably ‘the function’). It also challenges the assumption that the needs of ‘the business’ can be channelled through a single role. Functions must accept that they only exist to support the business and the agenda of the function is not distinct from that of the business. All functional players need to be attuned to the commercial drivers of the business and attentive to the needs of line staff. Functions act as stewards of organisational capability, not fiefdoms of control.
I offer these thoughts to provoke reflection and debate, and I would be disappointed if we were to try to distil a single answer. What is right for one organisation will likely not be for another. But if my challenge sees overloaded line leaders regain even a little control over their working day and afforded the opportunity to focus on what they know to be important, it is a debate well worth having…